sain t-gobain annu al report 2008 annual report

- The amounts specified in these four authorizations are not
cumulative.
- Authorization to issue up to €74 million worth of shares
(excluding premiums) to the Group Savings Plan. The shares
may not be offered at a discount of more than 20%
on the average of the prices quoted for the company’s shares
over the twenty trading days preceding the Board’s decision.
• Authorizations valid until August 2010:
- Authorization to grant stock options to employees
and officers, exercisable at a price at least equal to the average
of the prices quoted for the company’s shares over the twenty
trading days preceding the Board’s decision. The options may
not be exercisable for shares representing more than 3%
of the capital.
- Authorization to make stock grants representing
the equivalent of up to 1% of the capital.
- The 3% ceiling on stock options and the 1% ceiling on stock
grants are not cumulative.
During 2008, the following three authorizations were used:
• Share buybacks and sales: 115,490 shares were sold
upon exercise of stock options granted in prior periods.
• Group Savings Plan: 8,272,947 shares were issued
under the plan.
• Stock options: 3,551,900 options were granted.
Lastly, as explained above, on February 19, 2009, the Board
used the authorization to issue shares with pre-emptive
subscription rights.
Information that could have
a bearing on a takeover bid
- French legislation adopted in application of the European
takeover directive stipulates that the annual report must
include any information that could have a bearing on a
takeover bid. In the case of Saint-Gobain, the disclosures
required under this legislation at December 31, 2008 are
as follows:
• As explained above, the Board of Directors has been
authorized by shareholders to issue stock warrants
exercisable for up to €375 million worth of shares
(excluding premiums) while a takeover bid for the
company is in progress. The current authorization
expires in December 2009.
• In the case of a change of control of Compagnie
de Saint-Gobain.
- The U.S. subsidiaries’ deferred compensation and defined
benefit pension plans would be terminated immediately
and the rights of beneficiaries would become due within
twelve months. The total potential cost was USD 141.6 million
at December 31, 2008.
- The bonds issued by the company since 2006 could become
redeemable and accrued interest on the bonds could become
immediately due under certain conditions.
The issues concerned by these acceleration clauses
are the two tranches of the May 2006 €1,800 million issue,
the two tranches of the November 2006 £600 million issue,
the November 2006 CZK 1,000 million issue, the two tranches
of the April 2007 €2,500 million issue, the September 2008
€750 million issue, and the January 2009 €1,000 million issue.
The Maxit acquisition financing (€2,125 million syndicated
line of credit obtained in October 2007, reduced
to €2,040 million in October 2008 with the final maturity
rolled over to October 2010), the BPB acquisition financing
(syndicated line of credit obtained in August 2005, undrawn
balance of €500 million at December 31, 2008),
the €2,000 million syndicated line of credit for general
corporate purposes obtained in November 2004, a bank
loan and three bilateral lines of credit all also include change
of control clauses.
Group Savings Plan
The Group Savings Plan (Plan d’Épargne Groupe – “PEG”)
is a key feature of the social contract within the Group.
It represents an excellent means of giving employees a stake
in the Group’s success and profits.
In 2008, 4,073,045 shares were issued under a standard plan
with a five or ten-year lock-up, for a total of €169 million
(2007: 3,539,025 shares and €205.4 million),
and 4,199,902 shares under a leveraged plan for €185 million
(2007: 1,442,584 shares for €89 million).
In France, 81% of employees invested in the PEG through
corporate mutual funds (Fonds Communs de Placement
d’Entreprise – “FCPE”). With employees in twenty-three
other European countries and seven countries outside
Europe also given the opportunity to take part, in all,
over 58,000 Group employees invested in the PEG in 2008.
At December 31, 2008, the corporate mutual funds held 7.8%
of the company’s capital and 11.9% of the voting rights.
A new non-leveraged plan has been launched since
the beginning of 2009, giving employees the opportunity
to acquire up to 8.5 million shares with a five
or ten-year lock-up.
Stock option plans – principles and rules decided
by the Board of Directors
Stock option plans have been set up by the Board of Directors
every year since 1987. The option exercise period was set
at five years for plans up to 1991, then eight years
for the 1992-1998 plans and ten years for subsequent plans,
meaning that all the plans up to 1998 are now finished.
MANAGEMENT REPORT
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Saint-Gobain - 2008 Annual Report