APC 2014 Annual Report Download - page 218

5CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER31,2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Based on these assumptions, the amount recorded under«Selling, general and administrative expenses»for stock grant plans set up after
November7, 2002 breaks down as follows:
Full year 2014 Full year 2013
Plan 9 4
Plan 10 2
Plan 11 7 11
Plan 10 bis - -
Plan 11 bis - -
Plan 12 - -
Plan 13 and 13 bis - 10
Plan 14 and 14 bis 8 9
Plan 15 16 12
Plan 15 bis - -
Plan 16 20 15
Plan 16 bis - -
Plan 17 15 -
Plan 17 bis - -
Plan 18 20 -
Plan 18 bis - -
TOTAL 86 63
21.5.2 Worldwide Employee Stock Purchase Plan
in Schneider Electric shares at a preferential price. The bank
converts the discount transferred by the employee into funds with
Schneider Electric gives its employees the opportunity to become a view to securing the yield for the employee and increasing the
group shareholders thanks to employee share issues. Employees indexation on a leveraged number (factor of 9.67 in2014) of
in countries that meet legal and fiscal requirements have the directly subscribed shares.
choice between a classic and a leveraged plan.
As with the classic plan, and as per IFRS2, the share-based
Under the classic plan, employees may purchase Schneider payment expense is determined by reference to the fair value of
Electric shares at a 15% to20% discount (according to the the discount on the locked-up shares (see above). In addition, it
country) to the price quoted for the shares on the stock market. includes the value of the benefit corresponding to the issuer’s
Employees must then hold their shares for five years, except in involvement in the plan, which means that employees have
certain cases provided for by law. The share-based payment access to share prices with a volatility profile adapted to
expense recorded in accordance with IFRS2 is measured by institutional investors rather than to the prices and volatility profile
reference to the fair value of the discount on the locked-up they would have been offered if they had purchased the shares
shares. The lock-up cost is determined on the basis of a two-step through their retail banks. The volatility differential is treated as a
strategy that involves first selling the locked-up shares on the discount equivalent that reflects the opportunity gain offered to
forward market and then purchasing the same number of shares employees under the leveraged plan.
on the spot market (i.e., shares that may be sold at any time)
As regards the first semester 2014, Schneider Electric offers to its
using a bullet loan.
employees the opportunity to purchase shares at a price of
This strategy is designed to reflect the cost that, the employee EUR58.33 or EUR54.90 per share, depending on the country, as
would incur during the lock-up period to avoid the risk of carrying part of its commitment to employee share ownership, on June17,
the shares subscribed under the classic plan. The borrowing cost 2014. This represented a 15% to20% discount to the reference
corresponds to the cost of borrowing for the employees price of EUR68.62 calculated as the average opening price
concerned, as they are the sole potential buyers in this market. It quoted for the share during the 20days preceding the
is based on the average interest rate charged by banks for an management board’s decision to launch the employee share
ordinary, non-revolving personal loan with a maximum maturity of issue.
five years granted to an individual with an average credit rating.
Altogether, 3.7million shares were subscribed, increasing the
Under the leveraged plan, employees may also purchase company’s capital by EUR205million as of July24, 2014. Due to
Schneider Electric shares at a 15% to20% discount (according to significant changes in valuation assumptions, specifically the
the country) from the price quoted on the stock market. However, interest rate available to market participant, the value of the
the leveraged plan offers a different yield profile as a third-party lock-up period is higher than the discount cost. Therefore the
bank top up the employee’s initial investment, essentially Group did not recognize any cost related to the transaction.
multiplying the amount paid by the employee. The total is invested
216 2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC