APC 2014 Annual Report Download - page 297

SHAREHOLDERS’ MEETING
REPORT OF THE BOARD OF DIRECTORS TO THE COMBINED ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ MEETING
Agreements regulated by articlesL.225-38
indemnities, which, if applicable, could be counted towards the
involuntary termination benefits mentioned above;
andL.225-42-1– Fourth to Sixth Resolutions
in case of involuntary departure, and subject to performance
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We request that you approve the regulated agreements and criteria, shall retain all unvested stock options, stock grants and
commitments presented in the Statutory Auditor’s report drawn up performance shares; and
pursuant to articleL.225-40. These agreements relate in particular are entitled to old and new supplementary defined-benefit
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to the compensation of the Lead Director, to an amendment in the pension plans (article39) applicable to Group senior executives
status of Jean-Pascal Tricoire and to the renewal of that of introduced in 1995 and 2012 respectively, and for Mr.Babeau,
Emmanuel Babeau due to his resignation from of the employment the supplementary defined-contribution pension plans
contract which associates him to Schneider Electric Industries SAS applicable to Group senior executives.
(SEISAS)
Nonetheless, your board of directors, in accordance with the new
In the Fourth Resolution, we request that you approve the provisions of the French Commercial Code, has reviewed the
agreement setting Léo Apotheker’s annual compensation as above-mentioned regulatory agreements and commitments
Vice-Chairman Lead Director at EUR250,000, with the entered into in previous financial years. The board noted, in this
understanding that as a company Director, Mr.Apotheker also regard, that the price of supplementary defined-benefit pension
receives attendance fees, which in 2014 totaled EUR109,000. plans (article39) or “top hat pension plans” had become extremely
Moreover, it is understood that Mr.Apotheker may, in performing high due to the French legislator’s decision to increase their cost
his duties, use the resources of the senior management and is significantly. Accordingly, it was noted that, according to the firm
therefore entitled to enlist the services of an assistant, use an office Towers Watson, an independent expert consulted by the
at the Company headquarters, and the car and driver services of Governance & remuneration committee, following recent provisions
the Group’s Senior Management. of the social security financing law for 2015, which increased
Under this same resolution, we also request that you note the mandatory levies on article39 plans, the pensions of the two
continuance of the conventions and agreements governing the executive officers would account for, on the date of entitlement to
status of Jean Pascal Tricoire and Emmanuel Babeau in 2014. their pension (assuming that this date is that of their 62nd birthday),
Jean-Pascal Tricoire’s status was renewed and amended by the a charge of around EUR44million in the Company accounts,
board of directors at its April25, June18 & 19, and October24, EUR18million of which relates to mandatory levies. As a result, the
2013 meetings to make it compliant with the new board of directors has decided to suppress this benefit granted to
recommendations of the AFEP/MEDEF corporate governance the two executive officers. This decision will result in a provision
guidelines. It was approved by the Annual Shareholders' Meeting reversal of EUR17million into the 2015 accounts. For other French
of May6, 2014. Emmanuel Babeau’s status was adopted by the executives who are entitled to such pension plan the Group's
board of directors at its June18 & 19 and October24, 2013 senior management has been asked to consider the arrangements
meetings, and then approved by the Annual Shareholders' Meeting for the provision's reform or cancelation.
on May6, 2014. However, in the event of death, the 1995 and 2012 article39 plans
Under their respective agreements, presented in detail in pages provide for the payment of a pension to the surviving spouse
158 and 159, Jean Pascal Tricoire and Emmanuel Babeau: starting from the date of death, and in the event of disability, the
payment of an income starting from the age of 60. The board of
are entitled to the benefits plans applicable to employees of
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directors has decided to uphold these benefits. As a result, it has
Schneider Electric SE and of SEISAS covering sickness, been made:
incapacity, disability, and death, and, subject to performance
conditions, supplemental coverage for sickness, incapacity, that in the event of death of concerned parties before their
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disability, and death available to senior executives of Schneider retirement, or if they have left the company, due to disability or
Electric, as well as the Group’s individual accident insurance; removal from office after the age of 55 without pursuing any
professional activity, the surviving spouse will be entitled to a life
are bound by a one-year non-compete agreement if they leave
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annuity equal to 60% of 25% of the average remuneration paid
the Group, under which Mr.Tricoire would receive 60% of his for the three years prior to the date of death, with the deduction
target compensation (fixed and target variable), and Mr.Babeau made of the theoretical income which could have been obtained
would receive 50% of his annual paid compensation (fixed and from any supplementary compensation which would have been
variable), increased to 60% in the event of dismissal; paid;
are entitled, subject to performance conditions, to a severance
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that in the event of disability of concerned parties, involving the
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payment in case of involuntary termination, capped at twice the termination of all professional activity, they will be entitled to an
arithmetic mean of the effective annual compensation (fixed and annuity (transferable to the surviving spouse up to 60%) starting
variable) for the last three years, taking into account from their retirement and equal to 25% of the average
compensation provided for in the non-compete agreement remuneration paid for the three years prior to the date of
described above and provided that such departure follows a disability, less 1.25% per missing quarter to obtain a pension at
material change in Schneider Electric’s shareholder structure or the full rate and deduction made of the theoretical income which
a re-orientation of the strategy pursued and promoted by them. could have been obtained under insurance terms and conditions
Mr.Babeau, who has a work contract, is entitled in the event of at the time of disability.
termination to termination indemnities, pursuant to the industry
collective bargaining agreement, or to statutory termination
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2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC