2010Annual Report - Schneider Electric CZ, s.r.o.

ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
MANAGEMENT BOARD’S REPORT TO THE ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
In the sixteenth resolution, you are asked to authorise the
Management Board to issue, in France and abroad, the shares
and share equivalents mentioned in the fi fteenth resolution without
pre-emptive subscription rights for existing shareholders. This
authorisation may be used to issue shares of the Company on
conversion, redemption, exchange or exercise of share equivalents
issued by Schneider Electric SA’s direct or indirect subsidiaries with
the Management Board’s agreement.
The issued share capital may be increased during the period by a
maximum aggregate amount of EUR217 million or 27.12 million
shares (10% of the capital). The EUR217 million ceiling counts
towards the EUR800 million ceiling provided for under the fourteenth
resolution. It will not include the par value of any shares to be issued
to prevent dilution of the rights of holders of share equivalents.
The authorisation to issue shares and share equivalents without
pre-emptive subscription rights is designed to allow the Board to
carry out issues quickly, in order to take immediate advantage of
opportunities before they disappear, and to expand the shareholder
base by placing the issues on foreign or international markets.
To protect shareholders’ rights in this type of transaction:
• the Management Board would grant shareholders a nontransferable
priority subscription right for a minimum of three
days;
• in accordance with the French Commercial Code, the share
issues would be carried out at a price at least equal to the
weighted average price for the Company’s shares over the three
trading days preceding the date on which the share or share
equivalent issues were decided by the Management Board. They
may be issued with a maximum discount of 5%.
The seventeenth resolution authorises the Management Board to
increase the number of shares to be issued in application of the
fourteenth or sixteenth resolutions if the issues are oversubscribed.
The supplementary capital increase that may be made within 30
days after the initial subscription period closes may not exceed 15%
of the original increase and must be carried out at the same price.
It also remains subject to the applicable ceilings mentioned above.
In the nineteenth resolution, you are asked to authorise the
Management Board to issue, in France and abroad, shares and
share equivalents by private placement. The issued share capital may
be increased during the period by a maximum aggregate amount
of EUR108 million or 13.5 million shares with a par value of EUR8
each (5% of the capital). We remind you that the French Monetary
and Financial Code has made it possible for companies to carry
out capital increases through private placements with the goal of
optimising access to capital markets and obtaining the best possible
market conditions. The private placements are issues without
pre-emptive subscription rights that would exclusively concern (i)
individuals or entities providing portfolio management services and
(ii) qualifi ed investors or a restricted group of investors, provided
that these investors are acting on their own behalf. The issue price
pursuant to this authorisation will be at least equal to:
(i) the weighted average price quoted for the shares on the NYSE
Euronext Paris stock exchange over a maximum period of six
months preceding the issue pricing date; or
(ii) the average price weighted by trading volume on the regulated
NYSE Euronext Paris stock exchange on the trading day
preceding the issue pricing date,
less in both cases and if appropriate, a discount of up to 5%. The
Management Board will be authorised to select either (i) or (ii) at its
discretion.
Any issues carried out pursuant to this authorisation will be included
in the EUR217 million ceiling set in the sixteenth resolution.
The eighteenth resolution authorises the Management Board to issue
shares or share equivalents within the ceilings set in the sixteenth
resolution in payment of shares of another company tendered to a
public exchange offer initiated by Schneider Electric. In accordance
with the provisions of the French Commercial Code, the Management
Board may also issue shares or share equivalents in payment for
shares or share equivalents contributed to the Company.
The fourteenth, sixteenth and nineteenth resolutions also authorise
the Management Board to issue securities providing for the
attribution of debt securities. The securities may be issued subject
to pre-emptive subscription rights (fourteenth resolution) or without
such rights and either by a public offering (sixteenth resolution) or by
private placement (nineteenth resolution). The upper limit for such
issues is set at a nominal issue amount of EUR3 billion.
The purpose of these authorisations is to give the Management
Board greater flexibility when it comes to selecting the type of
issues to be carried out, depending on demand and the conditions
prevailing in the French, foreign or international fi nancial markets.
Authorisation given to the Management
Board to grant stock options to officers and
employees of the Company and its subsidiaries
and affiliates
- twentieth resolution -
In April 2009, the Shareholders’ Meeting authorised the Management
Board to grant to selected employees and offi cers of the Company
and its subsidiaries and affi liates, as defi ned in article L. 225-180 of
the French Commercial Code, options exercisable for new Schneider
Electric SA shares or existing Schneider Electric SA shares. Under
this authorisation, the total number of options granted and not yet
exercised or cancelled shall not be exercisable for a number of
shares representing more than 3% of the issued share capital.
Pursuant to this authorisation, the Management Board has granted
0.8 million options representing 0.3% of the capital. Because
the exercise of all or part of these options is subject to revenue,
operating margin and other performance criteria, some may be
canceled. We inform you that half of the options granted under the
Group’s annual long-term incentive plan are subject to performance
criteria. In addition, in accordance with the AFEP/MEDEF guidelines
of October 6, 2008 all of the options granted in this framework to
members of the Management Board are subject to performance
criteria.
For this plan, which was implemented in December 2009:
• for 80% of the options allotted under condition of performance, an
average level for 2010 and 2011 of EBITA excluding restructuring
costs and the impact of acquisitions made after 31 December
2009: no options may be exercised for EBITAR of under 12.5%,
100% of options may be exercised for EBITAR of at least 13.5%,
with a linear distribution between both points. However, the goal
communicated to the market in early December 2009 was a
2009 EBITAR margin of around 12.5%;
• for 20% of the options allotted under condition of performance, a
portion of the Group revenues earned in emerging economies (at
constant exchange rates and excluding impacts from acquisitions
made after 31 December 2009), 100% of options allotted under
these conditions may be exercised for a percentage of at least
34%; no options may be exercised for a percentage under 32%,
with a linear distribution between both points.
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 265
8