APC 2015 Annual Report Download - page 304

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC302
ANNUAL SHAREHOLDERS’ MEETING
8REPORT OF THE BOARD OF DIRECTORS TO THE COMBINED ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
It has come to the Board’s attention that in addition to the fact
that the signatory partners of each of the two fi rms will have been
reappointed respectively in 2015 and 2016, assuring a renewal to
the approach to audits:
•in application of the new European standards on statutory
auditing, the fi rm Ernst & Young et Autres may not be re-elected
beyond 2022 and the fi rm Mazars beyond 2028;
•a n invitation to tender would mean signifi cant workload for the
Group’s teams, while, given the rules regarding incompatibilities, an
invitation to tender of this kind in 2015 only offered a few alternatives;
•that an invitation to tender in 2022 should attract more applications
because the new rules regarding statutory auditing focus mainly on
identifying new players.
Accordingly, your board of directors considered that it was in the
Company’s best interests to re-elect the statutory auditors, particularly
as they have an excellent understanding of the Group and are perfectly
equipped to ensure good audit coverage, which are important factors
to take into account in the current climate.
Your board of directors therefore requests that you appoint, for a term
of six years, which will expire at the Annual Shareholders’ Meeting to
approve the 2021 annual accounts, the company Ernst & Young et
Autres and the fi rm Mazars as statutory auditors and the company
Auditex and Mr. Thierry Blanchetier as alternate auditors.
Share buybacks – Eighteenth Resolution
We request that you renew the authorization given to the company
by the Annual Shareholders’ Meeting of April21, 2015, to buy back
its shares by any appropriate method, including through the use of
derivatives, pursuant to the provisions of Article L. 225-209 of the
French Commercial Code.
The company buyback programs may have various objectives: to
reduce capital stock, cover stock purchase option plans or other
share allocations to employees or corporate offi cers, fulfi ll obligations
related to convertible bonds, and engage in external acquisitions and
market making as part of a liquidity contract.
Shares bought back may be canceled under the authorization (Twenty-
second Resolution) adopted by the 2015 Annual Shareholders’
Meeting.
We remind you that in February 2016, Schneider Electric, which in
2015 had announced its intention to buy back its own shares in an
amount of EUR1 to 1.5billion over the period 2015-2016, stated that
the Group had targeted a cumulative buyback amount of around
EUR1.5billion for the 2015-2016. These buybacks are part of a policy
to neutralize the dilution resulting from capital increases linked to the
acquisition of Invensys or reserved to employees, or resulting from
performance action plans and the exercise of options.
As part of the authorization granted at the Annual Shareholders’
Meeting on April 21, 2015, Schneider Electric proceeded in 2015
and early 2016 to buy back 12.65million shares, for a total sum of
EUR700million.
Further information on your Company’s share buyback programs can
be found on page 278 .
You are asked to authorize the company to buy back shares
representing a maximum of 10% of the issued capital as of the date of
the Meeting (for reference purposes, based on the issued capital on
December31, 2015: 58,757,304 shares). The maximum purchase
price is set at EUR90. We remind you that this authorization may not
be used during public offer periods.
1.2 Extraordinary Meeting
Authorization to the board of directors to
allocate free shares (issued or to be issued)
to officers and employees of the company or
of companies affiliated therewith, subject to
performance conditions, as applicable, within
the limit of 2% of the share capital, with waiver
by shareholders of their subscription rights -
Nineteenth Resolution
Background to the authorization:
The authorization to allocate free/performance shares was granted
by the Combined Annual and Extraordinary Shareholders’ Meeting
of April25, 2013 for a period of 38 months. It expires on June24,
2016. In This authorization allowed for the free allocation, to date,
of a total of 5.9 million shares, representing 1 % of the share capital
at December31, 2015. Detailed information on the plans for free/
performance shares allocated to date under this authorization can
be found on page 284 below.
Given the importance of this deferred compensation mechanism
(see p. 155 ), you are requested to renew this authorization.
Structure of the authorization:
(i) Dilution
•the total amount of shares allocated may not represent more
than 2% of the capital over three years, subject to potential
adjustments which may be applied in the event of a transaction
involving the c ompany’s share capital;
•the annual number of shares granted to the c ompany’s senior
corporate offi cers (the CEO and the Deputy CEO ) pursuant to
this authorization may not exceed [0.03]% of the capital per year.
(ii) Characteristics
•beneficiaries: shares may be allocated to senior corporate
offi cers, members of the Executive Committee, key managers of
the Group in all countries, and to high-potential employees or to
those whose performance is deemed remarkable;
•vesting/holding period: under long-term incentive plans, the
vesting period may be no shorter than three years. It may be
accompanied, or not, by a holding period;
•under annual long-term incentive plans, all shares allocated to
senior corporate offi cers of the c ompany and to members of the
Executive Committee will be subject to performance conditions.
For other benefi ciaries, the performance criteria will be on at least