APC 2005 Annual Report Download - page 144

142
The shares could be bought back to reduce the issued
capital, or in connection with stock option plans, or
plans to grant shares without consideration, or to per-
mit the conversion of convertible debt securities, or to
finance an acquisition, or for the purpose of market-
making under a liquidity agreement.
Shares bought back under this authorization could be
canceled provided that the twenty-fourth resolution
below is approved.
Our report on the use of the authorization given by the
Annual Meeting of May 12, 2005, prepared in accor-
dance with article L.225-200 of the Commercial Code,
is presented on page 145.
You are asked to authorize the Company to buy back
shares representing at most 10% of the issued capital
as of December 31, 2005, or 22,661,992 shares. The
maximum purchase price would be 120 and the min-
imum selling price would be 60.
Resolutions to be voted on
in Extraordinary Shareholders’
Meeting
Amendment of the bylaws
- seventh resolution -
We have decided to propose changing the Company’s
corporate governance structure, by creating a Super-
visory Board made up of the current members of the
Board of Directors, to be chaired by Henri Lachmann,
and a Management Board made up of Jean-Pascal
Tricoire, currently Chief Operating Officer of Schneider
Electric who would chair the Management Board, and
Pierre Bouchut, currently Executive Vice-President,
Finance and Control - Legal Affairs.
We think that, considering the proposed membership
of the Supervisory Board and Management Board,
this represents the best governance structure to
achieve a seamless transfer of powers to a new Chair-
man and support the ongoing implementation of the
Group’s growth strategy.
Under the terms of the new bylaws to be submitted to
you for approval, the Management Board (articles 17
to 21) will have between two and seven members
appointed for a period of three years. The age limit for
holding office as a member of the Management Board
has been set at 65, with the option of allowing a mem-
ber to stay on until he or she reaches the age of 68.
The Management Board will have the broadest pow-
ers to act in the Company’s name in all circumstances,
within the scope of the corporate purpose, except for
those powers directly vested in shareholders or the
Supervisory Board by law.
The Supervisory Board (articles 11 to 16) will have up
to eighteen members, all individuals. They will be
required to hold at least 250 Schneider Electric shares
throughout their term of office. They will be elected for
a four-year term and will be eligible for re-election.
In accordance with the recommendations of the
Vienot report on corporate governance, if all the mem-
bers of the Supervisory Board are re-elected at the
same time, the terms of office of half of the members,
selected by drawing lots, will expire after two years. In
addition, half of the members of the first Supervisory
Board will be elected for two years.
The age limit for membership of the Supervisory
Board will be set at 74, and the number of members
over 70 will be limited to one-third of all the members.
The Supervisory Board may appoint one or two non-
voting members and create one or several committees
of the Board.
The Supervisory Board will set the number and
appoint the members of the Management Board. It
may also remove one or several members of the Man-
agement Board.
The Supervisory Board will have a permanent over-
sight role with respect to the Management Board’s
management of the Company. To fulfill this role, it will
perform the checks and controls that it thinks fit and
will obtain the documents that it deems necessary. In
accordance with the law, the Supervisory Board will
be responsible for setting the amount and terms of
compensation paid to each member of the Manage-
ment Board (article 21), approving agreements involv-
ing directors, as well as the sale of real estate and
equity interests and the granting of security interests,
guarantees or endorsements. The new bylaws also
stipulate that a certain number of decisions by the
Management Board, relating in particular to the Com-
pany’s share capital and strategy, will also require the
Supervisory Board’s prior approval.
Amendment of disclosure thresholds
contained in the bylaws - eighth resolution -
We remind you that, according to the present bylaws,
shareholders must notify the Company when their
interest rises above or falls below 0.5% of the Compa-
ny’s capital or voting rights, or any multiple thereof.
Certain funds have contested these thresholds as
being too low.
We therefore propose increasing the threshold to 1%
of the Company’s capital or voting rights, or any multi-
ple thereof, as is the case in most other companies
included in the CAC 40 index.