APC 2010 Annual Report Download - page 255

GENERAL PRESENTATION OF SCHNEIDERELECTRICSA
STOCK OPTION AND STOCK GRANT PLANS WITHPERFORMANCE CRITERIA
•stock grant plan 11, covering 1,702 grantees (residents of
countries other than France) and representing 580,848shares;
•a Stock Appreciation Right plan, covering 118 grantees and
representing 328,153shares.
Description of the stock option plans
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 may 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% of the options granted is dependent on specifi c
targets being met (see page 254). Effective from January2009, all
of the options granted to members of the Management Board are
subject to performance criteria.
Because targets were only partially achieved, 236,200options
granted under plans 21 and 24 were cancelled. Half of the options
granted under plan30 (or 443,976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 threeyears and twoyears
respectively. The vesting and lock-up periods for stock grants made
under plans8 and 10 are at least twoyears each.
The vesting period for stock grants made to residents of countries
other than France under plans4, 6, 9 and 11 is 4years, with no
lockup 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 256). With effect
from January2009, all of the stock grants made to members of the
Management Board are subject to performance criteria.
In 2010, 50% of the stock grants made under plans3 and 4 were
cancelled, representing 58,700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 lockup arrangements:
•a certain number of shares arising from the exercise of options
granted under plans 30 and following 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 realised 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
following 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
Mr Jean-Pascal Tricoire
As of December31, 2010, Jean-Pascal Tricoire held 429,668options
(including 95,000 performance options), 48,750 performance stock
grants and 8,669 vested stock grants received under stock grant
plans1 and3. The lock-up period for the vested stock grants will
end on December21, 2011 (for plan1) and December19, 2012
(for plan3).
In 2010, 50% of the stock grants made under plans30 and 3 were
cancelled, representing 31,500options and 3,375shares, given that
the applicable performance criteria were not met.
During the year, Jean-Pascal Tricoire exercised 35,338options
granted under plan21 at an exercise price of EUR45.21 and
75,000options granted under plan24 at an exercise price of
EUR55.55.
Mr Emmanuel Babeau
As of December31, 2010, Emmanuel Babeau held 20,000options,
including 15,000 performance options, and 15,000 stock grants, of
which 13,750 performance stock grants.
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 253
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