SCHNEIDER ELECTRIC : launches a capital increase reserved for employees

Rueil-Malmaison, March 29, 2012 - Schneider Electric SA announces today the launch of a capital increase reserved for employees under the Group employee savings plan (plan d'epargne salariale).

This offering, which is in line with the Group's policy to develop employee shareholding, is proposed to Group employees in twenty-six countries, including France. This plan covers around 80% of the employees of the Group. The subscription-revocation period is expected to take place from June 15 to June 20, 2012.

The payment and delivery of shares is expected on July 19, 2012.

The terms of this offering are described below.

Issuer
Schneider Electric SA
Euronext Paris - Compartment A
Ordinary share ISIN code: FR0000121972
Security eligible to the Deferred Settlement Service (Service de Règlement Différé or SRD)

Purpose of the transaction - Reasons for the offering
As per the decision made during the Annual Shareholders' Meeting held on April 21, 2011, the Supervisory Board has authorized the Management Board on December 15, 2011 to issue (i) shares reserved for employees participating in the Schneider Electric Group Savings Plan (pursuant to article L.225-129-2, L.225-129-6, and L.225-138-1 of the French Commercial Code and article L.3332-18 and seq. of the French Labour Code) and (ii) shares reserved for employees and entities created for the benefit of employees, of companies of the Group located outside France (pursuant to article L.225-129-2 and L.225-138 of the French Commercial Code).

In this framework, subscription of shares is proposed to employees of the Group in twenty-six countries, including France.  Two subscription plans can be proposed:

• a "classic" plan in which the subscriber is fully exposed to variations in the share price; and
• in certain countries, a "leveraged" plan (implemented through agreement with a sponsor bank) in which the subscriber benefits from the guarantee of receiving, on maturity, the amount of his or her personal contribution and a multiple of the performance of Schneider Electric SA shares based on an average of the closing share price calculated at maturity.

This offering reinforces the link between the Group and its employees by giving them the opportunity to be more involved in the developments and future performance of the Group.

Shares to be offered
The shareholders of Schneider Electric SA authorized the Management Board at the Annual Shareholders' Meeting held on April 21, 2011 (i) pursuant to the 22nd resolution to increase the share capital within the limit of 2% of the capital by issuance of new shares or other securities giving access to the company's share capital reserved for Group employees taking part in the savings plan and (ii) pursuant to the 23rd resolution, to increase the share capital within the maximum limit of 1% of the capital by issuing new shares reserved for employees and entities created for the benefit of the employees, of companies of the Group located outside France. 

The Supervisory Board authorized the Management Board on December 15, 2011 to use these authorizations within the limit of 4 900 000 shares (approximately 0.9% of the share capital as of December 31, 2011).

On November 28, 2011 the Management Board decided the principle methods regarding capital increases. It is expected that the Management Board will fix on June 14, 2012 the conditions of these capital increases and in particular the subscription price of the new shares, based on the average of the opening share prices quoted on the Eurolist market of Euronext Paris S.A on the twenty trading days preceding the day of such a decision ("Reference Price").  The shares created will bear right to dividends as of January 1, 2012. 

For the classic plan, the beneficiaries will be able to subscribe shares either directly, or by the intermediary of a fonds commun de placement d'entreprise ("FCPE"), at a price equal to 85% of the Reference Price for the beneficiaries in France and 80 % of the Reference Price for the beneficiaries outside of France. 

For the leveraged plan (in Belgium, Brazil, China, Czech Republic, Finland, Germany, Hong Kong, India, Indonesia, Ireland, Italy, Mexico, New Zealand, Philippines, Saudi-Arabia, Singapore, Spain, Switzerland, Taiwan and Thailand), the beneficiaries will be able to subscribe shares by the intermediary of an FCPE.

Conditions relating to subscription
The beneficiaries of the employee share plan are the employees (as well as retirees and pre-retirees in certain countries, having kept their investment in the Company Savings Plan) and officers of the companies of the Group where the head office is located in one of the twenty-six countries participating in the offering, who have at least three-month seniority in one of the companies of the Group on the last day of the subscription period, i.e., June 20, 2012.

The present offering is undertaken without preferential subscription right.

The unit holders of the FCPE will exercise their rights to vote in the Schneider Electric SA Annual Shareholders' Meetings indirectly, through the Supervisory Board of the FCPE.

The subscribers of this offering will have to hold the subscribed shares or the units of the FCPE at least until June 30, 2017 (inclusive), except in the occurrence of an early exit event.

Tentative timetable for the offering
Subscription-revocation period: expected from June 15 until June 20, 2012 (inclusive).
Capital increase: July 19, 2012.
The above dates are indicative and are subject to change. They will be finalized by an upcoming decision by the Management Board (expected on June 14, 2012) or by one of its members, acting by delegation.

Listing
The admission of new Schneider Electric SA shares to trading on the Euronext Paris market (Code ISIN: FR0000121972) will be effective, at the latest, on the day of the capital increase, i.e., July 19, 2012,The new shares will be assimilated with the existing shares. 

Hedging transactions 
The implementation of the leverage plan may generate, on behalf of the financial establishment counterparty of the exchange transaction, hedging transactions, prior to the implementation of the offering, beginning from the publication date of the present release and throughout the duration of the plan.

Special note regarding the international offering
This press release does not constitute an offer to sell or a solicitation to subscribe Schneider Electric SA shares. The offering of Schneider Electric SA shares reserved for employees will be conducted only in countries where such an offering has been registered with the competent local authorities and/or following the approval of a prospectus by the competent local authorities or in consideration of an exemption from the requirement to prepare a prospectus or register the offering. More generally, the offering will only be conducted in countries where all required filing procedures and/or notifications have been completed and the authorizations have been obtained. This press release is not destined for, and copies thereof should not be sent to, countries in which such a prospectus has not been approved or such an exemption is not available or where all of the required filing procedures and/or notifications have not been completed or where the authorizations have not been obtained. 

The securities described herein have not been and will not be registered with the U.S. Securities and Exchange Commission and may only be offered or sold in the United States in transactions that are exempt from the registration requirements of the U.S. Securities Act of 1933.

Employee Contact
The beneficiaries may address all questions regarding this offering to their contact person whose name is indicated in the brochure included in the subscription materials that were provided to them.

The present document constitutes the press release required by the AMF in accordance with article 14 of circular n° 2005-11 of December 13, 2005, and the press release required by the AMF in accordance with article 223-2 of the AMF General Regulations.

About Schneider Electric
As a global specialist in energy management with operations in more than 100 countries, Schneider Electric offers integrated solutions across multiple market segments, including leadership positions in energy and infrastructure, industrial processes, building automation, and data centres/networks, as well as a broad presence in residential applications. Focused on making energy safe, reliable, and efficient, the company's 130,000 plus employees achieved sales of 22.4 billion euros in 2011, through an active commitment to help individuals and organizations "Make the most of their energy."
www.schneider-electric.com