Michelin couv courteGB

Proposed resolutions
Before presenting you with the resolutions we plan to submit
for approval at the Joint Shareholders Meeting of May 20,
2005 we would like to report to you on the use made of the
authorizations you gave us at the Joint Shareholders Meeting
of May 14, 2004 and particularly those concerning the
allocation of stock options, share buy backs and the Employee
Shareholder Plan.
• Stock options
The authorization you gave us was to grant share subscription
or purchase options up to a limit of 2,000,000 shares, or
1.40% of capital.
This authorization has yet to be used, since the share
subscription options granted in 2004 were based on the
authorization you gave us at the Annual Shareholders Meeting
of May 18, 2001.
During 2004, we granted 309,000 share subscription options
(0.2% of capital) to members of the Group’s Board and
management team following the Annual Shareholders
Meeting. This results from application of Group rules as and
when stock options are granted. Prior to granting the stock
options we duly consulted with your Supervisory Board. In this
connection, each Managing Partner was granted 10,000
options in May, at a strike price of €40. This brings the total
number of options held by each Managing Partner to 40,000.
Please refer to page 109 for our Statutory report on the stock
option plan.
We would remind you that ever since introduction of stock
option plans in 2002, Michelin has pursued a prudent and
cautious stock option policy. Options are granted without
discount at the market price prevailing at the time of allocation.
They may be exercised after four years, and Michelin is opposed
in principle to plans whereby the strike price can be reviewed
should the value fall below the purchase price. In the four years
to date, nearly one thousand people in the Company have
benefited from our Stock option plans.
• Share Buy Backs
In order to regulate the Company’s share price, you granted
us an 18-month authorization to purchase a maximum of 10%
of share capital at a maximum price of €60, and to sell at a
minimum price of €30.
In this connection, we purchased 500,192 shares (0.35% of
capital) in the course of financial year 2004, at an average price
of €39.96, and sold 655,584 shares (0.46% of capital) at an
average price of €41.83. At December 31, 2004, the Company
held no treasury stock.
• Employee Shareholder Plan
As part of the Employee Shareholder Plan, you also authorized
us to issue shares up to 1% of current share capital, for the
benefit of employees and subsidiaries of the Company. The
Company did not avail itself of this authorization in 2004.
We will convene a Joint Shareholders Meeting on May 20,
2005 to which we will submit the ordinary and extraordinary
resolutions for your approval.
Ordinary resolutions
Shareholders are invited to approve the operations reflected in
Company’s income statement and balanced sheet, as well as
proposed appropriation of net income for the year in the
amount of €295.151.971,68.
Based on this profit, an amount of €5,271,626.68 will be
attributed to the General Partners, in accordance with the
bylaws. The balance, €289,880,345.00 plus retained earnings
of €52,494,683.39 brought forward from 2003, representing
a total of €342,375,028.39 is available for distribution to the
Shareholders.
Based on this balance, we are asking the Shareholders
to approve the distribution of a total amount of
€179,233,781.25 or €1.25 dividend per share. This very
substantial increase is intended as a clear signal of confidence
sent to you, our Shareholders. It reflects both the significant
improvement of earnings and our positive view of the
Company’s long-term prospects and takes into account the
new dividend tax law. This important increase, after the pause
of last year as far as dividends were concerned, should place
Michelin among the best of the large companies.
If approved, the dividend will be paid on May 24, 2005, and
the Company’s shares will be quoted ex-dividend as of that
date.