Blizzard 2009 Annual Report Download - page 89
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RestrictedShareUnits(RSUs)(settledinequity)
RestrictedshareunitswereawardedtononU.S.residentexecutivesandemployeesofVivendi
Gamesin2006and2007upontheachievementofcertainoperatingobjectivesassetforthinVivendi’s
annualbudget,andRSUssoawardedcliffvestedattheendofatwoyearvestingperiod.Astheshares
issueduponsettlementoftheRSUsareordinarysharesofthesameclassasVivendioutstandingshares,
employeeshareholdersareentitledtodividendandvotingrightsrelatingtotheirsharesuponvesting.
RecipientsarerestrictedfromsellingthesharesissueduponsettlementoftheRSUsuntilafterafouryear
periodfromthedateofgrant.TheseRSUsaredenominatedineuros.
Compensationcostrecognizedisbaseduponthevalueoftheequityinstrumentreceivedbythe
employeeswhichisequaltothedifferencebetweenthefairvalueofthesharestobereceivedupon
settlementoftheRSUsasofthegrantdateandthediscountedvalueofthedividendsexpectedtobe
distributedbyVivendioverthetwoyearvestingperiod.CompensationcostrelatingtoRSUsisrecognized
onastraightlinebasisoverthetwoyearvestingperiod.
(ii)AwardsgrantedtoU.S.residentexecutivesandemployees(settledincash)
In2006,inconnectionwiththedelistingofVivendisharesfromtheNewYorkStockExchange,
equityawardsweregrantedtoVivendiGames’U.S.residentexecutivesandemployees,witheconomic
characteristicssimilartothosegrantedtononU.S.employeesasdescribedabove.However,theseequity
instrumentsareexclusivelycashsettledinstrumentswiththefollowingcharacteristics:
• WhentheequityawardsgrantentitlementtotheappreciationofthevalueofVivendishares,
theyareknownas“stockappreciationrights”(“SARs”),whicharetheeconomicequivalent
ofstockoptions;
• WhentheequityawardsgrantentitlementtothevalueofVivendishares,theyareknownas
“restrictedstockunits”(“RSUs”),whicharetheeconomicequivalentofrestrictedshares;
• VivendihasconvertedtheformerAmericanDepositaryShares(“ADS”)stockoptionawards
foritsU.S.residentemployeesintoSARsawards;and
• SARsandRSUsaredenominatedinU.S.dollars.
StockAppreciationRights(SARs)awards
EmployeesgrantedSARswillreceive,uponexerciseoftheSARs,acashpaymentbasedonthe
Vivendishareprice,equaltothedifferencebetweentheVivendisharepriceuponexerciseoftheSARsand
theirstrikepriceassetatthegrantdate.SimilartostockoptionsawardedbeforeJanuary1,2007,SARs
vestannuallyinonethirdtranchesonthegrantdate’sanniversary.TwothirdsofthosevestedSARs
becomeexercisableatthebeginningofthethirdanniversaryofthegrantdateandtheremainingonethird
becomesexercisableatthebeginningofthefourthanniversaryofthegrantdate.Thecompensationcostof
theSARsgrantedbefore2007isrecordedoverthevestingperiodbutnotonastraightlinebasis,asthe
SARsvestinonethirdtranchesoverthreeyears.Theexpenseisaccountedforovertherequiredservice
periodusingtheacceleratedmultitranchemethodinaccordancewiththefollowingspreadrates:61%in
thefirstyearoftheplan,28%inthesecondyear,and11%inthethirdyear.
In2007,VivendiGamesemployeesreceivedSARswhichcliffvestattheendofathreeyear
vestingperiod.Therefore,thecompensationcostoftheseSARsisrecognizedonastraightlinebasisover
thevestingperiod.
Thefairvalueoftheseawardsisremeasuredattheendofeachquarterenduntilthedateon
whichtheSARsareexercised,andtheexpenseisadjustedproratafollowingeachremeasurementto
vestedSARsasoftherelevantreportingdate.