262 / 348
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 20. Share-based compensation plans
20.2.2.
Employee stock purchase and leveraged plans
In 2014, no capital increase, reserved for employees of participating
group companies that have joined an employee stock purchase and
leveraged plans, was put into place by Vivendi.
In 2013, Vivendi made a capital increase reserved for employees
(stock purchase and leveraged plans) that allowed substantially all
of its employees and retirees to subscribe for Vivendi shares. These
shares, which are subject to certain sale or transfer restrictions, may
be subscribed by employees for 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 and the subscription price of new shares to issue.
The difference between the subscription price of the shares and the share
price on that date represents the benefit granted to the beneficiaries.
Furthermore, Vivendi applied 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 subscribed shares is estimated and fixed at the date of the
subscription price for new shares to issue.
For the employee stock purchase and leveraged plans subscribed in 2013, the applied valuation assumptions were as follows:
2013
Grant date
June 28
Subscription price (in euros)
12.10
Data at grant date:
Share price (in euros)
14.55
Discount to face value
16.82%
Expected dividend yield
6.87%
Risk-free interest rate
1.19%
5-year interest rate in fine
6.08%
Repo rate
0.36%
Under the
employee stock purchase plans
, 2,055 thousand
shares were subscribed in 2013 at €12.10 per share. After taking into
account a 15.2% discount to the share price on the grant date for non-
transferability, the fair value per subscribed share was €0.24 on June 28,
2013.
Under the
leveraged plans
, 9,758 thousand shares were subscribed
in 2013. After taking into account a discount for non-transferability
measured after the leveraged impact, the fair value per subscribed share
on June 28, 2013 was €2.23.
The leveraged plans entitles virtually all employees and retirees of
Vivendi and its French and foreign subsidiaries 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, the charge recognized with respect to employee stock purchase
and leveraged plans amounted to €8 million.
Stock purchase and leveraged plans resulted in a capital increase
(including issue premium) with an aggregate value of €149 million on
July 25, 2013.
20.2.3.
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 of 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.
As of December 31, 2014, the outstanding SAR was 4,427 thousand
(compared to 2,980 thousand as of December 31, 2013). All rights related
to SAR were vested and their aggregate intrinsic value amounted to
$6 million. As of December 31, 2014 and 2013, the amount accrued for
these instruments was non-significant.
262
Annual Report 2014