Ubisoft 2008 Annual Report Download - page 147

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UBISOFT ANNUAL REPORT 2009
fI n a n c I a l s t a t e m e n t s 02
Employee benets
Post-employment obligations
Ubisoft participates in pension, medical and termination benet plans in accordance with the laws and practices of each country.
These benets can vary depending on a range of factors, including seniority, salary and payments to compulsory general plans.
These plans may be either dened contribution plans or dened benet plans:
• In dened contribution plans, the pension supplement is determined by the total capital that the employee and the Company have
paid into external funds. The expenses correspond to contributions paid during the period. The Group has no subsequent obligations
to its employees. For Ubisoft, this generally involves public retirement plans and specic dened-contribution plans.
• In dened benet plans, the employee receives a xed pension benet from the Group, determined on the basis of several factors,
including age, length of service and compensation level. Within the Group, such plans are used in France, Italy and Japan.
The employer’s future obligations are measured on the basis of an actuarial calculation called the “projected unit credit method,”
in accordance with each plan’s operating procedures and the information provided by each country. This method involves determining
the value of likely discounted future benets of each employee at the time of his/her retirement. Actuarial differences are recorded
in prot and loss.
Personal training right (DIF)
Full-time French employees are entitled to between 20 and 21 hours of training each year, depending on the bargaining agreements
applicable within each company. The rights acquired each year may be accrued for up to six years. Total of training acquired amount
to 47,744 hours and are recognized as off-balance-sheet commitments.
Share-based payments
Stock option plans provide additional incentive for employees to improve the Group's performances by allowing them to purchase
a stake in the company (stock options, free shares, group savings plan).
In accordance with IFRS 2, share-based payments are recognised as staff expenses offsetting an increase in equity, at the fair value
of the instruments attached. This expense is spread over the vesting period, assuming presence on the vesting date and possibly
performance conditions attached.
Ubisoft uses a binomial model to estimate the value of allocated instruments. This method is based on assumptions updated
on valuation date, such as estimated volatility on the security concerned, a risk-free discount rate, the estimated payout ratio and
the likelihood of staff remaining in the Group until they can exercise their rights:
• Stock option plans: the compensation is recognised in income over the vesting period; however, the straight-line method is not
used, given the vesting terms set out in the various Ubisoft plan regulations;
• Group employee savings plan: the accounting expense is equal to the discount granted to employees, i.e., the difference between
the share subscription price and the share price at the date of the grant. This expense is recognised immediately on the plan
subscription date;
• Bonus share grants: the cost of this compensation is recognised in income over the vesting period, allowing for the vesting
terms.
The dilutive effect of stock option plans and bonus share grants when the unwinding of the instrument involves the issue of Ubisoft
shares and the vesting period is in progress, is reected in the calculation of diluted earnings per share.