Employee Shareholding Plan From Michelin

The Michelin group operates in 56 countries and employs around 127,000 people. The company has released details of an offer, whereby 100,000 of these employees will be able to purchase Michelin shares at preferential conditions. This, the first phase of the offer, will focus on 16 countries.

In Europe, these are France, Germany, Spain, UK, Hungary, Italy and Switzerland. In the Americas, the countries are USA, Canada, Brazil and Colombia; in Africa, only Nigeria and in Asia, Japan, Singapore and Thailand. A separate plan, involving bonuses rather than shares, will take place in China, in order to comply with Chinese legislation.

The idea of the plan is to strengthen the existing relationship between the company and its employees, and to give them a personal stake in the successful development of the group. The price of the shares was set at 35 Euro and the subscription period is between April 11 to 30 2002. Discounts and preferential terms are available, and the offer has been designed to favour those with more modest incomes, so that everyone eligible can participate, if desired.

The cost of fees will be borne by Michelin and there will be no joining, management or account charges incurred by employees.Wherever possible, a standard offer was put forward, but legislation in five of the 16 countries means that the offer has had to be modified somewhat. The following 11 countries will operate the standard plan: Brazil, Canada, Spain, USA, France, Hungary, Japan, Nigeria, Singapore, Switzerland and Thailand, and the standard offer is thus: The subscription price includes a 20 per cent discount on the average reference price.

For the first 10 shares purchased, there is an extra discount of 50 per cent and, for the next 10, 33 per cent. From share 21 upwards, only the original 20 per cent discount applies. Easy terms are available, as are interest-free instalments, spread over twelve months.

Below is how the offer has been adapted to comply with local rules in the remaining five countries. Germany: Michelin’s participation is 33 per cent for the first 25 shares. China: as said earlier, this will be a bonus plan.

Employees can defer part of their salary for a minimum of five years. After this time, they can request the release of this money, to which is added a fixed bonus and a bonus linked to the share price. Colombia: similar to the standard offer, except for the implementation of a company mutual fund to accord with local stock exchange regulations.

Italy: a free share for each of the first five shares purchased, for the following six, one free share per two purchased. Payment by instalments is subject to interest charges. UK: a free share for each of the first five purchased, for the following ten, one free for every two purchased.

Shares are bought at market value, with no discount. For a three month period, local rules limit purchases to an amount equal to 13 shares at the current price..