registration document France Telecom 2009 - Orange.com

20 CONSOLIDATED
financial information concerning the issuer’s assets and liabilities, financial position and profits and losses
STATEMENTS
The share-based payment expense for 2009 is booked against
equity, except for the cost relating to the employee liabilities
and the corresponding social contributions concerning the
international free share award plan (7 million euros), which
are recognized in the statement of fi nancial position under
employee benefi ts.
27.1 Free share award and similar
compensation plans
France Telecom S.A. – France Plan
In 2007, France Telecom granted a free share award plan for
employees of France Telecom S.A. and most of its majorityowned
French subsidiaries and covering 10.8 million shares.
Based on the accomplishment of performance criteria stipulated
by the plan and the number of benefi ciaries among the Group’s
employees as of April 25, 2009, the Group awarded 10.3 million
shares. These shares are subject to a lock-up period of
two years, that is until April 25, 2011.
The total cost of the plan is 192 million euros, including 10 million
euros booked in 2009 (against equity).
France Telecom S.A. – International Plan
In addition to the free share award plan in France, France
Telecom S.A. has set up an International free share award plan
in several countries covering 1.8 million shares, with the same
award conditions as those of the France Plan. The plan covers
approximately 45,000 employees and corporate offi cers of
foreign companies and groups belonging to the France Telecom
Group.
On March 3, 2009, the Board of Directors duly noted that
the performance criteria had been met, and the benefi ciaries
acquired the right to receive share awards as of December 4,
2009, in accordance with the plan regulations. The shares were
delivered at the beginning of 2010. These free shares are subject
to a lock-up period of two years, that is until December 4, 2011
(December 4, 2012 in Spain).
In countries where tax, employment or other regulations
prohibit the award of free shares, France Telecom has set up
alternative plans covering approximately 23,000 employees and
providing for the following benefi ts, subject to meeting the same
performance criteria:
■ either an amount of cash equivalent to the France Telecom
S.A. share price on December 4, 2009 ;
■ or, in the United Kingdom, the award of shares to a trust
that is in charge of redistributing them free of charge at the
request of the employees.
The fair value per unit of the equivalent cash payment is the
price of the France Telecom S.A. share on December 4, 2009,
that is, 17.52 euros.
The total cost of the plan (including the residual expense to
be recognized for the benefi ciaries in the United Kingdom),
is 51 million euros, of which 26 million euros booked in 2009
against:
■ equity (19 million);
■ employee benefi ts (liabilities and corresponding social
contributions) for the cash-settled portion of the plan
(7 million).
The estimated residual expense to be recognized until
December 4, 2011 for the benefi ciaries in the United Kingdom is
6 million euros.
Sonatel
In May 2009, Sonatel has set up a share award plan covering
0.3 million shares giving employees outright ownership of these
shares on their retirement date. This scheme is similar to a free
share award plan.
During the vesting period, the benefi ciaries are entitled to
receive the dividends coming from the shares awarded. The
shares may not be sold until the employee’s retirement date.
In 2009, the expense booked for this plan against equity
amounted to 3 million euros, based on an unit fair value of
160 euros. An additional expense of 40 million euros is to be
recognized over the residual vesting period. Based on the
projected retirement schedule, 50% of the additional charge is
to be recognized before the end of 2018.
ECMS
In 2007, ECMS granted a free share award plan, completed in
2008 by a supplementary tranche covering 0.5 million shares,
which will be acquired progressively over a period of 40 months.
The expense booked in 2009 against equity amounts to
1 million euros. An additional expense estimated at 0.1 million
euros is to be recognized over the remaining vesting period, that
is until August 22, 2010.
27.2 Employee Shareholding Plan
As the French State sold 130 million of France Telecom shares
in June 2007, employees and former employees of the France
Telecom Group were proposed France Telecom shares and they
acquired 14.4 million France Telecom shares in 2007 (to which
will be added a maximum of 0.6 million free shares offered by
the French State subject to a holding period of three years
applicable to the shares acquired under the transaction). As
no vesting period was necessary to acquire shares, the full
amount of the expense was recognized in 2007, for an amount
of 107 million euros.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM