APC 2005 Annual Report Download - page 146

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Authorization to be given to the
Management Board to grant shares without
consideration to officers and employees
of the Company and its subsidiaries and
affiliates - twenty-sixth resolution -
The General Meeting held on May 12, 2005 author-
ized the Board of Directors to grant shares without
consideration to the officers and employees Schnei-
der Electric SA and its subsidiaries and affiliates, as
defined in article L.225-197-2 of the Commercial
Code. We have not used this authorization.
Under the terms of the authorization, the total number
of shares granted without consideration may not
exceed 2% of the Company’s capital. In addition, the
sum of the shares represented by stock options grant-
ed pursuant to the nineteenth resolution of the Gener-
al Meeting of May 6, 2004 and the shares granted
without consideration may not represent over 3% of
the capital. Consequently, renewal of the authorization
to grant stock options automatically implies renewing
the authorization to grant shares without considera-
tion, in order to enable the Management Board to use
this new incentive system if appropriate.
The authorization sought at this General Meeting is
narrower than the previous one.
The total number of shares granted without consider-
ation will be capped at 0.5% of the Company’s capital,
while the sum of the shares represented by stock
options granted pursuant to the twenty-fourth resolu-
tion of the present Meeting and the shares granted
without consideration will not represent over 3% of the
capital.
In accordance with the Commercial Code, the Man-
agement Board will have full powers to draw up the list
of grantees and to set the terms and conditions of the
grants as well as any allocation criteria.
The grants will be contingent on the achievement of
revenue and operating margin targets set by the Man-
agement Board. Rights to the shares will vest after a
period to be set by the Management Board, which will
not be less than two years. In addition, all or part of the
option grants will vest only if certain targets set by the
Management Board [in terms of revenue and operat-
ing margin] are met. The Management Board will also
set the lock-up period – corresponding to the period
during which the shares must be retained by the
grantees – which must be at least two years.
The authorization is being sought for a period of 38
months.
Because the Management Board will be authorized to
grant either existing shares or new shares, the author-
ization automatically entails the waiver by sharehold-
ers of their right to the portion of retained earnings,
profits or additional paid-in capital that may be capital-
ized to pay up any new shares issued.
If the Management Board decides to grant new
shares, when the shares are transferred to the
grantees it will buy back shares and cancel them, in
order to offset the dilutive impact of the grants.
Issuance of shares to employees - twenty-
sixth and twenty-seventh resolutions -
The General Meeting of May 12, 2005 gave the Board
of Directors a five-year authorization to issue shares
representing up to 5% of the capital to employees who
are members of a Corporate Savings Plan.
We did not use this authorization in 2005.
Under the "NRE" Act, if a company asks shareholders
for an authorization to issue shares, a separate reso-
lution must be tabled at the meeting covering the
issuance of shares to employees who are members of
an employee stock purchase plan. Since the twenty-
fourth and twenty-fifth resolutions concern authoriza-
tions to issue shares in connection with stock option
plans and share grants without consideration, a reso-
lution must tabled seeking an authorization to issue
shares to employees. We are therefore asking for the
early renewal of the authorization given in May 2005,
which we have not used.
The Management Board will have full powers to carry
out employee share issues up to the equivalent of 5%
of the Company's capital. Under the new authorization
the maximum discount at which the shares could be
offered is set at 15%.
This authorization, which supersedes the existing
authorization, is being sought for a period of five
years.
In addition, to enable employee stock purchase plans
to be set up in certain foreign countries whose local
legislation is not wholly compatible with the rules gov-
erning the Company’s existing plans, we ask you to
authorize the Management Board to issue shares to a
certain category of grantees, corresponding to
employees or entities set up to purchase shares of the
Company under programs to promote employee stock
ownership.
The shares issued under the authorization would not
exceed 0.5% of the capital. They would be deducted
from the ceiling of 5% of the capital set for the
issuance of shares to employees who are members of
the Corporate Savings Plan. The shares would be
issued at a discount of no more than 15% to the
benchmark share price.
This authorization is being sought for a period of eight-
een months.
Lastly, the twenty-eighth resolution
concerns powers to carry out formalities.