2007 Reference document (PDF) - Valeo

5 Information
PAGE 176
on the Company and its capital
General information about the issuer
Pension scheme
Thierry Morin is still a member of the supplementary pension
scheme set up for members of Valeo’s former Management Board,
as approved by the Supervisory Board on October 17, 2002. This
system is designed to top up existing pension benefits (statutory
pension, ARRCO, AGIRC, etc.) to enable beneficiaries to acquire
benefits representing 2% of their final salary per year of service
within the Group. The total amount of pension benefits may not
exceed 60% of a beneficiary’s final salary and the scheme will only
apply to beneficiaries who have a minimum of 15 years’ service in
the Valeo Group when they retire, and for whom Valeo or one of its
subsidiaries was their last employer at their retirement date.
In addition, since Thierry Morin was appointed Chairman of
Valeo (UK) Limited, contributions have been paid by Valeo (UK)
Limited into a pension fund to which Thierry Morin will be entitled
when his duties as Chairman of that company cease. His annual
supplementary pension benefits under this scheme were set at
60,980 euros when he took up his chairmanship in March 2001
and since then have been indexed annually based on the salary
index for the mechanical and electrical industries. Valeo (UK) Limited
recorded a 76,364 euro expense in relation to this scheme in 2007.
Compensation and benefits payable to Thierry Morin on termination
of his corporate duties and contingent on certain criteria have been
brought into compliance with the provisions of French Act 2007-1223
of August 21, 2007 (see below).
Termination benefits
In the event of the termination of his duties as corporate officer,
Thierry Morin will be awarded a termination benefit contingent on
certain criteria set at three times his most recent annual salary
(excluding bonuses). Compensation and benefits payable to
Thierry Morin on termination of his corporate duties have been
brought into compliance with the provisions of French Act 2007-1223
of August 21, 2007 (see below).
Compliance with the French Act of August 21, 2007
In accordance with Article L. 225-42-1 of the French Commercial
Code and Act 2007-1223 of August 21, 2007, the compensation and
benefits payable to Thierry Morin on the termination of his duties
or subsequent thereto must be contingent on criteria based on his
and the Company’s performance.
These legal provisions apply to the following benefits:
1) the lump-sum termination benefits payable to the Chairman,
corresponding to three times his most recent annual salary excluding
bonuses. Based on recommendations issued by the Nomination
and Remuneration Committee on March 19, 2008 the terms and
conditions applicable to the payment of this amount were amended
by the Board of Directors on March 20, 2008 and approved by the
Board as a related party agreement. Following said amendments
2007 Reference document - VALEO
this amount would be payable if the Board of Directors terminates
Thierry Morin ’s term of office (except on the grounds of gross
misconduct in the performance of his duties); or if he leaves the
Company of his own volition due to (i) a change of control or (ii) a
change in Valeo’s Board of Directors that is not recommended by
the Board or that would result in the Company implementing a new
business strategy with which Thierry Morin does not agree;
2) the benefits payable to Thierry Morin under the pension scheme
set up by Valeo (UK) Limited for which Valeo (UK) Limited sets
aside a provision each year (in an amount indexed to a defined
salary scale).
In accordance with Act 2007-1223 dated August 21, 2007 and
based on recommendations by the Nomination and Remuneration
Committee issued on March 19, 2008, on March 20, 2008 the
Board of Directors decided that the following performance-related
conditions must be met at the time of Thierry Morin ’s departure from
the Company in order for him to be eligible for the above-described
termination and pension benefits:
■ he must have received either all or part of his exceptional targetbased
bonus at least once in the last three years;
■ Valeo’s attributable net income for the last fiscal year must be
positive;
■ Valeo’s operating margin for the last fiscal year must be above
3%;
■ Valeo’s gross margin for the last fiscal year must be above 15%;
■ Valeo’s orders to OE net sales ratio must be above 1 on average
over the two last fiscal years.
The total amount received by Thierry Morin at the time of his
departure from the Company or subsequent thereto will be
determined as follows, with any reductions deducted first from his
lump-sum termination benefits and thereafter from the pension
benefits payable under the scheme set up by Valeo (UK) Limited:
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if 4 or 5 of the applicable conditions are met Thierry Morin will
receive 100% of the amounts concerned;
if 3 of the applicable conditions are met Thierry Morin will receive
70% of the amounts concerned;
if 2 of the applicable conditions are met Thierry Morin will receive
40% of the amounts concerned;
if less than 2 of the applicable conditions are met Thierry Morin
will receive 0% of the amounts concerned.
3.1.2. Total compensation paid to other
Group executive managers
The total gross compensation paid to Valeo’s Functional and
Operational Directors in 2007 amounted to 11,257,643 euros,
compared with 10,820,943 in 2006 and 10,438,062 euros in
2005. Of the 2006 total, 8,938,030 euros corresponded to fixed
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