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pensions. The amount of this pension is capped to 25% of the
reference salary considering, if applicable, the amount paid for
the defi ned contribution plan(s) (article 83). This plan does not
conform to the recommendations of the AFEP/MEDEF corporate
governance guidelines which anticipate that the basic rights are
acquired without length of service conditions in the Group. In order
to conform to these recommendations, the reform anticipates:
• closure of the current article 39 plan to all new entrants;
• implementation of a new article 39 plan open to Executive
Committee and Board members with progressive vesting of
rights according to time of service in the Group and on the
Executive Committee. Full rights are granted after 15 years
of service for a new entrant to the plan, except for the Group
service condition. The new plan is contingent upon completing
a career in the Company with the same fl exibility introduced by
Social Security in 2004. Therefore, conditional assurance of an
income is maintained in case of dismissal, producing the same
effects as employee redundancy, after 55 years of age without
restarting work or for 2nd or 3rd category disability as defi ned by
Social Security without restarting work.
For the rest, the new plan includes the provisions of the current
plan, notably:
– limiting the top-hat pension to 25% of the reference salary
considering the pension paid for the article 83 plans
implemented by the Group (unchanged from current plan);
– the right to a widow/widower’s pension for the surviving
partner;
– a spouse’s pension if a senior executive dies before retirement
age, although limited to rights acquired by the date of death;
– pension supplement paid to a senior executive from the
retirement date after disability occurring during work activities.
• the progressive replacement of the conditional rights of the new
plan for those of the current plan. In effect, the conditional rights of
the two plans are not added together but are gradually replaced.
As a result, the current plan, which has been continued because
of a wider scope of benefi ciaries, will disappear in the future.
• outsourcing of the new article 39 plan. This outsourcing is
mandatory. To this end, a contract was signed with the company
AXA France Vie following an invitation to tender issued by an
independent fi rm. This contract only involves outsourcing of the
new plan that will come into force on July 1, 2012, the outsourcing
of the old article 39 plan still being under review.
Renewal of Mr Jean-Pascal Tricoire’s status
(5th resolution)
In conformity with the AFEP/MEDEF recommendations of
October 6, 2008, Mr Tricoire agreed to resign from his employment
contract at the time of renewing his appointment as Chairman of
Management Board in May 2009. Also, in agreement with Mr Jean-
Pascal Tricoire, the Supervisory Board of February 18, 2009 defi ned
a status that was approved by the Annual Shareholers’ Meeting of
April 23, 2009. This status stipulates that Mr Tricoire:
1°) will continue to benefi t from:
– the Schneider Electric SA and Schneider Electric Industries SAS
employee benefi t plan, which offers health, incapacity, disability
and death cover,
– the supplementary health, incapacity, disability and death
cover available to the Group’s French senior executives,
ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
MANAGEMENT BOARD REPORT
– the top-hat pension plan for the Schneider Group’s French
senior executives above described;
2°) receives compensation in the event of termination capped at
two years of his target remuneration (fi xed salary and target
bonus, maximum described below) taking into account
compensation provided for in the non-compete agreement
described below and subject to performance criteria;
3°) is bound by his non-compete agreement should he leave the
Company, unless a mutually agreeable arrangement is found;
the agreement lasts for one year and is remunerated (60% of
target remuneration: fi xed and bonus);
4°) retains forthwith, subject to performance criteria, the benefi t
of his stock options, stock grants and performance shares
granted to him or that will be granted to him, should he leave
the Company.
The appointment to the Management Board comes to an end on
May 2, 2012; the Supervisory Board of February 21, 2012 has
decided to renew the roles of Board members for three years and
therefore, to renew Mr Tricoire’s status under the two adjustment
conditions presented hereafter. It is therefore stipulated that
Mr Tricoire:
1°) benefi ts from:
– the Schneider Electric SA and Schneider Electric Industries SAS
employee benefi t plan, which offers health, incapacity, disability
and death cover,
– the supplementary cover available to the Group’s French
senior executives for health, incapacity, disability and death.
The contingency and supplementary cover compensation are
now subject to performance criteria. The right to compensation
is subject to one of the two following criteria being present:
the average net profi t for the last fi ve fi nancial years is positive
or the average free cash fl ow amount for the last fi ve years
is positive;
2°) benefi ts from a compensation due in the event of dismissal
capped taking into account the compensation provided for in
the non-compete agreement described below, not twice the
last target remuneration (fi xed salary and target bonus), but
twice the average actual annual remuneration (fi xed salary and
variable) for the last three years (hereafter “Maximum Amount”).
The amount due will be subject to performance criteria;
Compensation will be due in the event that:
(i) Mr Tricoire resigns, is dismissed or is not reappointed as
a member or Chairman of the Management Board in the
12 months following a material change in Schneider Electric’s
shareholder structure that could change the membership of the
Supervisory Board;
(ii) Mr Tricoire resigns, is dismissed or is not reappointed as a
member or Chairman of the Management Board following a
reorientation of the strategy pursued and promoted by him
until that time, whether or not in connection with a change in
Schneider Electric’s shareholder structure as described above;
(iii) Mr Tricoire is asked to resign, is dismissed or is not reappointed
as a member or as Chairman of the Management Board when
the mathematical average of the rate of achievement of Group
objectives used to calculate his bonus was 50% or higher in the
four completed fi nancial years preceding his departure.
Compensation will depend on the mathematical average of the
rate of achievement of Group performance objectives used to
determine Mr Tricoire’s bonus for the three completed fi nancial
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