Making people successful in a changing world - Annual Report 2012

Notes to Consolidated Financial Statements - as of December 30, 2001In millions, except share and per share amountsconvertible notes. The notes were redeemable for the principalamount together with accrued interest at the option of the noteholder only on November 25, 2001. Certain of the note holdersexercised their redemption right on their notes for the principalamount totalling EUR 3. The notes are convertible into Adeccoshares assuming a share price of CHF 107.24 and an exchange rateof CHF 1.6084 per Euro. The remaining balance of the notes isconvertible into 5,361,150 shares of Adecco SA.In connection with the 1999 Delphi acquisition, Adecco assumedDelphi’s outstanding USD 50 guaranteed senior note. Interest on thenote is payable semi-annually and the principal amount of the noteis repayable in six equal annual instalments commencing June 2002.Upon adoption of SFAS No. 133 as of January 1, 2001 “Accountingfor Derivative Instruments and Hedging Activities”, subordinatedundated notes of CHF 72 have been reclassified from debt to otherliabilities. (see Note 13).Under the terms of the various short and long-term creditagreements, Adecco is subject to covenants requiring, among otherthings, compliance with certain financial tests and ratios. As ofDecember 30, 2001, Adecco was in compliance with all financialcovenants.Payments of long-term debt are due as follows:Fiscal year2002 CHF 202003 222004 5502005 6542006 624Thereafter 197CHF 2,067Note 7 – Shareholders’ EquityAdecco’s shareholders’ equity consists of common shares andparticipation certificates, each with par value CHF 1.00.Participation certificates entitle the holder to receive dividends,other distributions and liquidation proceeds to the extent suchpayments are made to the holders of common stock. Participationcertificates are non-voting.Included in treasury stock are common shares of 129,558 and133,410 and participation certificates of 43,260 and 42,020 as ofDecember 30, 2001 and December 31, 2000 respectively. Treasurystock is generally reserved to support option exercises under stockoption plans.On May 2, 2001, the annual general meeting of shareholdersapproved the changes of authorised and conditional capital(authorised but not issued shares).As of December 30, 2001 19,000,000 common shares werereserved for issuance in case of special capital market transactions,such as acquisitions.Adecco had 7,082,612 and 5,267,760 common shares reserved forissuance of common shares to employees and directors upon theexercise of stock options as of December 30, 2001 and December 31,2000 respectively. Additionally, 5,399,880 and 7,000,000 commonshares were reserved for issuance for financial instruments, such asconvertible bonds as of December 30, 2001 and December 31, 2000.On May 2, 2001, the annual general meeting of shareholdersapproved the split of all common shares by 10 for 1 and allparticipation certificates by 2 for 1, effective May 14, 2001. The parvalue of common shares was reduced from CHF 10.00 to CHF 1.00and the par value of the participation certificates was reduced fromCHF 2.00 to CHF 1.00.Adecco may only pay dividends out of unappropriated retainedearnings disclosed in the annual financial statements of Adecco SA(“Holding Company”), prepared in accordance with Swiss law and asapproved at the annual general meeting of shareholders. TheseHolding Company financial statements present unappropriatedretained earnings of CHF 1,433 as of December 31, 2001.Note 8 – Stock Option PlansAs of December 30, 2001, Adecco had options outstanding relating toits common shares under several existing plans and plans assumedin the Olsten acquisition. Under these plans, options vest andbecome exercisable in instalments, generally on a ratable basis overtwo to five years beginning on the day of the grant or one year afterthe date of grant, and have a contractual life of three to ten years.Adecco applies APB Opinion No. 25 “Accounting for Stock Issuedto Employees” and related interpretations in accounting for its plans.No compensation cost has been recognised for its stock optionplans. Had compensation cost for Adecco’s stock-basedcompensation plans been determined based on the fair value atthe grant dates for awards under those plans consistent withSFAS No. 123, “Accounting for Stock-Based Compensation”, Adecco’snet loss and loss per share would have increased to the pro formaamounts indicated in the following table:17