A LASTING COMMITMENT MOVING FORWARD TOGETHER

Transcription

1 Employee & shareholder, A LASTING COMMITMENT MOVING FORWARD TOGETHER

2 CONTENTS WHY BECOME A SHAREHOLDER IN THE MICHELIN GROUP? 4/5 6/7 EMPLOYEE SHAREHOLDING IN THE MICHELIN GROUP HOW THE PLAN WORKS 8/9 10/11 TAXATION DIVIDENDS / HOW TO SUBSCRIBE 12/13

3 MESSAGE FROM THE CHIEF EXECUTIVE OFFICER Dear Sir or Madam, The members of the Group Executive Committee (CEG) and I would like to give you the opportunity to subscribe to BIB Action 2013, the Michelin Group s fourth employee shareholder plan. Investing in Michelin shares is a vote of confidence in the durability and strength of our Group. Employee shareholders share the ambition of making Michelin the innovative, high-performance, responsible leader in sustainable mobility. Also, becoming an employee shareholder shows confidence in our many strengths: technological advance, quality of products and services, brand attractiveness, dynamic growth, operational efficiency and financial strength. Finally, it is a way of renewing our mutual commitment, because offering you a subscription on preferential terms demonstrates our gratitude and is a way of involving you even more closely in the development of our Group. We hope that you will join the 64,200 employees that are already Michelin shareholders. JEAN-DOMINIQUE SENARD CHIEF EXECUTIVE OFFICER 2/3

4 WHY BECOME A SHAREHOLDER IN THE MICHELIN GROUP? A GLOBAL PLAYER: 184 million tyres produced at 69 sites worldwide. Sales operations in 170 countries. A varied range of products and services, including tyres, distribution and services, assistance, maintenance and fleet management, Michelin maps and guides, ViaMichelin mobility aid services and Michelin Lifestyle products. 3 integrated distribution networks: Euromaster (Europe), TCi (North America) and TYREPLUS (Asia and Africa). 3,400 service and distribution centers in 29 countries. 10 million Michelin maps and guides published worldwide and 950 million routes calculated by ViaMichelin. A complete portfolio of brands (MICHELIN, BF Goodrich, KLEBER, Kormoran, UNIROYAL, RIKEN, TAURUS, TIGAR). A TECHNOLOGICAL LEADER IN SUSTAINABLE MOBILITY Since 1889, the Michelin Group has been innovating to facilitate the mobility of both people and goods. It is now a benchmark player in the tyre and mobility-related service market. Michelin is pursuing a worldwide, sustainable and profitable growth strategy that is based on innovation and performance, by fulfilling its responsibilities and respecting its values. AN INNOVATIVE GROUP From the very beginning, research and development have driven growth at Michelin. Today, more than ever, innovation is the driving force of the Group. The work performed on the materials, conception, design, and industrialization of tyres are key to being able to meet customer expectations and maintain an edge on its competitors. MICHELIN Total Performance The Michelin product strategy simultaneously delivers highlevel performance for different parameters in a single tyre, thanks to innovation and use of cutting-edge technology, thereby combining safety, fuel savings, strength, longevity, comfort and many other features. This is what we call MICHELIN Total Performance. In each market segment, Michelin meets the full range of customer expectations, innovating on a daily basis to provide safer, more environmentally friendly and efficient tyres for more comfortable travel. The research and development work carried out enables performances to be combined that are normally, by their very nature, conflicting. KEY INNOVATION FIGURES 6,000 people are employed in the Research & Development sector 622 million euros are invested each year in Research & Development Worldwide R&D at 25 sites on three continents 1 global Technology Center located on three continents (North America, Asia and Europe) 1 complete aroundthe-world tour approximately every 12 minutes in road longevity and endurance tests

5 EMPLOYEE & SHAREHOLDER, A LASTING COMMITMENT Net sales increase (in millions of euros) Net sales per zone in 2012 Percentage change in net debt-to-equity ratio 16,408 14,807 17,891 20,719 21,474 34% Western Europe North America 34% 84% 55% 20% 22% 12% 31/12/08 31/12/09 31/12/10 31/12/11 31/12/12 32% Other zones 31/12/08 31/12/09 31/12/10 31/12/11 31/12/12 Source: Individual shareholder guide A HIGH-PERFORMING GROUP A dominant position in key markets The Group is a global player, number one in all speciality markets, with a 14.8% value-based worldwide market share: No.1 worldwide for high-performance car tyres and radial tyres for trucks, civil engineering machinery and aircraft. No.1 in Europe for motorcycle and agricultural machinery tyres. Within a highly unstable economic context, Michelin s net sales have been steadily increasing since 2009 and are evenly distributed between the various Geographic Zones. Strong growth potential Over the coming years, the Michelin Group aims to grow by an average of 5% per year. Between 2012 and 2015 the Group is targeting to make 2 billion euros of investment per year to boost production capacity in growth markets, while adapting industrial sites to product developments and strengthening their competitiveness in mature countries. Financial strength Financial performance is essential to ensure the independence and long-term future of the Group. Operating income stood at 2.4 billion euros in 2012, an increase of more than 24% on the previous year. The power of the MICHELIN brand name, together with the price policy pursued and an improvement in the product mix, played a significant role in this result. Since 2008, the Group s debt, expressed as a debt-to-equity ratio, has also undergone a very positive change, regularly reducing to reach 12% in A RESPONSIBLE GROUP Climate change, pollution, city congestion and depletion of natural resources are immense challenges to mobility. Michelin works on a daily basis to make travel safer, more efficient, more comfortable and more environmentally friendly. This commitment to sustainable mobility, combined with an ongoing determination to respect the communities surrounding the sites and protect everyone s work conditions, is expressed in the Group s sustainable development policy: Michelin Performance and Responsibility (PRM).This approach was first launched more than 10 years ago and ambitions for 2020 have been deployed to further increase its ability to meet the requirements of the Company. Moving forward together More than 113,000 people of 120 different nationalities work within the Group. Their development, personal fulfillment and commitment are at the centre of Michelin s concerns and at the core of the Company s performance. Working within the Michelin Group involves a mutual commitment between each employee and the Company so that we can move forward with confidence, seeking performance. It is in this spirit of confidence and commitment that the Michelin Group is now inviting its employees to subscribe to an employee shareholder plan on preferential terms. Under this plan, all employees have an opportunity to decide to be more closely linked to the economic performance and development of the Group, both today and in the future. 4/5

6 EMPLOYEE SHAREHOLDING IN THE MICHELIN GROUP Since 2002, under the worldwide employee shareholder plan, the Michelin Group has offered its employees an opportunity to purchase shares on preferential terms and join the 202,000 Group shareholders. THE RIGHTS AND RESPONSIBILITIES OF SHAREHOLDERS As co-owners of the Company in which they hold shares, shareholders have rights: The right to information: they are regularly kept updated as to the economic and financial results of the Group. The right to vote in shareholder meetings: this right is proportional to the number of shares held. All holders of Michelin shares benefit from this voting right. The right to receive a dividend: if the financial situation so allows, shareholders may receive a proportion of the profits made by the Company, pro-rated to the number of shares held, known as a dividend. Each year at the Shareholders Meeting, and at the proposal of the Company s Chief Executive Officer, shareholders decide the proportion of the profits that may be distributed to them and the proportion to be reinvested to ensure the Group s development. PAYMENT OF DIVIDENDS Each year, shareholders may receive a dividend for each share held. Recent Group policy has been to gradually increase the per-share dividend with an aim to raising and then maintaining the distribution rate at around 30%, excluding exceptional items. Dividend history (in euros) Payment in 2013 of the dividend for FY Important: Past performance is not indicative of future performance. Source: Michelin.

7 EMPLOYEE & SHAREHOLDER, A LASTING COMMITMENT MICHELIN SHARES Market capitalization of 12,374 billion euros on 31/05/2013 The shares are listed on the Paris stock exchange (NYSE Euronext Paris). They are included in the CAC 40 index, the leading French stock market index, comprised of 40 stocks chosen from among the 100 top market capitalizations according to specific criteria and listed on the regulated markets of Euronext Paris. Composition of shareholding on 31/12/ % 11.2% 26.2% 61% Source: Individual shareholder guide Employees - company saving plan Individual shareholders French institutional Non-resident institutional Share performance since 2008 After a decline in 2008, the share price has generally been rising since 2009 in an economic and financial context marked by uncertainty and the financial crisis. Between 2009 and May 2013, the share price has outperformed its benchmark index, the CAC 40, with a share performance higher than the average. 6/ g67.78 g Michelin CAC Source: NYSE Euronext

8 HOW THE PLAN WORKS? Contributions will be taken directly from your pay through the Company s payroll system. You may choose to make contributions within the following limits, provided that your overall investment over the course of the four month accumulation period does not exceed 10% of your annual gross pay The minimum amount that you can invest is 10 per month. The maximum amount that you can invest is 375 per month. The amount you choose to invest must be a whole number of pounds. Annual gross pay is defined as any amount you receive via the Company s payroll which is subject to deduction of income tax and National Insurance Contributions (NIC) in the tax year. ACCUMULATION PERIOD Your contributions will be deducted through payroll and paid into the Trustee s bank account. The accumulation period will start on 1 December 2013 and will finish on 31 March PARTNERSHIP SHARES Within 30 days following the end of the accumulation period, the Trustee will use the accumulated monies to buy Partnership Shares for you. Partnership Shares will be shares in CGEM, the Group s parent company. On the same day as the Partnership Shares are acquired, Michelin will award the free Matching Shares. The Trustee will hold these shares on your behalf. The number of Partnership Shares which may be acquired will depend on the amount of your monthly contributions and the price at which you will acquire the Partnership Shares, taking into account the exchange rate between the Euro and Sterling on the date of acquisition. FREE MATCHING SHARES The number of free Matching Shares, which you may receive, is as follows: SHARE MATCH INFORMATION Number of Partnership Shares Purchased Number of Matching Shares Awarded Total number of shares The maximum number of Matching Shares which you may be awarded under the Plan is nine.

9 EMPLOYEE & SHAREHOLDER, A LASTING COMMITMENT CAN I STOP OR ALTER MY MONTHLY CONTRIBUTIONS? You may stop making your monthly contributions at any time during the accumulation period. However, if you decide to stop making contributions, you should be aware that you can only restart deductions once in the accumulation period. However, as the accumulation period is only four months long, it is unlikely that, due to the time needed to administer stop and restart requests, employees who stop making contributions will be able to restart. You will need to notify the Company s payroll department of your decision to stop contributions by completing a Contribution Stop Form, which may be obtained from the Plan Administrator (see back page for the contact details). It will not be possible to alter the amount of your contributions once you have sent in the Partnership Share Agreement and the accumulation period has started. If you miss any contributions during the accumulation period, either due to stopping or because you do not have sufficient pay in any particular month to meet the required payment, you cannot subsequently make those contributions up. HOW MUCH WILL I PAY FOR MY PARTNERSHIP SHARES? The price at which you will acquire your Partnership Shares will be the lower of the market price at the start of the four month accumulation period and the market price on the day the shares are purchased. For information only, the closing price per CGEM share on 27 September 2013 was (or 69.28) per share. This is the price on which all examples in this booklet are based. WHAT HAPPENS TO ANY CASH LEFT IN THE TRUST FUND? As only whole shares may be acquired with your contributions, it is possible that there may be a small cash amount left over after the Trustee has bought your Partnership Shares (less than the value of one share). Any cash balance remaining from your contributions will be returned to you via the payroll, less any income tax and NIC due on this amount. SHAREHOLDER RIGHTS Although your shares will be held in a Trust, the Trustee will act on your behalf and in accordance with your instructions. You will therefore have similar rights to any other shareholder, including the right to receive the information which is distributed to shareholders (such as the annual report and accounts) and the right to instruct the Trustee how to vote on your behalf at shareholders meetings. You will also be entitled to receive any dividends declared by Michelin on your Partnership and Matching Shares. You may be offered the option of reinvesting the dividend in new shares or of receiving cash. DEALING IN YOUR SHARES, AND LEAVING EMPLOYMENT If you withdraw or sell your Partnership Shares within five years you may lose some or all of the income tax and NIC benefits. You are only able to sell your Matching Shares once they have been held by the Trustee for at least five years. If you cease employment, however, it is a requirement that your Partnership Shares and your Matching Shares must be taken out of the Plan. Michelin Tyre PLC will pay all costs associated with the management of the Plan. You will be responsible for the stock broker s charges associated with the sale or transfer of your shares, which will be automatically deducted from your sale proceeds. 8/9

10 TAXATION A BRIEF GUIDE The following notes are for guidance only, and apply to employees who are resident for tax purposes in the United Kingdom. Personal circumstances may affect your tax position and if you are in any doubt you should consult an independent financial adviser. You are advised to read all sections. ACQUISITION OF PARTNERSHIP AND AWARD OF (FREE) MATCHING SHARES When you acquire your Partnership and when your free Matching Shares are awarded, you will not be subject to any income tax or NIC on the amount of your contributions deducted from your gross pay to buy Partnership Shares or the value of the Matching Shares awarded. Set out below is an example of the income tax and NIC relief. TAX RELIEF EXAMPLE If you are a basic rate (20%) tax payer (NI 12%) Your gross monthly investment amount Income tax and NIC relief Effective net pay contribution If you are a higher rate (40%) tax payer (NI at 2%) Your gross monthly investment amount Income tax relief Effective net pay contribution SALE OR WITHDRAWAL OF YOUR PARTNERSHIP OR MATCHING SHARES LESS THAN THREE YEARS AFTER THEY WERE AWARDED If within three years of the award of your shares: you ask the Trustee to sell or to withdraw your Partnership Shares; or your Partnership and Matching Shares are withdrawn from the Trust or sold because you cease to be employed by a company within the Michelin Group, other than as a result of one of the special early leaver circumstances listed overleaf, you will be liable to income tax and NIC on an amount equal to the market value of your shares on the date they cease to be subject to the Plan. SALE OR WITHDRAWAL OF YOUR PARTNERSHIP OR MATCHING SHARES MORE THAN THREE, BUT LESS THAN FIVE YEARS AFTER THEY WERE AWARDED If you have held your Partnership and Matching Shares for more than three but less than five years and: you ask the Trustee to sell or withdraw your Partnership Shares; or your Partnership and Matching Shares are withdrawn from the Trust or sold because you cease to be employed by a company within the Michelin Group, other than as a result of one of the special early leaver circumstances listed overleaf, you will be liable to income tax and NIC on the LOWER of the market value of the shares on the date they were awarded and the market value of the shares on the date they ceased to be subject to the Plan.

11 EMPLOYEE & SHAREHOLDER, A LASTING COMMITMENT For example, if your shares were originally awarded at a market value of 53 per share and withdrawn four years later at a market value of 57 per share, you will be liable to income tax and NIC only on 53 per share. SALE OR WITHDRAWAL OF YOUR PARTNERSHIP OR MATCHING SHARES FIVE YEARS OR MORE AFTER THEY WERE AWARDED You will not be liable for any income tax or NIC in respect of the withdrawal or sale of your Partnership or Matching Shares if they have been held in the Trust for more than five years following the date they were awarded. SPECIAL EARLY LEAVER CIRCUMSTANCES In certain circumstances (referred to below) there will be no charge to income tax or NIC where you cease to be employed by a company within the Michelin Group. These circumstances are cessation of employment as a result of: injury or disability redundancy retirement transfer of your employment to a company not within the Michelin Group sale of the business or company for which you work out of the Michelin Group death The withdrawal of your shares from the Trust or their sale in the circumstances listed above will not give rise to a charge to income tax or NIC. COLLECTION OF INCOME TAX AND NIC If required, your employer will deduct any income tax due in respect of your Partnership or Matching Shares under the PAYE system, together with any NIC. This will happen as soon as practicable after your shares cease to be subject to the Plan. You will be required to meet this liability either by providing a cheque, or by directing the Trustee to sell a sufficient quantity of shares. Any remaining proceeds from the sale of your shares would then be given to you. CAPITAL GAINS TAX ( CGT ) The Trust acts as a shelter from CGT. If shares are held in Trust at the time you decide to sell them, there will be no CGT to pay on them. If you have left employment, the CGT calculation should be based on the value of shares when they cease to be subject to the Plan. Where you sell shares, having previously removed them from the Trust, you may be liable to pay CGT based on the difference between the sale proceeds and the market value of the shares when they were removed from the Trust. You should bear in mind that you may benefit from your personal annual CGT allowance. It is your responsibility to declare any capital gain to HM Revenue & Customs via a self-assessment tax return. 10/11

12 DIVIDENDS A treaty between France and the UK applies to the tax treatment of dividends, which means that if you meet the requirements for obtaining the benefits of the treaty, the dividends paid to you will be subject to withholding tax in France at the reduced Treaty rate of 15% (rather than at the French domestic rate of 30%), provided, however, that you file a Certificate of Residency for French Dividend Tax Relief (EN5000). As regards taxes in the United Kingdom, the gross amount of the dividends which you receive in respect of your shares will be subject to UK income tax at your marginal rate of dividend income tax. A tax credit for the 15% French tax withheld at source on the dividend will be available. In addition, a UK tax credit equal to 1/9th of the gross dividend is available. The gross dividend (i.e. before the French withholding tax) which is declared in respect of your shares is multiplied by 10/9 to work out the UK "notional dividend". This notional dividend is then subject to UK income tax at your marginal rate of dividend income tax (37.5% for additional rate tax payers, 32.5% for higher rate tax payers and 10% for basic rate tax payers), with a tax credit for the 15% French withholding tax and a credit for the 1/9th UK credit. The tax credits mean that basic rate taxpayers will not have any UK income tax to pay on dividends. Dividend income is reported under self-assessment and you will be required to request a self-assessment form from your local tax office if you would not otherwise receive one. The dividend income and the tax credit for the French tax withheld are both inserted on the foreign supplementary pages of the tax return. There are no National Insurance Contributions payable on dividends. PARTNERSHIP SHARES MATCHING SHARES Award or acquisition of shares No tax or NIC Income used to purchase shares not subject to tax or NIC No tax or NIC Less than 3 years after award or acquisition Tax and NIC due on the market value of the shares when they cease to be subject to the Plan Tax and NIC on the market value of the shares when they cease to be subject to the Plan (can only be withdrawn on ceasing employment) TAXATION EVENT(S) Removal of shares from the Plan 3 years or more but less than 5 years after award or acquisition Tax and NIC on the lesser of the amount of pre-tax pay used to acquire the shares and the market value of the shares when they cease to be subject to the Plan Tax and NIC on the lesser of the market value of the shares on the date they were awarded and the date they cease to be subject to the Plan (can only be withdrawn on ceasing employment) 5 years or more after award or acquisition Cessation of employment in special circumstances at any time Sale of shares by employee No tax or NIC No tax or NIC CGT may be due on the sale price less the market value of the shares when they ceased to be subject to the Plan. No CGT if sold directly from the Plan No tax or NIC No tax or NIC CGT may be due on the sale price less the market value of the shares when they ceased to be subject to the Plan. No CGT if sold directly from the Plan

13 EMPLOYEE & SHAREHOLDER, A LASTING COMMITMENT WHEN AND HOW DO I JOIN THE PLAN? JOINING THE PLAN IF I AM ELIGIBLE HOW DO I JOIN THE PLAN? You may join the Plan by completing the subscription Application Form (the Partnership Share Agreement form). To join online, go to and follow the on-screen instructions or alternatively, complete the enclosed subscription Application Form. Your Application (either on-line or by completing the Application Form) must be received by the Plan Administrator, Equiniti, no later than 18 November HOW DO I KNOW THAT EQUINITI HAS RECEIVED MY APPLICATION? If you apply online, a confirmation page will confirm your instruction has been processed. You should print this page off. If you decide to complete the enclosed subscription form, on receipt of your completed form, Equiniti will validate that the form has been completed correctly. Once the form has been validated the Acknowledgement card will be stamped with the date of receipt and returned to your home address. If you have not received your stamped Acknowledgement card within five days of posting your form, please contact the Equiniti helpline on AM I ELIGIBLE TO PARTICIPATE IN THE MICHELIN SIP? Participation in the Plan is entirely voluntary. To be eligible to participate in the Plan you must be employed by one of the Participating Companies listed below, be working in the UK and be subject to UK tax. In addition, only employees who have worked within the Michelin Group for a period of three months ending on 18 November 2013, will be eligible to participate. The Participating Companies in the Michelin Share Incentive Plan are as follows: Michelin Tyre PLC Michelin Travel Partner UK Michelin Lifestyle Limited Michelin Development Limited This booklet is a guide to the Michelin Share Incentive Plan (the Plan ), comprising: Partnership Shares; and Matching Shares. 12/13

14 Investing in Michelin shares is a vote of confidence in the durability and strength of our Group.

15 EMPLOYEE & SHAREHOLDER, A LASTING COMMITMENT In the event of any discrepancy between this Employee Guide and the actual Rules of the Plan and the legislation, the Rules and legislation will prevail. This guide constitutes the document required by Article 4.1(e) of the Prospectus Directive (2003/71/EC). Further information in relation to the CGEM share price and CGEM can be found at com. A copy of the Rules of the Plan can be obtained from the Plan Administrator: Equiniti, Employee Share Plans, Highdown House, Yeoman Way, Yeoman Road, Worthing BN99 3BB Tel You are advised to read this guide carefully and, if you wish, consult an independent financial adviser about your personal position and participation in the Plan. Michelin reserves the right to suspend, terminate or amend the terms of the Plan. You will be notified of any changes to the Plan, which may be relevant to you. Except with your prior consent, no amendments will be made which would adversely affect your existing rights in relation to any Partnership or Matching Shares you own as a result of your participation in the Plan unless such amendments are made to take account of proposed or existing legislation or to reflect changes in the legislation. References to taxation are for guidance only, and set out the general principles expected to apply to an individual who is resident in the United Kingdom for tax purpose and for the purposes of the Convention between the United Kingdom and the French Republic for the avoidance of double taxation dated 19 June 2008, based on tax law and practices applicable at the time of publication of this brochure. Data Protection: For the purpose of the Data Protection Act 1998 (the Act), the data processor is Equiniti. Your personal details and the knowledge obtained from running your SIP account will be kept in a secure Equiniti database. This information will be used to provide you with services. When you speak to Equiniti on the telephone, some calls may be monitored or recorded in case Equiniti needs to check they have carried out your instructions correctly and to help improve the quality of service The Act gives you the right to access the information held about you. Your right of access can be exercised in accordance with the Act. Any access request may be subject to a fee of 10 to meet our costs in providing you with details of the information we hold about you. 14/15

16 BRO-ENGINT13 Please visit The MICHELIN 2012 annual report, the 30 June 2013 half-year report and other regularly published documents, including financial reports, are available in English and in French on the Company website ( We encourage you to read these documents. They contain important information regarding the Company s business, strategy and goals and financial results, together with a description of certain risk factors inherent in the Company and its business. These risks may have an influence on the future value of the Michelin share. Before deciding to invest, you should decide whether this plan is appropriate for you fiscally and financially, taking into consideration your own personal financial situation and needs and your ability to accept the risk of loss on the investment. Although Michelin has structured this plan to reduce such risk (by awarding free Matching Shares), risk of loss is inherent in any investment. If you have any doubts or questions on such matters, you should consult your own advisors. All details contained in this brochure are supplied for information purposes only. It is entirely up to you whether you subscribe to BIB ACTION The decision whether or not to participate in this Plan is entirely voluntary and personal. Your decision will have no effect, either positive or negative, on your employment with any Michelin Group company. The documents sent or provided under BIB ACTION 2013 do not in any way change your employment terms and conditions. Any advantages received as a result of this offer are not deemed part of your remuneration for the purposes of calculating any future rights or benefits. The opportunity to participate in the 2013 offer does not in any way presuppose the existence of any future offers or the opportunity to participate in them. This Plan is open to Michelin employees only and, on this basis, in most countries is being made without the need for registration with local governmental authorities. To the extent that the laws or regulations of any country would prohibit the offering of the Plan to employees in that country or require formalities that have not been accomplished, Michelin reserves the right to limit or prohibit participation in the affected country or countries. MOVING FORWARD TOGETHER

17 GLOSSARY AMF (AUTORITÉ DES MARCHÉS FINANCIERS, FINANCIAL MARKETS AUTHORITY) Independent French administrative authority whose mission is to protect savings, ensure the proper operation of the financial markets and to provide information for investors. HOLDING PERIOD A five-year period during which the Matching Shares awarded to the employee may not be released, except for the special leaver circumstances. CAPITAL GAIN/CAPITAL LOSS A financial gain or loss resulting from the sale of a share. The difference between the sale price and the purchase price of the share results in the gain or loss. DEBT TO EQUITY RATIO A ratio that measures a company s debt level in relation to its equity. The higher the ratio, the higher the company s debt. DIVIDEND A part of the net profits of a company paid to the shareholders. When a company makes a profit, it can distribute part of it to its shareholders if so decided by the General Meeting of Shareholders. GSP (GROUP SAVINGS PLAN) A plan offering employees the possibility of building up a portfolio of securities with the help of their company. Any sum paid into the plan is blocked for five years, except for cases of early release provided for by French law. OPERATING INCOME The operating income is income from the operating and investment process of the previous financial year. Operating income indicates the growth in wealth triggered by the company s industrial and business activity. PARTNERSHIP SHARES Shares acquired on your behalf by the trustee using the funds you have invested during the accumulation period. (FREE) MATCHING SHARES The free Matching shares you will be awarded by the Michelin Group.

18 PARIS STOCK MARKET (NYSE EURONEXT PARIS) The Paris Stock Market, which is now NYSE Euronext, is the official market for shares in France. The NYSE Euronext group was created from the 2006 merger between the New York Stock Exchange and Euronext, the European financial market that includes the Paris, Amsterdam, Lisbon, Porto, Brussels and LIFFE (London International Financial Futures and Options Exchange) stock markets. The group organizes, manages and develops the securities market on these stock markets. PRICE OF A SHARE Value of a share quoted on the Paris Stock Market at a given time. The share price is determined by a comparison between demand for and supply of the share. The market value of a share for UK tax purposes is the price on the Paris Stock Market converted into pounds sterling at the exchange rate on the relevant day. SHARE A financial instrument representing a fraction of a company s capital and giving its owner the right to vote at shareholders meetings, the right to receive information and the right to receive profits, the distribution of which is decided by the General Meeting of Shareholders (dividend). All of the shares issued by a company form the company s share capital. SHAREHOLDER A natural or legal person who holds shares in a company. In this capacity, the shareholder has the right to receive any dividends distributed if so decided by the shareholders at the General Meeting, and the right to vote at the General Meeting of Shareholders. STOCK MARKET CAPITALIZATION Stock market capitalization is the valuation of a company s equity through its stock market share price. It is calculated as follows: number of shares making up the capital multiplied by the stock market share price.