APC 2007 Annual Report Download - page 65

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General presentation of Schneider Electric SA
Grantees include members of Senior Management, top
managers in all countries, high-potential managers and
employees who performed exceptionally during the year.
Grants to members of Senior Management, including the
Chairman and CEO and members of the Management
Board, represent between 17% and 25% of the total, de-
pending on the plan.
In 2005, the decision was made to set up annual plans at
the end of the fiscal year so that grantees will be informed
of stock option grants and stock grants at the same time
that their bonus targets are determined.
Two stock option grant programs were carried out in 2007.
The first, an exceptional program concerning employees
of newly acquired APC, was set up in March 2007. A cer-
tain proportion of the stock options (30%) were replaced by
stock grants, on the basis of one stock grant for four stock
options.
The following plans were set up:
Stock option plan 29, covering 43 grantees.
Stock grant plan 2, covering 13 grantees (residents of
France).
The second program corresponded to the annual plan set
up in December 2007. Stock options were replaced by
stock grants according to the following rule:
Grantees receiving more than 1,500 options: 30% of the
number of options,
Grantees receiving 1,500 options or more: 50% of the
number of options,
on the basis of one stock grant for four stock options.
The following plans were set up:
Stock option plan 30, covering 542 grantees.
Stock grant plan 3, covering 268 grantees (residents of
France).
Stock grant plan 4, covering 274 grantees (residents of
countries other than France).
Description of the stock option plan
The option exercise price is equal to the average share
price of the twenty trading days prior to the date of grant by
the Management Board. No discount is applied.
Since 2006, options have a ten year life. Options granted
under plans 16 through 19 are exercisable as from the
fourth year and the shares (to be held in registered form)
are subject to a five-year lock-up. Options granted under
plans 20, 21, 24 and 26 through 30 vest automatically and
are exercisable as from the fourth year or, in certain cases,
as from the third year. Exceptionally, options granted under
plans 22, 23 and 25 may be exercised as from the first year.
Options may only be exercised by Group employees. In ad-
dition, the exercise of options granted under plans 16
through 18, 20, 21, 24 and 26 through 30 is fully or par-
tially dependent on specific targets being met concerning
profit, value creation, revenue or operating margin, as de-
scribed in the table below.
Because these targets were only partially achieved,
2,414,100 options granted under plans 16 through 27 were
cancelled.
Description of the stock grant plan
The vesting and lock-up periods for stock grants made
under plan 2 dated March 2007 and plan 3 dated Decem-
ber 2007 are 3 years and 2 years respectively.
The vesting period for stock grants made under plan 4
dated December 2007 is 4 years, with no lock-up period.
Number of Exercise Expiry
options price (in ) date
Options granted in 2007 to the top ten employee
grantees (not including corporate officers)
Plan 29 36,900 97.05 2017
Plan 30 100,100 92.00 2017
Options exercised in 2007 by the ten employees
exercising the largest number of options during the
year (not including corporate officers)
322,826 52.13(1) -
(1) Weighted average price.
Half of each grant is subject to performance targets, based
on operating margin and organic growth.
Lock-up arrangements applicable
to Members of the Management Board
At its meeting of December 19, 2007, the Supervisory
Board set the following shareholding targets for the mem-
bers of the Management Board:
A number of shares equivalent to three years of base
salary for Jean-Pascal Tricoire and two years of base
salary for Pierre Bouchut. The total holding is calculated
on the basis of the number of Schneider Electric shares
owned plus the share-equivalent of the corporate mutual
fund units invested in Schneider Electric shares.
To facilitate compliance, the Supervisory Board approved
the following lock-up arrangements:
A certain number of shares arising from the exercise of
options granted under plan 30 must be locked-up in a reg-
istered account. The number corresponds to a percentage
(25% for Jean-Pascal Tricoire and 15% for Pierre Bouchut)
of the capital gain realized on the exercise of options net of
income and other taxes and any amounts required to fi-
nance the share purchase.
A percentage (25% for Jean-Pascal Tricoire and 15% for
Pierre Bouchut) of vested stock grants under plan 3 must
be held beyond the initial lock-up period.
Options and stock grants received and
exercised by corporate officers and the top
grantees during the year
The following were granted to members of the Manage-
ment Board:
Jean-Pascal Tricoire: 63,000 performance options under
plan 30 (exercise price 92, expiry date 2017) and 6,750
performance stock grants under plan 3.
Pierre Bouchut: 25,200 performance options under plan
30 (exercise price 92, expiry date 2017) and 2,700 per-
formance stock grants under plan 3.
Options exercised by corporate officers in 2007 were as
follows:
Jean-Pascal Tricoire: 6,867 options under plan 18; 5,050
options under plan 19; 770 options under plan 20 and
11,110 options under plan 21.
Henri Lachmann: 139,344 options under plan 21.
Options granted to the top ten employee
grantees during the year and exercised by
the ten employees exercising the most
options during the year