2017 PERFORMANCE SHARE AND STOCK OPTION PLANS

Transcription

1 INFORMATION 2017 PERFORMANCE SHARE AND STOCK OPTION PLANS The Bard f Directrs f L Air Liquide at its meeting n September 20, 2017 adpted the 2017 perfrmance share and stck ptin plans which are aimed, abve and beynd incentive and mandatry prfit sharing, at assciating emplyees t a greater extent with the cmpany s perfrmance. Principles f the 2017 grant The Bard decided t cntinue the plicy initiated in 2015 aimed at giving preference t perfrmance shares rather than stck ptins in the vlumes granted. Thus, fr emplyees wh up until nw had received a mixed grant, the weight f perfrmance shares has increased cnsiderably as cmpared t that f ptins and, fr many f them, perfrmance shares have cmpletely replaced stck ptins. Fr the Executive Officer, the 2017 grant falls within the scpe f the new remuneratin plicy and the sught psitining determined by the Bard f Directrs n February 14, 2017 and apprved by the sharehlders at the Sharehlders Meeting f May 3, It takes int accunt the Grup s new size fllwing the acquisitin f Airgas. It is part f the bjective f ttal annual remuneratin set fr 2017 by the Bard f Directrs subject t gd perfrmance and gd integratin f Airgas, the weight f the variable elements t represent apprximately 75% f ttal and in the balance between fixed part, variable part and LTI, a slightly greater weight (40% f the ttal) t be given t the lng-term mtivatin. In this cntext, it was agreed that the award f perfrmance shares and stck ptins t Benît Ptier in 2017 wuld represent an IFRS value f apprximately 2,100k, an increase f 10.83% as cmpared t On the basis f these principles, the Bard f Directrs made the fllwing grants at its meeting n September 20, 2017: 2017 Stck Optin Plan The Bard granted ptins t subscribe fr shares in the Cmpany in accrdance with the fllwing terms: Exercise price The exercise price is 104 (crrespnding t the average f the pening trading prices fr the Air Liquide share during the twenty trading sessins prir t the date f the Bard f Directrs meeting, runded dwn t the nearest eur). Vlume f grants Executive fficer Vlume IFRS value (1) % f share capital Benît Ptier 23,100 ptins 424, % (1) as f September 20, 2017 Other beneficiaries The Bard f Directrs als decided t grant 50,440 ptins t 203 emplyee beneficiaries. 1

2 In ttal, it granted 73,540 ptins t subscribe fr shares, representing 0.019% f the share capital in terms f the number f shares, t 204 beneficiaries, representing 0.30% f the wrkfrce Plan Regulatins Subject t the perfrmance cnditins that apply t bth the perfrmance share and stck ptin plans (defined belw), the prvisins f the 2017 Plan Regulatins are unchanged as cmpared t thse f the 2016 Plan (term: 10 years; lck-up perid f 4 years; definitin f a cnditin f cntinued emplyment/presence in the Grup at the time f exercise f the ptins) Perfrmance Share Plans The Bard awarded perfrmance shares in accrdance with the fllwing terms: Vlume f awards Executive fficer Vlume IFRS Value (2) % f share capital Benît Ptier 17,980 perfrmance shares 1,675, % (2) as f September 20, 2017 Other beneficiaries The Bard f Directrs als decided t award 398,599 perfrmance shares t 1,831 emplyee beneficiaries. In ttal, it therefre awarded 416,579 perfrmance shares representing 0.11% f the share capital t 1,832 beneficiaries, representing 2.73% f the wrkfrce Plan Regulatins Subject t the perfrmance cnditins that apply t bth the perfrmance share and stck ptin plans (defined belw), the prvisins f the 2017 France and Wrld Perfrmance Share Plan Regulatins are identical t thse f the 2016 Plans and in particular: a. Fr France, the vesting perid is set at 3 years and the hlding perid at 2 years. As fr the Wrld Plan, it prvides fr a vesting perid f 4 years with n additinal hlding bligatin. b. Definitin f a cnditin f cntinued emplyment/presence at the end f the vesting perid in rder t receive the definitive award f shares. Cmbined On a cmbined basis, all 2017 Perfrmance Share and Stck Optin Plans cmbined, the grants decided by the Bard n September 20, 2017 are as fllws: 2

3 Executive Officer Benît Ptier (1) (2) as f September 20, 2017 Vlume IFRS Value (1) (2) % f share capital 23,100 stck ptins 17,980 perfrmance shares 424,809 1,675, % % Ttal 2,099,826 N/A All the beneficiaries 2017 Ttal number f perfrmance shares/perfrmance share equivalents % share capital 0,11% Number f beneficiaries 1,832 % f wrkfrce 2.73% The lists f emplyee beneficiaries were prepared with the aim f ensuring a certain rtatin and an enlargement f the ppulatin f beneficiaries. 29.2% f the beneficiaries f the September 20, 2017 Plans are emplyees t whm n stck ptins/perfrmance shares were granted ver the last 5 years. Perfrmance cnditins applicable t the 2017 Stck Optin and Perfrmance Share Plans All the stck ptins and perfrmance shares granted t any beneficiary within the scpe f the September 20, 2017 Plans are subject t the fllwing perfrmance cnditins that apply t bth the Stck Optin and Perfrmance Share Plans. These cnditins were adpted by the Bard f Directrs n February 14, The number f stck ptins that may be exercised ut f the ttal number f stck ptins granted and the number f perfrmance shares definitively awarded within the scpe f the 2017 Plans will therefre depend: (i) Fr 65% f the stck ptins/perfrmance shares granted, n the rate f achievement f an bjective, set by the Bard, cnsisting f the average f the annual rates f grwth in Grup undiluted net earnings per share excluding freign exchange impact and excluding exceptinal items ( Recurring EPS ) fr financial years 2017, 2018 and At the bjective set, the grant is 100% then decreases n a straight-line basis t zer if there is n grwth in EPS. In rder t take int accunt the Airgas acquisitin in May 2016 and its financing, the fllwing principle was adpted: f calculating the increase in Recurring EPS fr 2017, n the basis f the estimated financial statements fr 2016 including Airgas as f January 1 and excluding the businesses available fr sale and thus making it prbable t take int accunt cmparable data, f maintaining an exacting bjective with regard t the average f the annual rates f grwth ver this perid. This bjective has therefre been set, like fr the 2016 Plans, at a level f grwth within a range f +6% t +10% per annum. The precise bjective will be cmmunicated ex pst; 3

4 (ii) fr 35% f the stck ptins/perfrmance shares granted, fr 50% f the stck ptins/perfrmance shares referred t in sub-paragraph (ii): n an bjective f Ttal Sharehlder Return set by the Bard, defined as the average annual grwth rate f an investment in Air Liquide shares fr fiscal years 2017, 2018 and 2019 ( AL TSR ). The abslute TSR bjective is set n a cnsistent basis with histrical perfrmances. At the bjective set, the grant is 100% then decreases n a straight-line basis, t a lwer limit, fr 50% f the stck ptins/perfrmance shares referred t in sub-paragraph (ii): n the rate f Ttal Sharehlder Return frm an investment in Air Liquide shares, reinvested dividends surced frm Blmberg ( B TSR ), cmpared t the CAC 40 TSR Index, reinvested dividends (surced frm Blmberg) fr fiscal years 2017, 2018 and The rate f achievement will be 0% if the average f Air Liquide TSR is lwer than the average f the CAC 40 TSR, 50% if it is equal t the average f the CAC 40 TSR and 100% if it is mre than 2% higher than the average f CAC 40 TSR n the basis f a straight-line change. This bjective f 2%, which is slightly lwer than in 2016, can be accunted fr by the greater sensitivity f the perfrmance cnditins that are frm nw n based n a single TSR criterin (versus tw previusly: Peers TSR and CAC 40 TSR). Any grant fr a perfrmance lwer than the average f CAC 40 TSR is impssible. In sum, the applicable perfrmance cnditins are as fllws: Weighting 65% 35% Of which 50% Of which 50% Perfrmance cnditins Average f annual grwth rates in recurring Earnings per Share excluding freign exchange impact and exceptinal items fr the perid 2017/2018/2019 Ttal Sharehlder Return, defined as the average annual grwth rate f an investment in Air Liquide shares ver 3 financial years Ttal Sharehlder Return vs. CAC 40 TSR ver 3 financial years Objective Level f grwth set within a range f +6% t + 10% per annum (the precise level will be cmmunicated ex pst) Ttal Sharehlder Return set n a cnsistent basis with histrical perfrmances (the bjective will be cmmunicated ex pst) - 0% if the Air Liquide rate f return is lwer than the average f CAC 40 TSR - 50% if the Air Liquide rate f return is equal t the average f CAC 40 TSR - 100% if the Air Liquide rate f return is mre than 3% higher than the average f CAC 40 TSR (change n a straight-line basis) Achievement f perfrmance cnditins This infrmatin will be published in

5 The rate f achievement f the perfrmance cnditins will be recrded by the Bard at the time f adptin f the financial statements fr the 2019 fiscal year. The result achieved and the percentage f perfrmance shares that vest/ptins that are exercisable will als be cmmunicated. Specificities relating t the executive fficers Within the scpe f the sub-limits authrized by the Annual Sharehlders Meeting fr 38 mnths, and mst recently by the Cmbined Sharehlders Meeting f May 12, 2016 (18 th and 19 th reslutins), the Bard f Directrs sets lwer annual limits fr grants t the executive fficers, expressed (i) as a percentage f the capital and (ii) as a multiple f their remuneratin, in accrdance with the recmmendatins f the AFEP/MEDEF Cde. Taking int accunt the reductin in the number f executive fficers, the Bard f Directrs decides t adpt the fllwing limits: Limits n the grant fr the executive fficer (i) the ttal number f perfrmance shares granted in 2017 t the sle executive fficer may nt grant entitlement t a number f shares exceeding 0.012% (instead f 0.017% previusly) (it being understd that a sublimit n grants f 0.15% f the capital fr 38 mnths was set by the Annual Sharehlders Meeting n May 12, 2016). (ii) the ttal number f stck ptins granted in 2017 t the sle executive fficer may nt grant entitlement t a number f shares exceeding 0.035% f the capital (instead f 0.05% previusly) (it being specified that a sublimit n grants f 0.3% f the capital fr 38 mnths was set by the Annual Sharehlders Meeting n May 12, 2016). (iii) The maximum cumulative IFRS value f the stck ptins and perfrmance shares granted t the executive fficer may nt exceed (fr all the 2017 S0 and PS Plans cmbined) apprximately 1.5 times the amunt f his maximum grss annual remuneratin. Other specific rules The specific rules defined at the time f the grant under the 2016 Plans were restated by the Bard n September 20, They are applicable t the 2017 grants t the executive fficer as fllws: Obligatins regarding the restrictin n the exercise f stck ptins and the sale f perfrmance shares during the blackut perids prir t the publicatin f the financial statements as defined by the Cmpany. Cmmitment nt t carry ut hedging transactins with regard t the risk cncerning stck ptins/shares resulting frm the exercise f stck ptins and cncerning the perfrmance shares awarded, thrughut the length f their term f ffice. Share wnership bligatins: 5

6 bligatin t retain, in registered frm, until the terminatin f their duties, a minimum quantity f shares crrespnding t 50% f the capital gain n acquisitin net f scial charges and taxes fr each exercise f stck ptins/final award f perfrmance shares. This percentage will be adjusted dwnwards t 5% as sn as the quantity f shares held represents an amunt equal t at least 3 times the executive fficer s fixed grss annual remuneratin. pursuant t the internal rule defined by the Bard f Directrs since 2008, bligatin fr the Chairman and Chief Executive Officer t hld, in a registered accunt, a number f shares equivalent t twice the fixed grss annual remuneratin. This bligatin will remain in frce until it is exceeded by the effect f the abve-mentined rules resulting frm the French Cmmercial Cde. These bligatins are in line with the recmmendatins f the AFEP/MEDEF Cde f Nvember 24,