APC 2009 Annual Report Download - page 214

2009 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC212
GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA
7STOCK OPTION AND STOCK GRANT PLANS
•stock grant plan 9, covering 1,184 grantees (residents of countries
other than France) and representing 390,095 shares;
•a Stock Appreciation Right plan, covering 132 grantees and
representing 419,135 shares.
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, the options have a ten year life. They are exercisable
as from the fourth year, but may be exercised early in the event of a
public tender offer for the Company’s shares. Exceptionally, options
granted under plans 22, 23 and 25m ay be exercised as from the
fi rst year. Similarly, US residents may exercise their rights as from the
third year under certain plans.
Options may only be exercised by Group employees. In addition,
the exercise of 50 % the options granted is dependent on specifi c
targets being met (see page 213 ). All of the options granted to
members of the Management Board under plans 31 and 33 are
subject to performance criteria.
Because targets were only partially achieved, 403,000 options
granted under plans 20, 21 and 24 were cancelled. In 2010, half
of the options granted under plan 30 (or 471,246 options) were
cancelled as well, because the minimum targets for operating margin
(13%) and organic revenue growth (4%) in 2008 and 2009 were
not met.
Description of the stock grant plan
The vesting and lock-up periods for stock grants made to residents
of France under plans 1, 2, 3, 5 and 7 are 3 years and 2 years
respectively. The vesting and lock-up periods for stock grants made
under plan 8 are 2 years each.
The vesting period for stock grants made to residents of countries
other than France under plans 4, 6 and 9 is 4 years, with no lock-
up period.
Stock grants vest only if the grantee is a Group employee as of the
vesting date and if certain targets are met (see page 216 ). All of the
stock grants received by members of the Management Board under
plans 5 and 8 are subject to performance criteria.
In 2010, 50% of the stock grants granted under plans 3 and 4
were cancelled, representing 61,739 shares, because the minimum
targets for operating margin (13%) and organic revenue growth (4%)
in 2008 and 2009 were not met.
Description of Stock Appreciation Rights
(SARs)
SARs have the same vesting period and expiration date as the
corresponding options or grants and are subject to the same
performance criteria. The grantee receives the proceeds in cash.
Lock-up arrangements applicable to members
of the Management Board
The Supervisory Board has set the following shareholding targets for
members 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 Emmanuel
Babeau. 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.
In accordance with the provisions of articlesL.225 -185 and L.225-
197-1 of the French Commercial Code and the AFEP/MEDEF
guidelines, the Supervisory Board has approved the following lock-
up arrangements:
•a certain number of shares arising from the exercise of options
granted under plans 30 and afterwards must be locked up in a
registered account. The number corresponds to a percentage
(25% for Jean-Pascal Tricoire and 15% for Emmanuel Babeau) 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
Emmanuel Babeau) of vested stock grants under plan 3 and
afterwards must be held beyond the initial lock-up period;
•for vested performance stock grants under plans set up in 2009,
10% of the selling price net of income and other taxes must be
reinvested in Schneider Electric SA shares.
These obligations are suspended once the shareholding targets
described above are met.
Stock options and stock grants held
bymembers of the Management Board
Jean-Pascal Tricoire
As of December31, 2009, before the cancellations concerning stock
option plan 30 and stock grant plan 3, Jean-Pascal Tricoire held
571,506 options (including 158,000 performance options), 30,500
performance stock grants and 5,294 vested stock grants received
under stock grant plan 1. The lock-up period for the vested stock
grants will end on December21, 2011.
During the year, Mr Tricoire exercised 30,735 options granted under
plan 20 at an exercise price of EUR 51.26.
Emmanuel Babeau
As of December31, 2009, Mr Babeau held 20,000 options, including
15,000 performance options, and 5,000 stock grants, of which
3,750 performance stock grants.