APC 2013 Annual Report Download - page 298

8SHAREHOLDERS’ MEETING
REPORT OF THE BOARD OF DIRECTORS TO THE COMBINED ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
benefits from an Involuntary Severance Pay that may not
2°) objectives, used to determine the variable portion of Mr
exceed, considering the non-compete compensations Tricoire's compensation for the three completed financial
specified above that may be paid to him, twice the years preceding his departure, must be equal to 66% of the
mathematical average of the effective annual compensation target, not the previous 50%.
(fixed and variable) for the last three years (hereafter
By the sixth resolution, we request that you approve the status of
“Maximum amount”).
MrBabeau. MrBabeau is covered by a Schneider Electric
The right to compensation shall only apply in the following IndustriesSAS employment contract as well as a Schneider
cases: Electric Services Investissement management contract which
guarantee him a certain number of benefits linked to the
MrTricoire is dismissed, is not reappointed, resigns as a(i)
termination of his duties. However, on the occasion of the
member or Chairman and CEO within 6 months (and not
appointment of MrBabeau as the Executive Vice-president in
within 12 months as previously stated) following a material
charge of finances and legal affairs, your board of directors
change in Schneider Electric’s shareholder structure that
decided in accordance with the recommendations of the AMF to
could change the membership of the board of directors,
submit these commitments to the approval of the annual General
MrTricoire is dismissed, is not reappointed, resigns as a(ii)
Meeting as part of the provisions of the TEPA Act. On this
member or Chairman and CEO following reorientation of the
occasion, the board aligned them, pursuant to the provisions of the
strategy pursued and promoted by him until that time,
French Labor Code, with those granted to MrTricoire as required
whether or not in connection with a change in Schneider
by his status.
Electric's shareholder structure as described above,
You are therefore requested to approve these commitments
Mr Tricoire is asked to resign, is dismissed or is not(iii)
pertaining to the benefit by MrBabeau to the same rights as
reappointed as a member or as Chairman and CEO when
MrTricoire and under the same conditions:
two-thirds (and not 50% as previously) of the mathematical
average for the rate of achievement of Group objectives used the Group employee benefit plan for French executives for
1°)
to calculate the variable portion of his remuneration are health, incapacity, invalidity and death and cover under
achieved for the four completed financial years preceding his Group individual accident policies;
date of departure. The latter case in fact corresponds to a compensation in case of involuntary departure;
2°)
presumption of Involuntary Severance resulting from a the retention of his stock options or performance shares in
3°)
change of strategy. case of involuntary severance;
In addition, the Involuntary Severance Pay is subject to
the benefit of non-compete compensation provided that the4°)
performance criteria. Compensation and the amount thereof is in
compensation that would be paid to him is 50% or 60% of
fact dependent on the mathematical average of the rate of
his last effective compensation depending on whether or not
achievement of Group objectives used to determine the variable
his departure is the result of dismissal.
portion of MrTricoire’s target compensation for the three We would like to stress the fact that overall, the benefits thus
completed financial years preceding the date of the board meeting granted to MrBabeau in case of departure from the Group are
at which the decision is taken. more limited than those that would stem from his employment
Accordingly, if: contract. His entitlement to compensation is contingent on an
less than two-thirds of the Group's objectives are fulfilled (and
l
Involuntary Severance linked to a change of control or strategy and
not at least half as previously stated): no compensation will be the amount is capped at two years of compensation subject to the
paid; achievement of performance conditions and considering the
non-compete compensations, if any, that would be paid to him.
two-thirds are fulfilled (and no longer half): he will receive 75% of
l
However, by virtue of the provisions of the French Labor Code,
the Maximum Sum; MrBabeau in any case retains the right to receive conventional or
at least 100% fulfilled: he will receive 100% of the Maximum
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statutory severance pay. Similarly, the benefit of coverage under
Sum; the Group's employee benefit plan for French executives for major
between 66% and 100% fulfilled: he will receive between 75%
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hazards and the Group's individual accident insurance policies, is
and 100% of the Maximum Amount calculated on a straight-line contingent on the achievement of the performance criteria.
basis according to the rate of achievement.
Consultation of shareholders on the individual
We note that the arithmetical average of the rate of achievement
for Group objectives for the last three financial years (2011 to
compensation of executive directors
2013) was 117,4%;
– Resolutions from the seventh to the eighth
It is also provided that involuntary termination benefits will not be
resolutions –
due if the dismissal or resignation requested of Mr
Jean-PascalTricoire is motivated by serious or gross misconduct In accordance with the provisions of the AFEP/MEDEF code, you
according to the criteria adopted by jurisprudence. are requested to issue a favorable opinion on the compensation
elements due or awarded under financial year 2013 to your
retains forthwith, subject to the performance criteria and only3°)
company's executive directors. These elements are presented to
in the event of involuntary severance that is not the result of
you in the tables below, on the understanding that they are
gross or willful misconduct (new criterion with respect to the
detailed in chapter3.7 of the reference document, and with
previous status), the benefit of all of his stock options and
respect to the benefits granted in the event of the termination of
bonus or performance shares awarded or yet to be awarded.
the duties of the parties concerned in the preceding paragraphs.
The performance criterion states that the mathematical
average of the rate of achievement of Group performance
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