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

ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
MANAGEMENT BOARD’S REPORT TO THE ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
We ask you to renew this authorisation forthwith subject to the
following conditions:
• the total number of shares granted may not represent more than
1.3% of the Company’s issued capital;
• the annual number of shares granted, pursuant to this
authorisation, to members of the Management Board may not
represent more than 0.03% of the Company’s issued capital;
• the shares shall vest after a period set by the Management Board
of no less than two years. The Management Board shall also set
up a lock-up period, also of no less than two years. However, if
the vesting period is four years, no lock-up period is required,
excluding exceptions tied to tax or social charge obligations;
• all the shares granted to members of the Management Board, in
the framework of the Group’s annual long-term incentive plans,
will be subject to performance criteria. and 50% of the shares
granted to other benefi ciaries in this framework will be subject to
performance criteria.
For 80% of the options subject to conditions, this will involve target
operating margin (EBITA), including, on a constant basis in the target
range, a margin of 13% to 16% of the Group through a normal
business cycle. The Management Board, which intends to locate
itself dynamically in this range, will set the goal after approval of the
Supervisory Board.
For 20% of options subject to conditions, this will involve criteria
based on one of the Group’s major transformation goals for the
business program. As a result, it was used for the most recent
long-term incentive plans, conditions based on the share of Group
revenues in emerging economies, or a positive growth differential
between organic Group growth and worldwide GDP (see above).
We remind you, moreover, that the members of the Executive Board
are bound by obligations to retain their shares as a result of the
exercise of their options, which are presented on pages 124 and
following.
In accordance with the provisions of the French Commercial Code,
it is the responsibility of the Management Board to determine the
identity of benefi ciaries of the allocations, as well as the conditions
and, where appropriate, the criteria for allocation of shares.
Authorisation is granted for a period of 38 months.
Since the shares that may be so allocated may be shares to
be issued, the authorisation by nature involves the waiver by
shareholders of their pre-emptive right to shares to be issued
allocated for free.
Authorisation to issue shares to employees
- twenty-second and twentythrid
resolutions -
The Annual and Extraordinary Meetings of April 23, 2009 and
April 22, 2010 authorised the Management Board to issue shares to
employees who are members of an employee stock purchase plan.
In addition, the Meetings authorised the Management Board to issue
shares to employees of non-French companies or to entities set up
to purchase shares of the Company under programs to promote
employee stock ownership in certain foreign countries whose local
legislation is not wholly compatible with the rules governing the
Company’s existing plans.
In accordance with these authorisations:
• the Management Board decided on June 2, 2010 to issue
shares to employees who are members of the Employee
Stock Purchase Plan or to entities set up to purchase shares
on employees’ behalf. The 2010 worldwide employee stock
purchase program offered a choice between a non-leveraged
plan and a leveraged plan (x 10), both of which offered shares
at a discount of 15% or 17% depending on the country, with an
investment ceiling of EUR 3,000 per employee. The plan was a
resounding success. Almost 18,000 employees in the seventeen
countries involved subscribed 0.8% of the capital at a price of
EUR67.44 or EUR65.86 per share;
• at its meeting on December 15, 2010, the Supervisory Board
authorised the Management Board to issue shares to members
of the Employee Stock Purchase Plan or to entities set up to
purchase shares on employees’ behalf during 2011, within a
limit of 3 million shares (almost 1.1% of the Company’s issued
capital). This program, which will include a non-leveraged and a
leveraged plan (x10) with a discount of 15% (in France) or 20%
(in other countries), will be offered in 14 countries representing
83,000 employees.
Under the “NRE” Act, if a company asks shareholders for an
authorisation to issue shares, a separate resolution must be tabled
at the meeting covering the issuance of shares to employees who are
members of an employee stock purchase plan. Since the fi fteenth to
twentieth resolutions concern authorisations to increase the capital
with or without pre-emptive subscription rights, we are therefore
asking for the early renewal of the authorisation given in 2010.
The Management Board would have full powers to carry out
employee share issues up to the equivalent of 2% of the Company’s
capital. Under the new authorisation, the maximum discount at which
the shares could be offered is set at 20%.
This authorisation, which will cancel and replace the unused portion
(as of midnight on July 31, 2011) of the existing authorisation given
in the eighteenth resolution of the Shareholders’ Meeting of April 22,
2010, effective August 1, 2011. This authorisation is valid for a period
of 26 months.
In addition, as the authorisation to issue shares to entities set up
to purchase shares of the Company on behalf of employees of
non-French Group companies will expire in 2010, we ask you to
renew it under the following conditions. The shares issued under
the authorisation will not exceed 1% of the capital. They will be
deducted from the ceiling of 2% of the capital set for the issuance
of shares to employees who are members of the Employee Stock
Purchase Plan. At the discretion of the Management Board, the
issue price will be equal to either (i) the opening or closing price of
the Company’s shares quoted on the trading day the decision of
the Management Board setting the issue price is made, or (ii) the
average of the opening or closing prices quoted for the Company’s
shares over the twenty trading days preceding the decision of the
Management Board setting the issue price under this resolution
or under the twenty-second resolution. The Management Board
may apply a maximum discount of 20% to the reference price. The
discount will be determined by the Management Board taking into
consideration any specifi c foreign legal, regulatory or tax provisions
that may apply to any benefi ciary governed by foreign law.
This authorisation will, as of August 1, 2011, cancel and replace the
existing authorisation voted on by the Extraordinary Shareholders’
Meeting of April 22, 2010 in its nineteenth resolution for the unused
portion at July 31, 2011 inclusive (until midnight). This authorisation
will take effect on August 1, 2011 and is being sought for a period
of 18 months.
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 267
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