SCH2017_DRF_EN_Livre.indb

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Corporate governance report Interests and compensation of Group Senior Management

ii. Dismissal, non-renewal or resignation as CEO or Deputy CEO in the event of a reorientation of the strategy pursued and promoted by him until that time, whether or not in connection with a change in shareholder structure as described above; and iii. Dismissal, non-renewal or requested resignation as CEO or Deputy CEO when, on average, two-thirds of the Group performance criteria (to be distinguished from individual performance objectives) have been achieved for the last 4 financial years from the day of resignation.

The entitlement to Involuntary Severance Pay depends on the average rate of achievement of the Group’s performance criteria (to be distinguished from individual performance objectives) used to determine the performance incentive for the last 3 financial years preceding the date of the board meeting at which the decision is made.

If the achievement rate of the Group criteria are…

Then…

Less than 66%

No compensation shall be awarded to the Corporate Officer The Corporate Officer shall receive 75% of the Maximum Amount

66%

The Corporate Officer shall receive compensation calculated on a linear basis at a rate of 75 to 100% of the Maximum Amount

Between 66 and 100%

At least 100%

The Corporate Officer shall receive 100% of the Maximum Amount

In any case, involuntary severance pay will not be paid if the resignation is a consequence of wrongful or gross misconduct. Non-Compete Compensation Both Corporate Officers are bound by a non-compete agreement in case of resignation from the Group. The 1 year agreement calls for compensation to be paid at 60% of annual fixed and target variable parts ( i.e. including complementary payments). In line with the recommendations of the AFEP/MEDEF Code, at its meeting of April 25, 2017 the board decided that, for any case of voluntary departure, it will determine whether or not to apply the non- compete clause. Retention of Stock Options, Stock Grants and Performance Shares Messrs. Tricoire and Babeau are entitled to retain, subject to performance conditions, the benefit of their stock options, stock grants and performance shares already granted on February 14, 2018 in the event of involuntary severance during the vesting period or prior to having exercised said options. The foregoing will be applicable provided only that: E The average rate of achievement of Group performance criteria that determine the performance incentive calculated for the last 3 financial years at the time of departure, is at least two-thirds of the objective; and E The resignation is not the result of wrongful or gross misconduct. With respect to plans granted after February 14, 2018, Messrs. Tricoire and Babeau are entitled to keep the benefit of such attributions of restricted shares or stock options in case of involuntary severance during their acquisition period, or before exercising the options concerned, in proportion of the time of their presence with the Company in any capacity during the acquisition or exercise period of such restricted shares or stock options. Their entitlement will be subject to the fulfillment of the performance conditions determined in the Plan. In case the Corporate Officer’s involuntary departure results from any material change in Schneider Electric’s shareholding structure or from a reorientation of the strategy pursued and promoted by him (both cases as defined in paragraphs i. and ii. in relation to Involuntary

Severance Pay), the board may decide to grant him the right to keep the benefit of all such restricted shares or stock-options previously granted to him, provided however the arithmetic average rate of achievement of the Group performance objectives used to determine the annual incentive in cash for the last 3 financial years completed on the date of his departure, amounts to at least two-thirds of the target figure and that his departure is not the result of gross negligence or serious misconduct. The board will motivate its decision. Health, Life and Disability schemes As Corporate Officers, Messrs. Tricoire and Babeau are eligible to: (i) The collective welfare plan applicable to employees of Schneider Electric SE and Schneider Electric Industries SAS covering the risks of illness, incapacity, disability and death; (ii) Additional coverage of the Group’s French executives for risks of illness, incapacity, disability and death. The main features of this coverage are: 1) In case of illness or accident resulting in a temporary stoppage or incapacity (of any category), the Corporate Officer shall be entitled to continue to receive 18 months’ worth of his compensation (fixed and target variable) authorized by the board, 2) In case of death, the policyholder’s beneficiaries shall be entitled to the compensation (fixed and target variable) authorized by the board of directors for the current month, along with a death benefit equal to 6 months of the average compensation authorized by the board of directors (monthly average of the fixed and variable compensation paid during the last 12 months of employment); (iii) The entitlement to a life annuity pension paid to the surviving spouse in the event of death before his retirement, or if he left the company after the age of 55 without returning to work, equal to 60% of 25% of the average of compensation paid during the 3 years before the date of death, with a deduction made from the theoretical pension payment that may be obtained under insurance conditions from the additional payments that will have been made; (iv) In the event of disability causing him to completely stop working, the right to pension payments (payable to the surviving

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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