APC 2007 Annual Report Download - page 179

7
Annual and Extraordinary Shareholders' Meeting of April 21, 2008
2. Auditors' Special Reports
Auditors' special report on regulated agreements
To the shareholders,
In our capacity as Statutory Auditors of Schneider Electric
SA, we present below our report on regulated agreements
that have been disclosed to us.
Our responsibility does not include identifying any undis-
closed agreements. We are required to report to share-
holders, based on the information provided, about the main
terms and conditions of agreements that have been dis-
closed to us, without commenting on their relevance or
substance. Under the provisions of article R.225-58 of the
French Commercial Code, it is the responsibility of share-
holders to determine whether the agreements are appro-
priate and should be approved
We carried out our work in accordance with French pro-
fessional standards. Those standards require that we per-
form procedures to verify that the information given to us
agrees with the underlying documents.
Agreements signed during the year
We were not informed of any agreements that would be
governed by articles L.225-86 and L.225-90-1 of the Com-
mercial Code.
Subsequent agreements
In accordance with article L.225-88 of the French Commer-
cial Code, agreements that received the prior authorization
of your Supervisory Board have been disclosed to us.
Addendum to Jean-Pascal Tricoire’s
service contract with
Schneider Electric Industries SAS
The purpose of this new addendum, in accordance with
the provisions of France’s "TEPA" law, is to define com-
pensation due to Mr. Tricoire in the event of termination of
his service contract, either by the employer or on his own
initiative, beyond the compensation due under the non-
compete agreement in his service contract, and to make
such compensation contingent on performance. Under the
terms of the addendum, Mr. Tricoire is entitled to the fol-
lowing:
In the event of termination for reasons other than serious
or gross misconduct, compensation defined by the collec-
tive bargaining agreement plus a contractually agreed pay-
ment that increases with seniority. In light of Mr. Tricoire's
seniority, the total compensation currently corresponds to
24 months of his target remuneration (fixed salary and tar-
get bonus).
In the event of resignation due to a change in the com-
pany's ownership structure that could materially modify the
membership of the Supervisory Board, compensation cor-
responding to 24 months of his target remuneration.
However, payment of said compensation will depend on
the mathematical average of the rate of achievement of
performance objectives used to determine the variable por-
tion of Mr. Tricoire's remuneration for the three full years
preceding the date of the Board Meeting at which the de-
cision is made.
If the mathematical average is:
less than 50%, no compensation will be paid.
equal to 50%, 75% of the compensation will be paid.
equal to 100%, 100% of the compensation will be paid.
between 50% and 100%, compensation will be calcu-
lated on a straight line basis at a rate of between 75% and
100%.
In accordance with the addendum of May 2, 2006, the tar-
get remuneration used to calculate the compensation de-
scribed above corresponds to Mr. Tricoire’s remuneration
as Chairman of the Management Board and CEO plus a
variable portion equal to the average of his target bonus
over the two years preceding termination.
The Supervisory Board approved this addendum on Feb-
ruary 19, 2008 and signed it on February 26, 2008.
Agreements entered into in prior
years that remained in force during
the year
In application of articles R.225-30 and R.225-57 of the
Commercial Code, we were also advised of the following
agreements entered into in prior years, which remained in
force during the year.
Shareholders’ agreement with AXA
T he shareholders’ agreement between AXA and Schneider
Electric SA, approved by the Board of Directors on Janu-
ary 6, 2006, calls for the continuation of stable cross-share-
holdings between the two groups. Each group also holds a
call option that may be exercised in the event of hostile
takeover.
Arrangements concerning Jean-Pascal
Tricoire (approved by the Supervisory Board
on May 3, 2006
These arrangements include:
Measures to ensure that Jean-Pascal Tricoire will con-
tinue to be entitled to all the pension and other benefits
provided for in his service contract with Schneider Electric
Industries S.A.S., which was suspended on his appoint-
ment to the Management Board as Chairman.
An addendum to Mr. Tricoire's service contract defining
the terms under which it will resume or be terminated.
Courbevoie and Neuilly-sur-Seine, February 26, 2008
The Statutory Auditors
Ernst & Young et Autres Mazars & Guérard
Pierre Jouanne Pierre Sardet
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