Employee profit-sharing agreements

Employee incentive and profit-sharing agreements

On June 29, 2012, the latest profit-sharing and incentive agreements were signed for fiscal years 2012, 2013 and 2014, concerning TOTAL S.A., Elf Exploration Production, Total Exploration Production France, CDF Énergie, Total Marketing Services, Total Additifs et Carburants Spéciaux, Total Lubrifiants, Total Fluides, Totalgaz, Total Raffinage-Chimie, Total Petrochemicals France, Total Raffinage France and Total Global Services. Under the terms of these agreements, the amount available for employee incentive is determined based on the return on the Group’s equity (ROE) performance, as well as on the trend of the Total Recordable Injury Rate (TRIR) in view of the objectives and thresholds set out for each business unit.

The amount of the special incentive and profit-sharing reserve to be distributed by all of the companies that signed the Group agreements for fiscal year 2014 is estimated to total approximately €113 million.

Company savings plans

Pursuant to agreements signed on March 15, 2002 and their amendments, the Group created a “TOTAL Group Savings Plan” (PEGT) and a “Complementary Company Savings Plan” (PEC) for employees of the Group’s French companies having subscribed to these plans. These plans allow investments in a number of mutual funds including the “TOTAL ACTIONNARIAT FRANCE” fund that is invested in Company shares. A “Shareholder Group Savings Plan” (PEG-A) has also been in place since November 19, 1999 to facilitate capital increases reserved for employees of the Group’s French and foreign subsidiaries covered by this plan.

Company savings plans give employees of the Group’s French companies that subscribe to these plans the ability to make discretionary contributions (which the Group’s companies may, under certain conditions, supplement) to mutual funds chosen by the employee. The Group’s companies made gross additional contributions (abondement) to various savings plans that totaled €71.7 million in 2014.

Capital increase reserved for Group employees

The Combined General Meeting of May 16, 2014, in its fourteenth resolution, delegated to the Board of Directors the authority to carry out in one or more occasions within a maximum period of twenty-six months, a capital increase reserved for employees having subscribed to an employee savings Plan.

The Combined General Meeting, in its eighteenth resolution, also delegated to the Board of Directors the powers necessary to accomplish in one or more occasions within a maximum period of eighteen months, a capital increase with the objective of providing employees with their registered office located outside France with benefits comparable to those granted to the employees included in the fourteenth resolution of the Combined General Meeting.

Pursuant to the fourteenth delegation of this Meeting, the Board of Directors, during its July 29, 2014, meeting, decided to proceed with a capital increase reserved for employees that included a classic offering and a leverage offering depending on the employees’ choice, within the limit of 18 million shares with dividend rights as of January 1, 2014. The Chief Executive Office was also delegated all powers necessary in order to designate the dates of the beginning and end of the subscription period as well as the subscription price of the shares. This capital increase, initiated in 2014, is due to end before the Shareholders’ Meeting of 2015.

The prior capital increase reserved for the Group’s employees was decided by the Board of Directors on September 18, 2012, under the terms of the authorization of the Combined General Meeting of May 11, 2012, and resulted in the subscription of 10,802,215 shares with a par value of €2.50 at a unit price of €30.70. The issuance of the shares was acknowledged on April 25, 2013.

The capital increase reserved for employees approved by the Board of Directors at its meeting of September 18, 2012, was conducted under the PEG-A: (i) for employees of the Group’s French subsidiaries, through the “TOTAL ACTIONNARIAT FRANCE” fund in the case of standard subscription and through the “TOTAL FRANCE CAPITAL+” fund in the case of subscription to the leveraged offer; and (ii) for employees of foreign subsidiaries, through the “TOTAL ACTIONNARIAT INTERNATIONAL CAPITALISATION” fund in the case of standard subscription and through the “TOTAL INTERNATIONAL CAPITAL” fund in the case of subscription to the leveraged offer. In addition, U.S. employees participated in this operation by directly subscribing to American Depositary Shares (ADS), and Italian and German employees by directly subscribing to new shares at the Group Caisse Autonome (in Belgium). In addition, employees in certain other countries benefited from the leveraged subscription offer by means of a dedicated vehicle.

The previous capital increases reserved for employees were conducted under the PEG-A through the “TOTAL ACTIONNARIAT FRANCE” fund for employees of the Group’s French subsidiaries and through the “TOTAL ACTIONNARIAT INTERNATIONAL CAPITALISATION” fund for the employees of foreign subsidiaries. In addition, U.S. employees participated in these operations by directly subscribing to American Depositary Shares (ADS) and Italian employees (as well as German employees starting in 2011) by directly subscribing to new shares at the Group Caisse Autonome.

Capital increase as part of a global free share plan intended for Group employees

The Shareholders’ Meeting on May 16, 2008 authorized the Board of Directors to proceed with the free grant of Company shares to the Group’s employees as well as to executive directors of the Company or Group companies, for a period of thirty-eight months, within the limit of 0.8% of the outstanding share capital at the date of the decision of the Board of Directors to grant such shares.

Pursuant to this authorization, the Board of Directors at its meeting on May 21, 2010 decided on the terms and conditions of the global plan of free TOTAL shares in favor of the Group’s employees and delegated to the Chairman and Chief Executive Officer of the Company all powers necessary for implementing this plan.

As a result, on July 2, 2012, the Chairman and Chief Executive Officer of the Company acknowledged the issuance and the final allocation of 1,366,950 ordinary shares with a nominal value of €2.50 to the designated beneficiaries at the end of the vesting period of two years in application of the grant conditions defined by the Board of Directors meeting held on May 21, 2010.

Furthermore, on July 1, 2014, the Chairman and Chief Executive Officer of the Company acknowledged the issue and definitive grant of 666,575 ordinary shares with a nominal value of €2.50 to the designated beneficiaries at the end of the vesting period of four years in application of the grant conditions defined by the Board of Directors at its meeting of May 21, 2010 (for further information on TOTAL’s global free share plan, refer to point 4.5.2. of chapter 6).

Pension savings plan

The September 29, 2004 Group agreement on the provisions for retirement savings set up a Collective Retirement Savings Plan (PERCO). An amendment to this plan signed on April 15, 2011 provides for the additional contribution of credit transferred from the time-savings scheme to the PERCO (CET-PERCO gateway). An amendment to the plan signed on March 30, 2012 adjusted the management mechanisms of the PERCO in order to better secure retirement savings and extended the scope of the agreement to include Total Petrochemicals
France, Total Raffinage-Chimie and Total Raffinage France.

Employee shareholding

The total number of TOTAL shares held directly or indirectly by the Group’s employees as of December 31, 2014, is as follows:

Table : Employee shareholding

As of December 31, 2014, the Group’s employees held, on the basis of the definition of employee shareholding set forth in Article L. 225-102 of the French Commercial Code, 109,704,400 TOTAL shares, representing 4.60% of the Company’s share capital and 8.78% of the voting rights that could be exercised at a Shareholders’ Meeting on that date.

The management of each of the FCPEs (Collective investment funds) mentioned above is controlled by a dedicated Supervisory board, two-thirds of its members representing holders of fund units and one-third representing the Company. The Board is responsible for reviewing the Collective investment fund’s management report and annual financial statements, as well as the financial, administrative and accounting management of the fund, exercising voting rights attached to portfolio securities, deciding contribution of securities in case of a public tender offer, deciding mergers, spinoffs or liquidations, and granting its approval prior to changes in the rules and procedures of the Collective investment fund in the conditions provided for by the rules and procedures.

These rules and procedures also stipulate a simple majority vote for decisions, except for decisions requiring a qualified majority vote of two-thirds plus one related to a change in a fund’s rules and procedures, its conversion or disposal.

For employees holding shares outside of the employee collective investment funds mentioned in the table above, voting rights are exercised individually.