Page 281 - 2012 Annual Report

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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

III - CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 21 Share-based compensation plans

Under the employee stock purchase plans

, 2,108 thousand shares

were subscribed in 2012 (1,841 thousand shares subscribed in 2011). After

taking into account a 15.3% discount for non-transferability to the share

price on the grant date (10.0% in 2011), the fair value per subscribed share

was €1.2 on June 25, 2012, compared to €1.3 per subscribed share on

July 23, 2011.

Under the leveraged plans

implemented in 2012 and 2011, virtually all

employees and retirees of Vivendi and its French and foreign subsidiaries

were entitled to subscribe for Vivendi shares through a reserved share

capital increase, while obtaining a discounted subscription price, and to

ultimately receive the capital gain (calculated pursuant to the terms and

conditions of the plan) corresponding to 10 shares for one subscribed

share. A financial institution mandated by Vivendi hedges this transaction.

In 2012, 9,845 thousand shares were subscribed under the leveraged plans

(compared to 7,320 subscribed shares in 2011). After taking into account a

1.5% discount for non-transferability measured after the leveraged impact

(1.0% in 2011), the fair value per subscribed share on June 25, 2012 was

€3.1, compared to €2.9 per subscribed share on June 23, 2011.

Therefore, stock purchase and leveraged plans resulted in a capital

increase totaling €127 million on July 19, 2012 (including issue premium),

compared to €143 million on July 21, 2011.

CASH-SETTLED INSTRUMENTS

In 2006 and 2007, Vivendi granted specific instruments to its US resident

managers and employees, with economic features similar to those

granted to non-US resident managers and employees, except that these

equity instruments are settled in cash only. The value of the cash-settled

instruments granted is initially estimated as of the grant date and is

then re-estimated at each reporting date until the payment date and the

expense is adjusted pro rata taking into account the vested rights at each

such reporting date. All the rights for these plans were definitively vested

as of April 2010.

Stock appreciation right plans

When the instruments entitle the beneficiaries thereof to receive the

appreciation in the value of Vivendi share, they are known as “stock

appreciation rights” (SAR) which are the economic equivalent of stock

options. Under a SAR plan, the beneficiaries will receive a cash payment

upon exercise of their rights based on the Vivendi share price equal to the

difference between the Vivendi share price upon exercise of the SAR and

their strike price as set at the grant date. SAR expire at the end of a ten-

year period. The following table presents the value of outstanding stock

appreciation right plan measured as of December 31, 2012:

2007

2006

Grant date

April 23,

September 22,

April 13,

Data at grant date:

Strike price

(in US dollars)

41.34

34.58

Number of instruments granted

(in thousands)

1,281

24

1,250

Data at the valuation date (December 31, 2012):

Expected term

(in years)

2.1

1.8

1.6

Share price

(in US dollars)

22.49

Expected volatility

29%

Risk-free interest rate

0.07%

0.06%

0.05%

Expected dividend yield

5.87%

Fair value of the granted option as of December 31, 2012

(in US dollars)

0.20

0.40

0.34

Restricted stock unit plans

Under an RSU plan, the beneficiaries received, at the end of a four-year

period following the grant date, a cash payment based on the Vivendi

share price equal to the Vivendi share price at that date, plus the value

of dividends paid on Vivendi shares in respect of the two fiscal periods

subsequent to the two-year vesting period, and converted into the local

currency at the prevailing exchange rate. In 2011, the beneficiaries of

the RSU plan granted in 2007 received a cash payment for an aggregate

consideration of €2 million. Consequently, there are no more RSU plans

at Vivendi.