APC 2009 Annual Report Download - page 153
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2009 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 151
CONSOLIDATED FINANCIAL STATEMENTS
5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Leveraged plan
2009 2008
%€%€
Plan characteristics
Maturity (years) - 5 - 5
Reference price (euros) - 53.59 - 78.82
Subscription price (euros):
between - 45.55 - 67.00
and - 44.48 -
Discount:
between 15.00% - 15.00% -
and 17.00%---
Amount subscribed by employees - 8.5 - 8.9
Total amount subscribed - 85.7 - 88.6
Total number of shares subscribed
(millions of shares) - 1.9 - 1.3
Valuation assumptions
Interest rate available to market participant (bullet loan) (1) 5.00% - 6.90% -
Five year risk-free interest rate (euro zone) 3.00% - 5.20% -
Annual dividend rate 3.00% - 4.50% -
Annual interest rate (repo) 1.00% - 1.15% -
Retail/institutional volatility spread 5.00% - 5.00% -
(a) Value of the discount
between 15.00% 9.4 15.00% 15.6
to 17.00% 5.9 - -
(b) Value of the lock-up period for market participant 14.85% 14.4 13.70% 14.2
(c) Value of the opportunity gain (2) 1.71% 1.7 2.69% 2.8
Total expense for the Group (a-b+c) 1.85% to 3.85% 2.5 3.99% 4.1
Sensitivity
• Decrease in interest rate for market participant (3) -0.50% 2.5 -0.50% 1.4
• Increase in retail/institutional volatility spread (4) 0.50% 0.2 0.50% 0.2
Amounts in millions of euros, unless otherwise stated.
(1) Average interest rate charged by banks for an ordinary, non-revolving personal loan with a maximum maturity of fi ve years granted to an
individual with an average credit rating.
(2) Calculated using a binomial model.
(3) A decline in the interest rate for market participants reduces the lock-up cost and increases the expense booked by the issuer.
(4) An increase in the retail/institutional volatility spread increases the opportunity gain for the employee and increases the expense booked
by the issuer.
21.6 - Treasury stock
The liquidity contract set up with a broker to purchase and sell Schneider Electric SA shares was terminated on December 31, 2009.
At December 31, 2009, the Group held 7,028,198 Schneider Electric shares in treasury stock, acquired at a cost of EUR 324million, which
has been recorded as a deduction from retained earnings.