APC 2010 Annual Report Download - page 268

ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
8MANAGEMENT BOARD’S REPORT TOTHE ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
Since 1995, almost all plans for long-term incentive options are
subject to conditions of performance over all or part of the options
granted. For the period 2000-2010 for plans whose conditions of
performance expired, more than 20% of the options thus subject
to conditions of performance were canceled due to the failure to
meet these conditions. Fifty percent of the options granted under the
2008 long-term incentive plan have been canceled. The conditions
of performance with which current plans are or were matched are
presented on pages 124 and following.
The authorisation made in 2009 expires in 2012 but the Management
Board nevertheless asks you to renew it forthwith for a period of
38months, subject to the following conditions:
•the total number of options granted and not yet exercised or
cancelled may not represent more than 1% of the Company’s
issued capital;
•the annual number of options granted, pursuant to this
authorisation, to members of the Management Board may not
represent more than 0.03% of the Company’s issued capital;
•the options’ period of validity may not exceed ten years;
•the exercise price may not be lower than the average of the
opening prices quoted for the Company’s shares over the twenty
trading days preceding the decision of the Management Board
to grant the options;
•all the options granted to members of the Management Board, in
the framework of the Group’s annual long-term incentive plans,
will be subject to performance criteria and 50% of the options
granted to other benefi ciaries in this framework will be subject to
performance criteria.
For 80% of the options subject to conditions, this will involve
target operating margin (EBITA), including, on a constant basis in
the target range, a margin of 13% to 16% of the Group through
a normal business cycle.
The Management Board, which intends to locate itself
dynamically in this range, will set the goal after approval of the
Supervisory Board.
For 20% of options subject to conditions, this will involve criteria
based on one of the Group’s major transformation goals for the
business program. As a result, it was used for the most recent
long-term incentive plans, conditions based on the share of
Group revenues in emerging economies.
We remind you, moreover, that the members of the Executive Board
are bound by obligations to retain their shares as a result of the
exercise of their options, which are presented on pages 124 and
following.
Authorisation to grant existing or new shares
to officers and employees of the Company
and its subsidiaries and affiliates, subject to
performance criteria if appropriate
- twenty-first resolution-
The Shareholders’ Meeting held on April23, 2009 authorised the
Management Board to grant shares without consideration to the
offi cers and employees of Schneider Electric SA and its subsidiaries
and affiliates, as defined in article L.225-197-2 of the French
Commercial Code.
Pursuant to this authorisation, the Management Board has granted
1.4million shares, representing0.53% of the capital, including:
•546,000shares under the 2010 long-term incentive plan (plans 8
and 9), awarded to 1,579 benefi ciaries including 12,500shares
awarded to the two members of the Management Board;
•913,600shares under the 2011 long-term incentive plan (plans 10
and 11), awarded to 2,360 benefi ciaries including 35,000shares
awarded to the two members of the Management Board.
Half of these share grants are subject to performance criteria. In
accordance with the AFEP/MEDEF guidelines of October6, 2008,
all of the shares granted to members of the Management Board
in this framework are subject to performance criteria. Half of the
shares granted under the 2008 long-term incentive plan have been
cancelled (see page 256).
For the last two long-term incentive plans, the defi ned performance
criteria, which are in line with the Group’s business plan objectives,
are as follows:
a) For the 2010 annual plan implemented in
December 2009
•for 80% of the options allotted under condition of performance,
an average level for 2010 and 2011 of EBITA excluding
restructuring costs and the impact of acquisitions made after
31 December 2009: no options may be exercised for EBITAR of
under 12.5%, 100% of options are allotted for EBITAR of at least
13.5%, with a linear distribution between both points. However,
the goal communicated to the market in early December 2009
was a 2009 EBITAR margin of around 12.5%;
•for 20% of the options allotted under condition of performance, a
portion of the Group revenues earned in emerging economies (at
constant exchange rates and excluding impacts from acquisitions
made after 31 December 2009), 100% of options allotted under
these conditions may be exercised for a percentage of at least
34%; no options may be exercised for a percentage under 32%,
with a linear distribution between both points.
b) For the 2011 annual plan implemented in
December 2010
•for 80% of the shares granted on condition of performance, a
medium level, for 2011 and 2012, EBITA excluding restructuring
costs and excluding the impact of acquisitions made after 31
December 2010. The target that was set is part of the margin
target of 13% to 16% of EBITA for the One business program
during a normal business cycle;
•20% of the shares granted under conditions of performance,
a positive growth differential for Group revenues related to
worldwide GDP as part of the wider aim of the One business
program of organic growth equal to worldwide GDP plus three
points throughout the cycle.
In addition, in accordance with the law, the shares allocated to
French tax residents include a vesting period of at least two years
and a retention period of two years. Those granted to employees
who are not tax residents of France include a vesting period of four
years and no retention period.
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC266