APC 2011 Annual Report Download - page 267

2652011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
8
AUDITORS’ SPECIAL REPORTS
Agreements submitted totheshareholders for
approval atthe shareholders meeting
Agreements and obligations authorised since year-end
We have been advised of the following commitments and obligations,
authorised since the end of the previous fi nancial year, which were
subject to advance authorisation by your Supervisory Board.
The adaptation of the top-hat pension plan with defi ned
contributions for the French Group Senior Executives.
Persons involved: Jean-P ascal Tricoire (President and CEO) and
Emmanuel Babeau (Board Member).
Your Supervisory Board, in its meeting of 21 February 2012,
authorised the change to the top-hat pension plan with defi ned
contributions for the Group managers that are subject to French
social security plans (article 39), the benefi ts of the modifi ed
plan for Board members and the signing by your company of an
outsourcing agreement for the new plan under the terms of the
regulated agreements and obligations. The Board members have
a direct or indirect interest.
The modifi cation aims to make this plan compliant with the AFEP/
MEDEF Business Governance Code by making provision for linking
acquisition of rights to length of service in the company. In order to
conform to these recommendations, the reform anticipates:
•closure of the current article 39 plan to all new entrants;
•the implementation of a new article 39 plan applicable to
members of the Executive Committee and the Management
Board, which provides for the progressive vesting of rights
according to seniority in the Group and the Executive Committee.
Full rights are gained after 15 years of service for a new entrant
to the plan, except for the Group service condition. Conditional
rights under the new plan are deducted from the current article
39 plan maintained for its current benefi ciaries.
This new plan is contingent upon completing a career in the
company with the fl exibility introduced by Social Security in
2004. A conditional assurance income is thus maintained in
the event of dismissal or redundancy after 55 years of age
without restarting work or for 2nd or 3rd category disability as
defi ned by Social Security without restarting work.
In other cases, the new plan includes the provisions of the
current plan, notably:
–limiting the top-hat pension to 25% of the Reference Salary
(60% of the difference between the average remuneration
for the last 3 years and the total annuities paid from external
pension plans) considering the pension paid for the article 83
plans implemented by the Group (unchanged from current
plan);
–the right to a widow/widower’s pension for the surviving
partner;
–a spouse’s pension if a director dies before retirement age is
limited to rights acquired by the date of death;
–pension supplement paid to a director from the retirement date
after disability occurring during work activities.
•outsourcing of the new article 39 plan: this outsourcing is
mandatory. To this effect, an insurance contract for company
pensions with defi ned contributions (Article L. 137-1 of the Social
Security code) was signed on 23 February 2012 by Schneider
Electric SA and Schneider Electric Industries SAS with AXA
France Vie.
The nature of the contract guarantees and the implementation and
operation methods were defi ned in accordance with legislative
and regulatory provisions. The contract was agreed with normal
insurance contract conditions, under which implementation
depends on duration of human life.
It aims to guarantee payment of annuity arrears due under the
rules of the new plan for contracting companies. It takes effect
on 1 July 2012 and can be terminated each year by the parties
provided notice is given before 31 October that will take effect on
31 December of the same year.
The insurance premium amounts will be established according
to the periodic results from actuary experts for the respective
commitments of the contracting companies.
The guarantees agreed by the insurer were agreed under normal
conditions.
On the date that the contract comes into effect, the insurer will open
a collective pension fund for the contracting companies. This fund
will cover commitments resulting from the plan. The net premiums
collected by the insurer will be allocated to technical provisions for
this collective fund. Contracting companies will have recourse to
arbitrage as support for the investment.
Provisions relating to the payment of employee and former
employee rights and to the annuity service are standard provisions.
The particular provisions relate to:
–elements of the foundation agreement and rules of the top-hat
pension plan for senior executive members of the Executive
Committee for the Schneider Electric Group, provided it shall
be adopted through the unilateral decision by the contracting
companies; and
–commitments made to benefi t the corporate offi cers for which
the procedures established by the French Commercial Code
are applicable.
A special revaluation fund for the annuities currently being paid
will be formed. The contracting companies will be able to decide
their allocation freely when their balance exceeds 10% of the policy
liabilities for the annuities being paid (i.e. to all the stockholders or
to the collective funds).
Agreements and obligations to Jean-Pascal Tricoire.
Person involved: Jean-P ascal Tricoire (President and CEO).
Within the scope of renewing the appointment of Jean-Pascal
Tricoire, on 21 February 2012 your Supervisory Board decided to
renew, under the conditions of the adjustments presented below
for the supplementary cover of health, incapacity, disability and
death risks, the top-hat pension plan and the benefi ts of forced
dismissal compensation, the rewritten article of association
concerning Jean-Pascal Tricoire that was produced in agreement
with Mr Tricoire following his decision to resign from his employment
contract on 2 May 2009 and approved by the Shareholders’
Meeting of 23 April 2009.
This commitment is subject to approval by the Shareholders’
Meeting for approval of year-end fi nancial statements on 31
December 2011.