282
Annual Report -
2013
-
Vivendi
4
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 22. Share-based compensation plans
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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 the grant date.
For the employee stock purchase and leveraged plans subscribed in 2013 and 2012, the applied valuation assumptions were as follows:
2013
2012
Grant date
June 28
June 25
Subscription price
(in euros)
12.10
10.31
Data at grant date:
Share price
(in euros)
14.55
13.57
Discount to face value
16.82%
24.02%
Expected dividend yield
6.87%
7.37%
Risk-free interest rate
1.19%
1.37%
5-year interest rate
in fine
6.08%
6.51%
Repo rate
0.36%
0.36%
Under the employee stock purchase plans, 2,055 thousand shares were
subscribed in 2013 (2,108 thousand shares subscribed in 2012). After
taking into account a 15.2% discount for non-transferability to the share
price on the grant date (15.3% in 2012), the fair value per subscribed
share was €0.24 on June 28, 2013, compared to €1.18 per subscribed
share on June 25, 2012.
Under the leveraged plans, 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 2013, 9,758 thousand shares were subscribed under the leveraged
plan (compared to 9,845 subscribed shares in 2012). After taking into
account a 1.5% discount for non-transferability measured after the
leveraged impact (unchanged compared to 2012), the fair value per
subscribed share on June 28, 2013 was €2.23, compared to €3.05 per
subscribed share on June 25, 2012.
In 2013, the charge recognized with respect to employee stock purchase
and leveraged plans amounted to €23 million (compared to €33 million
in 2012).
Stock purchase and leveraged plans resulted in a capital increase
(including issue premium) totaling €149 million on July 25, 2013, and
€127 million on July 19, 2012.
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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 the Vivendi share price, 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.
