Page 280 - 2012 Annual Report

280 VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
III - CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 21 Share-based compensation plans
Stock option plans
Stock options granted in 2012 and 2011 vest at the end of a three-year
period and expire at the end of a ten-year period (with a 6.5 year expected
term) and the compensation cost determined at grant date is recognized
on a straight-line basis over the vesting period.
On April 17, 2012, 2,514 thousand stock options were granted, compared
to 2,527 thousand granted on April 13, 2011. After taking into account
a 2.35% risk-free interest rate (3.21% in 2011), the fair value of each
option granted was €0.96, compared to €2.16 per option on April 13, 2011,
corresponding to a global fair value of €2 million (compared to €5 million
in 2011).
Performance share plans
Performance shares granted in 2012 and 2011 vest at the end of a two-
year period. The compensation cost is therefore recognized on a straight-
line basis over the vesting period. Performance shares are available at
the end of a four-year period from the date of grant. However, as the
shares granted are ordinary shares of the same class as existing shares
composing the share capital of Vivendi SA, employee shareholders are
entitled to dividends and voting rights attached to these shares at the end
of the two-year vesting period. The compensation cost corresponds to the
value of the equity instruments received by the beneficiary, and is equal
to the difference between the fair value of the shares to be received and
the discounted value of dividends that were not received over the vesting
period.
On April 17, 2012, 1,818 thousand performance shares were granted,
compared to 1,679 thousand granted on April 13, 2011. After taking into
account a discount for non-transferability of 7.10% of the share price on
April 17, 2012 (4.50% on April 13, 2011), the fair value of each granted
performance share was €9.80, compared to €16.84 per share on April 13,
2011 corresponding to a global fair value of €18 million (compared to
€28 million in 2011).
50 bonus share plan
On July 16, 2012, Vivendi adopted a 50 bonus share plan per employee of
all the group’s French subsidiaries. These shares will be issued at the end
of a two-year period, i.e., July 17, 2014, subject to the employee being in
active employment at this date and without any performance conditions.
The compensation cost was recognized on a straight-line basis over this
period. The shares will only be available after another two-year period.
However, as the shares granted are ordinary shares of the same class
as existing shares making up the share capital of Vivendi SA, employee
shareholders will be entitled to dividend and voting rights relating to all
their shares from the end of the two year vesting period.
On July 16, 2012, 729 thousand bonus shares were granted. After taking
into account a discount for non-transferability of 9.30% of the share price
on July 16, 2012, the fair value of each granted bonus share was €12.40,
a total of €9 million.
EMPLOYEE STOCK PURCHASE AND LEVERAGED PLANS
Vivendi also maintains share purchase plans (stock purchase and
leveraged plans) that allow substantially all of its employees and retirees
to purchase Vivendi shares through capital increases reserved to them.
These shares, which are subject to certain sale or transfer restrictions,
may be purchased by employees with a maximum discount of 20% on
the average opening market price for Vivendi shares during the 20
trading days preceding the date of approval of the share capital increase
by the Management Board (purchase date). The difference between
the subscription price of the shares and the share price on the date of
grant (corresponding to the subscription period closing date) represents
the benefit granted to the beneficiaries. Furthermore, Vivendi applies a
discount for non-transferability in respect of the restrictions on the sale or
transfer of the shares during a five-year period, which is deducted from the
benefit granted to the employees. The value of the stock purchase plans
granted is estimated and fixed at grant date.
For the employee stock purchase and leveraged plans subscribed in 2012 and 2011, the applied assumptions were as follows:
2012 2011
Grant date June 25, June 23,
Subscription price (in euros) 10.31 15.27
Data at grant date:
Share price (in euros) 13.57 18.39
Discount to face value 24.02% 16.97%
Expected dividend yield 7.37% 8.16%
Risk-free interest rate 1.37% 2.44%
5-year interest rate 6.51% 6.15%
Repo rate 0.36% 0.36%