Atari 2012 Annual Report Download - page 31

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
31
BOARD OF DIRECTORS' SPECIAL REPORT ON ALLOCATION OF PERFORMANCE SHARES TO THE
ANNUAL AND SPECIAL SHAREHOLDERS’ MEETING CALLED TO APPROVE THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2012
(Prepared in accordance with Article L. 225-197-4 of the French Commercial Code)
To our Shareholders,
As required by Article L. 225-197-4 of the French Commercial Code (Code de commerce), we hereby submit to you this
report with information on transactions covered by Articles L. 225-197-1 to L. 225-197-3 of the French Commercial Code.
I- DESCRIPTION OF THE PERFORMANCE SHARE PLANS
Atari’s Board of Directors met on May 23, 2011, September 30, 2011 and November 4, 2011 and decided - as permitted
by the resolution 19 of the Special Shareholders’ Meeting of September 30, 2009 (for the May and September
allocations) and by the resolution 14 of the Special Shareholders Meeting of September 30, 2011 (for the November
allocation) and by Articles L. 225-197-1 et seq. of the French Commercial Code – to allocate rights to performance
shares to some of the employees and officers (hereafter the “Beneficiaries”) of Atari S.A., Atari Inc. and some of Atari’s
subsidiaries headquartered in France pursuant to the provisions of Articles L.225-197-2 of the French Commercial Code.
Atari intends to engage its employees and officers to the development of the Atari group, the implementation of its
strategy and its future results, and retain those individuals deemed to be key staff members by the Board of Directors,
upon recommendation of the Nomination and Compensation Committee and in accordance with applicable regulatory
prescriptions. Consequently, the granting and then the vesting of the performance shares are contingent upon
performance and attendance criteria.
Vesting date, lock up period and grant criteria: The vesting period applicable to the shares allocated to the Beneficiary
shall end two (2) years from the initial allocation date of the rights to performance shares. The grant of the performance
shares (contingent on performance criteria) will apply, each year, on half of the rights to performance shares. At the end
of the two years period, the vesting of the performance shares is subject to attendance criteria at the date of the vesting.
The lock up period is established for two (2) years after the vesting date.
The Beneficiary shall be present in the Group at the final grant date and at the vesting date of the shares.
Because of the change in the Company’s business model, the size of the Company and the current economic
environment, 2-year criteria as well as peer group criteria are not relevant. As a result the Board of directors reviews
performance criteria each year of the vesting period upon the recommendation of the Nomination and Compensation
Committee. Performance criteria are those set annually by the Board of Directors for the quantitative elements of the
CEO performance criteria. These are generally based on the achievement of Current operating Income, cash and
revenue targets. The Board of Directors approving the full year Company’s accounts for the considered year determines
the percentage of achievement of these annual criteria.
Rights attached to the performance shares: The performance shares delivered at the end of the vesting period shall be
governed by the articles of incorporation and bylaws, and all related provisions applicable to shares of common stock
issued by the Company. They shall be entitled to the same dividends as other shares of common stock with the same
nominal value. At the end of the vesting period, pursuant to the conditions of the plan, vested shares shall be registered
in an account in the name of their holder.
When disposing of their performance shares, the Beneficiaries shall comply with the restrictions of article L. 225-197-1 of
the French Commercial Code and by the Group deontological rules.
Beneficiaries and number of rights to performance shares allocated by the Board of Directors: For the three plans, the
Board of Directors has decided to allocate a total number of rights to performance shares of up to 1,937,290 shares of
the Company. For the three plans, the grant of the shares is subject to the achievement of performance and attendance
criteria and the vesting is subject to attendance criteria.
The Board decided that, subject to performance and attendance criteria and over a 2-year acquisition period starting in
FY 2013, Mr. Wilson could receive up to 500,000 rights to performance shares, Mr. Dangeard could receive up to
400,000 rights to performance shares and Mrs. Alexandra Fichelson could receive up to 70,000 rights to performance
shares. Assuming all the rights are finally granted and become performance shares, the estimated value of the allocation
as the date of the authorization given by the Board was €1.4 million, €0.6 million and €0.2 million respectively. The
number of granted shares is as follows:
Beneficiary
Grant as of
March 31, 2012
Grant as of May
23, 2012 (1)
Title
Grant date (1)
Jim Wilson
-
94,750
Chief Executive Officer, Director
May 23, 2013
Frank Dangeard
-
-
Chairman of the Board
September 30, 2013
Alexandra Fichelson
-
13,265
General Secretary, Director
May 23, 2013
(1) Subject to attendance criteria at the vesting date.
The vested shares shall be either newly issued shares or existing shares held by the Company, at the option of the
Company. In the case of new shares being issued, a request for listing will be carried out.
II- SUMMARY OF THE PRINCIPAL FEATURES OF PERFORMANCE SHARE PLANS
For the three plans, the Board of Directors has decided to allocate a total number of 1,937,290 rights to performance
shares of the Company. For the three plans, the final grant of the shares is subject to the achievement of performance