APC 2015 Annual Report Download - page 283

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 281
INFORMATION ON THE COMPANY AND ITS CAPITAL
7
SHARES ANDSTOCKOPTIONPLANS
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6. Shares andstockoptionplans
Shares and stock option plans(1)
Grant policy
As part of its overall staff pay policy, each year Schneider Electric
sets up a long-term incentive plan. This plan is based on an
annual allocation of performance shares. Stock options, until
December 2009, and, for employees who are U.S. citizens or
residents, stock appreciation rights (SARs) have been granted. No
stock options have been granted since 2009.
These plans are established by the board of directors, which makes
decisions based on the report from the Human Resources and CSR
committee.
Benefi ciaries include members of Senior Management, top
managers of the Group in all countries, high-potential managers
and employees whose performance was judged remarkable. There
were 3,222 benefi ciaries in the framework of the 2014 long-term
incentive plan and 3,153 in the framework of the 2015 long-term
incentive plan.
Allocations to Group Senior Management, including executive
offi cers, represented 11.8% of the total attributions in the framework
of the 2014 long-term incentive plan. They are of 10.9% in the
framework of the 2015 long-term incentive plan.
Besides, Schneider Electric exceptionally grants free shares. These
grantes are decided by the board of directors when it considers
that, instead of allocating cash, a payment in shares is preferable to
correlate this benefi t with Group’s long-term development through
the evolution of the share price and/or create a retention element
(see one-off lumpsum granted to executive offi cers under plans 19
and 20).
Description of performance shares allocated
For the French plans (plans 15, 15bis, 17, 17bis, 21 and 21bis ), the
vesting and lock-up periods for stock allocations are at least two
years each.
For international plans (plans 11bis, 14, 14bis, 14ter, 16, 16bis, 18
and 18bis , 22 et 22bis ), the vesting period for share allocations is
four years. There is no lock-up period.
Performance shares vest only if the benefi ciary is a Group employee
as of the vesting date and if certain performance targets, detailed
below, are met (see page 285 ).
Since January 2009, for executive officers , and since
December 2011 for members of the Executive Committee,
allocations of performance shares are fully subject to the
achievement of performance conditions.
Description of the options allocated
The option exercise price was equal to the average closing price of
the twenty trading days prior to the date of allocation. No discount
is applied.
Since2006, the options had a 10- year life. They might be exercised
until after the fourth year. However, they might be exercised before
maturity in the case of a takeover bid for the company’s shares.
Options could only be exercised by Group employees. In addition,
exercise of all or part of the options was dependent on specifi c
targets being met, detailed below (see page282 ). All of the options
granted to executive offi cers were subject to performance criteria
since January2009.
Description of Stock Appreciation Rights (SARs)
SARs mirror the mechanism of options. They are subject to
conditions, particularly performance criteria. The benefi ciary
receives the proceeds in cash.
Lock-up period applicable to executive officers
The board of directors has set:
•a retention target of shares representing three years of base
salary for Mr.Jean-Pascal Tricoire, and two years of base salary
for Mr.Emmanuel Babeau. Calculation of the number of shares
held is based on Schneider ElectricSE shares and the equivalent
in shares of the corporate mutual fund units invested in Schneider
Electric shares held by the benefi ciaries.
In accordance with the provisions of articles L. 225-185 and
L. 225-197-1 of the French Commercial Code and the AFEP/
MEDEF guidelines, the board of directors has approved the
following:
•retention of a proportion of shares arising from the exercise
of options granted under plans 30 et seq must be held in a
registered account. This number corresponds to a percentage
of the capital gains realized through exercise of the options, net
of taxes and mandatory contributions and the sums necessary
to fund the purchase of such shares. The percentage is fi xed
at 25% for Mr.Jean-Pascal Tricoire and 15% for Mr.Emmanuel
Babeau;
•mandatory retention beyond the lock-up period of a percentage
of the shares acquired under plans3 et seq . The percentage is
fi xed at 25% for Jean-Pascal Tricoire and 15% for Emmanuel
Babeau;
(1) The figures below have been calculated where necessary to take account of the two-for-one share split, effective from September 2, 2011.