APC 2014 Annual Report Download - page 298

8SHAREHOLDERS’ MEETING
REPORT OF THE BOARD OF DIRECTORS TO THE COMBINED ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ MEETING
Consequently by the Fifth Resolution, we request that you of a major capital change likely to give rise to a change in
approve the status amendments for Jean-Pascal Tricoire, as the composition of the board of directors,
discussed above, amendments which provide that Mr.Tricoire:
dissmissal, non-renewal, or resignation from his office as(ii)
Deputy Chief Executive Officer in the event of a change in
loses his entitlement to old and new defined-benefit pension(i) the strategy adopted and upheld up until then by him,
plans (article39) for French executives of the Group; regardless of whether this results from an above-mentioned
retains his entitlement to an income for his surviving spouse
(ii) capital change,
in the event of death and a disability annuity, as outlined dissmissal, non-renewal, or requested resignation from his
(iii)
above, in the event that these risks should occur before his office as Deputy Chief Executive Officer while the
retirement; arithmetical average of the achievement rate of the Group
that moreover, the supplementary benefit plans for sickness,
(iii) objectives, which determines the variable portion of his
incapacity, disability and death which Mr.Tricoire may be compensation, for the last four full financial years on the day
entitled to will be calculated on the basis of his overall of his departure is two-thirds achieved. The latter case in
remuneration (fixed/variable and annual supplement). fact corresponds to an assumption of involuntary departure
In accordance with the provisions of the French Commercial Code,
resulting from a change in strategy.
the rights relating to benefits are dependent on the fulfillment of Moreover, Involuntary Severance Pay is subject to performance
one or other of the following two criteria: the average net income conditions. It is in fact dependent on and its amount adjusted
for the last five financial years prior to the event is positive or the based on the arithmetical average of the achievement rate of the
average free cash flow amount for the five financial years prior to Group objectives, which determine the variable portion of the
the event is positive. target compensation of Mr. Babeau, for the last three full financial
The Sixth Resolution relates to the status of Mr.Emmanuel years on the date when the board acts.
Babeau. Accordingly, if the Group objective is:
Emmanuel Babeau was entitled to the article39 plans under his less than two thirds achieved: no compensation will be paid;
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employment contract with SEISAS. He therefore agreed to resign two thirds achieved: 75% of the Maximum Amount will be
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from this employment contract to give effect to the board of received;
directors decision of February18, 2015 to remove executive
officers' entitlement to the article39 plan. Consequently, the board at least 100% achieved: 100% of the Maximum Amount will be
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of directors decided to reiterate the other elements of his status received;
(benefits plan, involuntary severance pay and non-compete achieved between 66% and 100%: between 75% and 100% of
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compensation), which he had from his employment contract with the Maximum Amount will be received calculated in a linear way
SEISAS, which were at the expense of SEISAS, and are now at the based on the rate of achievement.
expense of Schneider Electric SE, subject to the above-mentioned It is also understood that the Involuntary Severance Pay will not be
adjustments. due if the requested dismissal or resignation of Mr.Babeau is the
Consequently, we request that you approve the amended status of result of misconduct which may be classified as serious or gross
Mr.Babeau which provides that he: with regard to the criteria adopted by the case-law;
is entitled to the benefits plans applicable to employees of1) is subject to a non-compete agreement, it being specified3)
Schneider Electric SE covering sickness, incapacity, disability that the non-competition commitment binding Mr. Babeau
and death, and supplementary coverage for sickness, and the company is limited to 1 year and is compensated up
incapacity, disability and death available to French senior to a maximum of 60% of the authorized target
executives of the Group, as well as the Group’s individual compensation. The board will decide on the application or
accident insurance. He is also entitled to an annuity for his not of the agreement at the time of termination of the
surviving spouse in the event of death and a disability concerned party, provided that this termination is not the
annuity, as outlined above, in the event that these risks occur result of a voluntary resignation (excluding Involuntary
before his retirement. It is specified that these supplementary Termination) and provided that the concerned party:
benefits will be calculated based on his overall remuneration has met the performance conditions on which payment of
–
(fixed, variable and annual supplement). These rights and risk Involuntary Severance Pay is dependent, and
coverage or supplementary coverage benefits are subject to is not or will not be entitled or in a position to accumulate
–
performance conditions. They are dependent on the the non-compete compensation with the payment of a
fulfillment of one or other of the following two criteria: the pension.
average net income for the five financial years prior to the
In all other cases (Involuntary Termination, resignation not meeting
event is positive or the average free cash flow for the five
the conditions above, etc.), the board will decide, within no longer
financial years prior to the event is positive;
than eight days of the termination of the concerned party, on the
is entitled to involuntary severance pay which may not2)
application or not of the non-compete clause.
exceed, taking into account the non-compete compensation
We would further remind you that Mr.Babeau is entitled– pursuant
described below which may be paid to him, twice the
to a decision approved by the Annual Shareholders' Meeting of
arithmetical average of the actual annual compensation (fixed
May6, 2014 - to the right to retain, subject to a performance
and variable) paid over the last three years (hereinafter
condition and only in the case of involuntary termination not
“Maximum Amount”).
resulting from serious or gross misconduct, all of his share options
This right to compensation is available only in the following cases: and free or performance shares allocated or which will be allocated
dissmissal, non-renewal, or resignation from his office as(i)
to him.
Deputy Chief Executive Officer occurring within six months
With regard to his former status, besides the loss of entitlement to
article39, Mr.Babeau primarily loses his entitlement to future
296 2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC