APC 2011 Annual Report Download - page 251

2492011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
GENERAL PRESENTATION OF SCHNEIDERELECTRICSA
7
PERFORMANCE SHARE GRANTS ANDSTOCK OPTION PLANS
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6. Performance share grants
and stock option plans
Performance share grant plans with
performance criteria and stock option plans
The fi gures below have been calculated where necessary
to take account of the two-for-one share split, effective from
September2,2011.
Grant policy
As part of its overall staff pay policy, each year Schneider Electric
sets up a long-term incentive plan based on an annual allocation of
stock grants, and, for employees who are US citizens or residents,
Stock Appreciation Rights (SARs) that are akin to stock options,
and stock options until December 2009. Since December 2010,
stock options have no longer been granted. Phantom shares which
track performance share grants have also been granted to certain
benefi ciaries in emerging market countries.
These plans are established by the Management Board, as
authorized by the Supervisory Board, which takes decisions based
on the report from the Remuneration, Appointments and Human
Resources Committee.
Benefi ciaries include members of Senior Management, top
managers of the Group in all countries, high-potential managers
and employees whose performance and potential were
judgedexceptional.
Each year Schneider Electric increases the number of benefi ciaries
of the annual plan. There were 1,579benefi ciaries in 2009, 2,360 in
2010 and 2,637 in 2011.
Allocations to Senior Management, including corporate offi cers,
dropped from 17% of the total in 2006 to 11.1% in 2011.
The annual plans are set up in December for the following fi scal
year so that benefi ciaries can be informed of their stock option and
performances shares grants at the same time as their targets for
the year ahead.
The annual plan for 2012 was set up in December2011. It comprises
the following plans, all of them subject to performance criteria:
•performance share plan13 and 13bis, concerning 647,943shares
and 608benefi ciaries (French residents);
•performance share plan 14 and 14bis, concerning 1,386,800shares
and 2,029benefi ciaries (residents of countries other than France);
•SAR plan, concerning 816,636 SARs and 145 benefi ciaries
(American citizens or residents);
•Phantom shares plan concerning 70,272  phantom shares and
274 benefi ciaries.
Description of the shares allocated
The vesting and lock-up periods for performance shares allocations
to residents of France under plans5 and 7 are threeyears and
twoyears respectively. The vesting and lock-up periods for stock
allocations made under plans8, 10, 10bis, 13 and 13bis are at least
twoyearseach.
The vesting period for performance shares allocations made to
residents of countries other than France under plans 6, 9 and 11,
11bis, 12, 14 and 14bis is fouryears, with no lock-up period.
Similarly the benefi ciaries of phantom shares have a vesting period
of three years.
performance shares grants and phantom shares vest only if the
benefi ciary is a Group employee as of the vesting date and if certain
performance targets, detailed below, are met (see page 253 ).
Since January 2009, for members of the Management Board, and
since December 2011 for members of the Executive Committee,
allocations of stock grants are fully subject to the achievement of
performance conditions.
Description of the stock option plans
The option exercise price is equal to the average closing price
of the twenty trading days prior to the date of allocation by the
Management Board. No discount is applied.
Since 2006, the options have a ten year life. They may not be
exercised until after the fourth year. However, they can be exercised
before maturity in the case of a takeover bid 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 citizens and
residents may exercise their rights following the third year under
certain plans.
Options may only be exercised by Group employees. In addition,
exercise of 50% of the options allocated is dependent on specifi c
targets being met, detailed below (see page251 ). Effective from
January 2009, all of the options granted to members of the
Management Board are subject to performance criteria.
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 benefi ciary receives the proceeds in cash.