Page 283 - 2012 Annual Report

283
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
21.3. PLANS GRANTED BY ACTIVISION BLIZZARD
21.3.1. Information on plans granted by Activision Blizzard
As part of the creation of Activision Blizzard on July 10, 2008, Vivendi
assumed the outstanding plans of Activision.
The accounting methods applied to value these granted plans are
described in Note 1.3.10. More precisely, the volatility applied in valuing
the plans granted by Activision Blizzard consists of the historical volatility
of Activision Blizzard shares and the implied volatility based on traded
put and call options. The risk-free interest rate used was a forward rate
and the expected dividend yield assumption was based on the company’s
historical and expected future amount of dividend payouts.
On July 28, 2008, the Board of Directors of Activision Blizzard adopted the
Activision Blizzard Inc. 2008 Incentive Plan, further amended and restated
by the Board of Directors and the Compensation Committee of this Board
with stockholder approval (as so amended and restated, the “2008 Plan”).
The 2008 Plan authorizes the Compensation Committee of the Board of
Directors to provide Activision Blizzard’s stock-based compensation in the
form of stock options, share appreciation rights, restricted stock, restricted
stock units, performance shares, performance units and other performance
or value-based awards. The stock-based compensation program of
Activision Blizzard for the most part currently utilizes a combination of
options and restricted stock units. Under the terms of the 2008 Plan, the
exercise price for the options, must be equal to or greater than the closing
price per share of the common stock of Activision Blizzard on the date the
award is granted, as reported on NASDAQ.
For the main stock option plans, performance share plans and bonus share plans of 2012 and 2011, the applied assumptions were as follows:
2012 2011
Weighted-average data at grant date: (a)
Option strike price (in US dollars) 10.95 12.54
Share price (in US dollars) 10.95 12.54
Expected volatility 41% 44%
Expected dividend yield 1.65% 1.34%
Performance conditions achievement rate na* na*
na*: not applicable.
(a) Relates to the weighted-average by number of instruments for each grant per fiscal year.
Stock option plans
Stock options have time-based vesting schedules, generally vesting
annually over a period of three to five years and the options expire at the
end of a ten-year period.
In 2012, 4,296 thousand stock options were granted, compared to
4,052 thousand stock options in 2011. The weighted-average fair values of
the granted options were $3.47 per option (with a 1.12% risk-free interest
rate) compared to $4.17 in 2011 (with a 1.91% risk-free interest rate).
For stock options granted in 2012, the expected term was 7.05 years,
compared to 6.58 years for the options granted in 2011.
Restricted stock plans
Restricted stocks either have time-based vesting schedules, generally
vesting in their entirety on the third anniversary of the date of grant or
vesting annually over a period of three to five years, or vest only if certain
performance measures are met. Concerning the restricted stocks granted
in 2012 and 2011, the shares are vested at the end of a three-year period.
In 2012, 15,498 thousand restricted stocks were granted, compared to
4,918 thousand restricted stocks in 2011. The weighted-average fair
values of the granted restricted stocks were $11.81 per instrument
compared to $12.30 in 2011.
In addition, in connection with the consummation of the Activision and
Vivendi Games business combination on July 9, 2008, the Chief Executive
Officer of Activision Blizzard received a grant of 2,500,000 market
performance-based restricted shares, which vested in 20% increments on
each of the first, second, third, and fourth anniversaries of the date of
grant, with another 20% vesting on December 31, 2012, the expiration
date of the Chief Executive Officer’s employment agreement with
Activision Blizzard. As of December 31, 2012, the market performance
measure was not achieved and all of the market performance-based
restricted shares granted to the Chief Executive Officer were forfeited.