Page 108 - 2012 Annual Report

108 VIVENDI l 2012 l Annual Report
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INFORMATION ABOUT THE COMPANY – CORPORATE GOVERNANCE
SECTION 2 - ADDITIONAL INFORMATION ABOUT THE COMPANY
SHARE CAPITAL
2.2.5. Convertible Securities, Exchangeable Securities or Warrant Securities
2.2.5.1. BONDS CONVERTIBLE INTO NEW SHARES AND/
OR EXCHANGEABLE FOR EXISTING SHARES
(OCEANES)
No OCEANEs are outstanding.
2.2.5.2. BONDS MANDATORILY REDEEMABLE IN SHARES
(ORAS)
No ORAs are outstanding.
2.2.5.3. WARRANTS (BSAS)
No BSAs are outstanding.
2.2.6. Stock Subscription Option Plans
2.2.6.1. GRANT CRITERIA
Since 2002, the company has only put in place stock subscription option
plans. These plans have a 10-year term.
Grants of stock subscription option plans are based on three criteria: (i)
level of responsibility; (ii) individual performance; and (iii) rewarding the
loyalty of high-potential managers.
As of December 31, 2012, a total of 53,405,701 options were outstanding
under all existing stock subscription option plans (after deducting the
number of stock options exercised or canceled pursuant to the termination
of employment of certain beneficiaries). These options represent a
maximum nominal share capital increase of €294 million or 4.03% of the
company’s share capital.
As a result of the termination of Vivendi’s ADR (American Depository
Receipt) program and the delisting of the company’s ADRs from the NYSE
in 2006, any stock options that were exercisable into ADRs and granted to
Directors and employees of the Group residing in the United States were
converted into Stock Appreciation Rights (SARs). SARs are instruments
that settle in cash only and therefore have no dilutive effect. The trading
value of the SARs is the average of the high and low prices of Vivendi’s
ordinary shares as quoted on Euronext Paris on that trading day, converted
from Euros to US dollars based on the daily Euro/US dollar exchange rate
as published by the European Central Bank on the date of exercise of
the SAR. As of December 31, 2012, there were 5,063,754 SARs (formerly
ADRs) outstanding.
2.2.6.2. KEY FEATURES OF THE PLANS
Stock options are fully acquired by the beneficiaries after a three-year
vesting period and may be exercised on one or more occasions. Shares
received upon the exercise of the options can be freely transferred,
subject, for beneficiaries who are French tax residents, to the expiration
of the beneficial holding period applicable under French tax law (currently
a four-year period). In the event of a tender offer for Vivendi shares,
the options under any of the plans will immediately vest and become
exercisable.
From 2009 until 2010, pursuant to the Combined Shareholders’ Meeting
of April 24, 2008, the grant of options had been subject to the same
performance criteria and quantitative methods of allocation as those used
for performance shares (see Section 3.3). The performance conditions
were based on three criteria as set by the Supervisory Board, which
were weighted as follows: adjusted net income (50%), cash flow from
operations (30%) and the performance of Vivendi shares based on a
comparison of three trading indices (20%): DJ Stoxx Media, DJ Stoxx
Telco and CAC 40.
In 2011, the definitive grant of stock subscription options was effective
based on the satisfaction of the following performance conditions,
assessed over two years: adjusted net income (45%), cash flow from
operations (25%) and the performance of Vivendi shares based on external
indicators (30%) determined by the Stoxx Europe 600 Telecommunications
index (60%) as well as the value of a selected portfolio of Media securities
(40%). All options granted will be definitively granted if the weighted
total of the three indicators reaches or exceeds 100%; 50% will vest if
the weighted total of the three indicators reaches the applicable value
thresholds, and no options will vest if the weighted total of the three
indicators is lower than the applicable value thresholds.
Since 2012, the definitive grant of stock subscription options was effective
based on the satisfaction of the following performance conditions, as
assessed at the end of a period of two consecutive years, based on: an
internal indicator (70%) determined by an EBITA margin rate (adjusted
operating income/revenues), which will be recorded as of December 31,
2013 on a cumulative basis including the 2012 and 2013 fiscal years; and
on external indicators (30%) determined by the performance of Vivendi
shares from January 1, 2012 to December 31, 2013 in comparison to
two trading indices: Stoxx Europe 600 Telecommunications (70%) as
well as the value of a selected portfolio of Media securities (30%). All
options granted will vest if the weighted total of the internal and external
indicators reaches or exceeds 100%; 50% will vest if the weighted total
of the indicators reaches the applicable value thresholds, and no options
will vest if the weighted total of the indicators is lower than the applicable
value thresholds.
2.2.4.7. TREASURY SHARES HELD BY THE GROUP
As of December 31, 2012, Vivendi’s subsidiaries held 465 shares of the
company.
2.2.4.8. OPEN POSITIONS ON DERIVATIVE FINANCIAL
INSTRUMENTS AS OF DECEMBER 31, 2012
None.