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VIVENDI UNIVERSAL
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GENERAL COUNSEL'S OFFICE
STOCK OPTIONS
PLAN REGULATIONS
OCTOBER 2001
PREAMBLE
DEFINITION OF A STOCK PURCHASE (OR SUBSCRIPTION) OPTION PLAN
A stock purchase (or subscription) option plan is an arrangement whereby Vivendi
Universal, S.A. (the "Company") allocates to certain salaried employees and/or
corporate officers of the Company and/or companies linked to it, the possibility
of purchasing (or subscribing) new or existing shares over a certain period of
time, at a price determined when the grant is made and which remains fixed
throughout this period (except for any adjustments described below).
Beneficiaries thereby receive an interest in the performance of the Company, as
measured by the stock exchange valuation of its share.
Any financial gain obtained from the exercise of the option rights and
subsequent sale of the shares may be subject to tax treatment specific to the
options and which depends on the beneficiary's place of residence for tax
purposes.
I. CONDITIONS OF GRANT AND OPTION CHARACTERISTICS
Number of shares subject to the option
Based upon authorisation of the General Shareholders Meeting, the Board
of Directors determines the number of options granted to each
beneficiary. This number is communicated to the beneficiary by letter.
As the options are irrevocable, this number and the price cannot be
changed during the option term, except in the event of the adjustments
set out below (see page 3). New options may be allocated only pursuant
to a further decision by the Board.
Particulars of the options
The grant of options is an irrevocable commitment made by the Company
to the beneficiaries, subject to the conditions set out below.
Except in the event of the beneficiary's death, the options are
non-transferable by the beneficiary in any manner and are not subject
to execution or attachment.
Options are exercised at the discretion of the beneficiary.
For U.S. based beneficiaries having been granted American Depository
Shares (ADS), the options granted (corresponding to ADS, or even to
ordinary shares) are considered to be "NSOs" (Non-Qualified Stock
Options), unless the grant letter specifies that the options are "ISOs"
(Incentive Stock Options).
Duration and exercise term of the options
The options are granted irrevocably for a term of 8 years.
The Board of Directors, or the President upon Board of Directors'
delegation, determines the grant terms and conditions and the date as
of which options may be vested and exercised. Any option not exercised
during the 8 year period shall be cancelled.
2
Exercise price
The exercise price set for purchase of shares by beneficiaries is
determined on the day when the options are granted by the Board of
Directors, subject to limitations imposed by law and by the
authorisation given by the Meeting of Shareholders.
For beneficiaries receiving options giving the right to ordinary shares
listed on the Paris Bourse, the exercise price is set in euros.
For U.S. based beneficiaries receiving options giving the right to ADS
listed on the New York Stock Exchange, the exercise price is set in
dollars.
Adjustments to the exercise price
By law, the exercise price may not be modified during the term of the
option.
However, should the Company engage during this term in certain
financial or corporate transactions affecting the capital stock, the
Board of Directors will adjust the price and the number of shares
corresponding to options not yet exercised in such a way as to keep
constant the total value of options allocated to each beneficiary. The
way such adjustments are calculated is prescribed by law. The Board of
Directors shall apply them as required.
The main transactions giving rise to such adjustments are as follows:
* capital increases in cash reserved for shareholders;
* capital increases through capitalisation of reserves, profits or
additional paid-in capital, and distribution of bonus shares;
* issues of convertible or exchangeable bonds reserved for
shareholders.
Other exercise price adjustments are provided for by law, in the case
of somewhat exceptional financial transactions (distribution of
reserves, capital reduction resulting from losses, etc.).
Neither the plan regulations nor the grant letter are to be construed
as giving the beneficiary any additional rights whatsoever under his or
her existing employment contract or result in the creation of any such
employment contract.
II. OPTION VESTING AND EXERCISE PROCEDURES
The options shall vest annually in 1/3 parts over each of three years
from grant (except for special conditions or in the event of a waiver).
They may be exercised (but the shares not immediately sold in the case
of French beneficiaries) as of the beginning of the third year of the
date of grant in the proportion of 2/3 of the total grant amount. As of
the beginning of the fourth year of the date of grant, up to 100% of
the options may be exercised.
3
With respect to French beneficiaries, this vesting of 1/3 parts does
not apply in the event of death, certain cases of disability (2nd and
3rd categories as defined by Article L.341.4 of the French Social
Security Code) or mandatory retirement. In these cases, the French
beneficiary (or his estate) may exercise 100% of the options granted.
In the event of departure for any reason whatsoever (with the exception
of death), the beneficiary may exercise, up to expiry of the option
term, only those options that were vested before such departure
(including any options acquired under a waiver), in accordance with the
option exercise procedures set out below. U.S. based employees who have
been formally notified that their services are no longer required under
an existing employment contract shall be understood to have separated
from employment as of the date they receive such notice.
In the event of a beneficiary's death, the law provides that his estate
may exercise his options within a period of six months following the
date of death, but this period may not have the effect of prolonging
the initial term of the options, if that term expires earlier.
In the event of the death of a U.S. based beneficiary having been
granted ADS, the beneficiary's estate, designated either by will or the
laws of intestacy, may exercise only such options that are vested as of
the date of death (including any options acquired under a waiver) at
any time or from time to time for the full option term.
In the event that a formal take-over bid is launched in respect of the
entire share capital of the Company all allocated options are
immediately treated as vested and exercisable, and the corresponding
shares will become freely negotiable.
The President may, in exceptional circumstances and with annual
communication to the Remuneration Committee, approve vesting and
exercise procedures that differ from those mentioned above.
Option exercise procedures
In order to exercise the options, non-U.S. based beneficiaries having
received options on ordinary shares must submit a written declaration
to the Company General Counsel's Office, accompanied by an option
exercise form (which also has the validity of a purchase order) and
delivering payment of the exercise price.
For this purpose, each beneficiary must complete and return to the
Company the form attached as Appendix 1. This form may be modified as
necessary at any time.
U.S. based beneficiaries having been granted ADS must complete and
return to the Company or its plan administrator the form provided in
Appendix 2 (cashless exercise) or Appendix 3 (exercise and purchase of
shares). These forms may be modified as necessary at any time.
Payment of the exercise price
The payment price may be paid by cheque, bank transfer or by any other
procedure put in place by the managing banking or financial institution
and approved by the Company.
4
Delivery of the securities
Each time options are exercised, non-U.S. based beneficiaries must
indicate on the option exercise form the administration method desired
for the acquired shares. It should be noted that the transfer of shares
and their registration on account may take some time (up to 8 days for
registration in an "administered" nominal account). Registration in a
"pure" registered account is entrusted to the Securities Department
mandated by the Company(1). Registration in an "administered"
registered account gives the beneficiary the possibility of choosing a
different administrator. Administration of "pure" registered accounts
is free of charge (no custody fees).
III. PARTICULARS OF SHARES PURCHASED
It is obligatory for the shares to be registered.
They give the right to receive dividends paid in the year in which they
are purchased, provided, however, that the options are exercised at
least five working days before the date of the Meeting of Shareholders
held to approve payment of such dividends.
Shares obtained by exercising options are negotiable immediately,
except in the case of beneficiaries who are French tax residents. The
latter may not sell shares corresponding to exercised options until
expiry of the beneficial holding period applicable to the plan under
French tax law, except for cases of derogation(2) (in particular those
set out in Article 91 ter of Appendix II of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Tax
Code).
IV. SENSITIVE PERIODS
Beneficiaries must comply with regulations applicable to the use of
privileged information.(3)
Under all circumstances, beneficiaries wishing to sell their shares
will be personally responsible for meeting their obligation to abstain
from such acts when they possess or may be presumed to possess, as a
result of their duties within the Company, non-public information
likely to have an influence on the market price of the shares.
In addition, beneficiaries may not sell shares acquired upon the
exercise of options within a period of 30 calendar days before and 1
day after meetings of the Board of Directors held to approve the annual
and semi-annual financial statements of the Company. This 30-day
mandatory hold period can be modified by the Company at its discretion
at any time and consistent with applicable law.
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(1) BNP. PARIBAS - GIS Emetteurs - Les ▇▇▇▇▇▇▇▇ ▇▇ ▇'▇▇▇▇▇ -
▇▇▇▇▇ ▇▇▇▇▇ cedex 09.
(2) This period currently runs for five years for options granted before April
27, 2000 and four years for options granted after April 27, 2000. These
timing restrictions are not applicable in the case of an explicit waiver
granted by the Board of Directors, or in the cases set out in Article 91
ter of Appendix II of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Tax Code, namely:
- dismissal or mandatory retirement of the holder, it being specified
that the options have to have been exercised at least three months
before the date of the event;
- disability of the holder, with inclusion in the second or third
disability category in the meaning of Article L.314.4 of the French
Social Security Code;
- death of the holder.
(3) Order dated 28 September 1967. Regulation N(degree)90-08 of the COB
(Commission des Operations de Bourse - French Stock Exchange Commission)
and rules of the U.S. Securities and Exchange Commission.
5
V. APPLICATION OF THE PRESENT REGULATIONS
Should any questions arise regarding the present Regulations and their
application, the General Counsel should be consulted. Any information
provided by the individual departments of the Company (General
Counsel's Office, Legal Department, Financial Department, Human
Resources Department) is limited to the communication of purely factual
information, and may not take the form of legal, financial or tax
advice in respect of which these departments may be held liable in any
manner whatsoever.
VI. CHANGES IN THE PLAN
At any time, by a decision of the Board of Directors, and following
consultation as required with the Compensation Committee, the Company
may change the provisions of the present plan. Any changes that do not
generally result in more favourable terms for beneficiaries are subject
to written agreement between each beneficiary and the Company.
VII. COMPLIANCE
For the purposes of U.S. based beneficiaries having been granted ADS,
shares shall not be issued pursuant to the exercise of an option,
unless the exercise of such option and the issuance and delivery of
such shares comply with all relevant provisions of law, in particular
the Securities Act of 1933, as amended, the Securities and Exchange Act
of 1934, the rules and regulations promulgated thereunder, applicable
U.S. laws concerning the administration of stock option plans under
state corporate and securities laws, and the requirements of any stock
exchange or quotation system upon which the shares may then be listed
or quoted.
VIII. LIABILITY OF THE COMPANY
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company to
be necessary to the lawful issuance of any shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue
such shares as to which such requisite authority shall not have been
obtained.
IX. APPLICABLE LAW
The plan is subject to French law (Articles L.225-177 and following of
the New Commercial Code and the Decree of March 23, 1967).
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APPENDICES
1. An option exercise form for ordinary shares.
2. A declaration (cashless exercise) for U.S. based beneficiaries having
been granted ADS.
3. A declaration (exercise and purchase of shares) for U.S. based
beneficiaries having been granted ADS.
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OPTION EXERCISE FORM FOR ORDINARY SHARES
OPTIONS TO PURCHASE
I, the undersigned,
Surname:..............
First name:...........
Residing at:..........
Born on:.............. At:..........
Tax filing country:
- in my capacity as beneficiary of options granted for..........
shares at the unit price of.......... euros by the Board of
Directors meeting of..........;
- being aware of the terms and conditions associated with these
options, as resulting from statutory and regulatory provisions,
and from decisions of the Meeting of Shareholders and of the Board
of Directors;
- declare that I exercise this option for the amount of ..........
euros, on the basis of the fixed share price of .......... euros
and for .......... shares.
- Consequently, I declare that I purchase these(a) .......... shares
outright, and I pay the sum of(a) .......... euros by the enclosed
cheque, payable to Vivendi Universal.
- I declare that I have read and understood the provisions of the
Plan Regulations, and that I am aware of the regulatory provisions
applicable to the use of privileged information.
- I declare that I will not sell shares acquired upon the exercise
of options within a period of 30 calendar days before and 1 day
after meetings of the Board of Directors held to approve the
annual and semi-annual financial statements of Vivendi Universal.
- I hereby request that the shares to which I am entitled be
credited to the following account, opened in my name:
- the "pure" Vivendi Universal registered account(b)
- the administered registered account N(degree) .......... with
.......... (French residents may only avail themselves of this
possibility after expiry of the beneficial holding period under
tax law, currently 5 years for options granted before April 27,
2000 and 4 years for options granted after April 27, 2000).
Completed at ........... on ............
Signature
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(a) Write out in full
(b) Delete where not applicable. The management of pure registered accounts has
been entrusted to B.N.P., GIS ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇'▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ Cedex 09.
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GENERAL SECRETARY'S OFFICE Appendix N(degree)2
VIVENDI UNIVERSAL
AUTHORIZATION AND NOTICE OF CASHLESS OPTION EXERCISE
FOR U.S. BASED BENEFICIARIES HAVING BEEN GRANTED ADS ONLY
Vivendi Universal
c/o Merrill ▇▇▇▇▇
World Financial Center - South Tower - 4th Floor
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
Date:
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NAME: SOC. SEC. #:
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(Print or type) Employee ID#:
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Address:
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EMPLOYER: OFFICE LOCATION:
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Phone #:
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PAYMENT BY: [ ] DIRECT DEPOSIT (WHEN AVAILABLE) [ ] CHECK
I hereby exercise the following option(s) granted to me at the prices stated in
the applicable option agreement as indicated below:
Date of Number
Option Grant Option Price of Shares
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Total (minimum 200 whole shares)
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[ ] I would like ▇▇▇▇▇▇▇ ▇▇▇▇▇ to contact me at the above phone number.
[ ] I would like ▇▇▇▇▇▇▇ ▇▇▇▇▇ to send me a confirmation at
fax number .
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In connection with the payment of the total option exercise price, I hereby
authorize ▇▇▇▇▇▇▇ ▇▇▇▇▇ to sell immediately after verification of vested options
on my behalf all of the American Depository Shares of Vivendi Universal which I
will acquire in connection with the exercise of the option(s) noted above. If I
have exercised options from multiple grant dates on this form, unless otherwise
specified by me, ▇▇▇▇▇▇▇ ▇▇▇▇▇ will first sell the shares from the earliest
expiring option grant. The shares acquired upon exercise of such options should
be sold on the New York Stock Exchange at (select from the following):
DOES THIS ORDER SUPERSEDE OR MODIFY AN OUTSTANDING ORDER WITH
▇▇▇▇▇▇▇ ▇▇▇▇▇? Yes [ ] No[ ]
NUMBER OF SHARES PRICE MERRILL ▇▇▇▇▇
---------------- ----- USE ONLY
[ ] Market price: MARKET PRICE [ ]
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[ ] Limit price (sell at or above): $ /SHARE
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I affirm that I will not sell shares acquired upon the exercise of options
within a period of 30 calendar days before and 1 day after meetings of the Board
of Directors held to approve the annual and semi-annual financial statements of
Vivendi Universal.
I understand that ▇▇▇▇▇▇▇ ▇▇▇▇▇ will only sell shares if the price to be
realized exceeds the option price. I hereby assign to Vivendi Universal the
amount of the proceeds of the sale of such American Depository Shares, and
direct and authorize ▇▇▇▇▇▇▇ ▇▇▇▇▇ to pay such amount directly to Vivendi
Universal. I understand that my employer will pay me the amount of the proceeds
of the sale of such common shares less the option exercise price(s), brokerage
commission, transaction fees and applicable Federal (28%), State, Local and FICA
withholding taxes as required by law; or applicable non-US taxes as required by
law. I have received a prospectus of Vivendi Universal relating to the American
Depository Shares issuable upon the exercise of my options.
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Signature of beneficiary
9
GENERAL SECRETARY'S OFFICE Appendix N(degree)3
VIVENDI UNIVERSAL
NOTICE OF OPTION EXERCISE AND STOCK PURCHASE
FOR U.S. BASED BENEFICIARIES HAVING BEEN GRANTED ADS ONLY
Vivendi Universal
North American Shared Services Center
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax : ▇-▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Gentlemen:
I herby irrevocably exercise the following option(s) granted to me at the prices
stated in the applicable option agreement as indicated below:
Date of Number
Option Grant Option Price of Shares
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Total
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In payment of the total option price, I enclose a check for $
____________________ payable to my employer for the purchase of
__________________ American Depository Shares of Vivendi Universal.
I understand that if this notice of option exercise is received by the Payroll
Manager of the North American Shared Services Center by 12:00 noon (Eastern
Time), the transaction will be processed on the same day, if a trading day. If
the authorization is received after 12:00 noon, the transaction will be
processed on the next trading day.
I understand that I will be mailed share certificates for the whole common
shares acquired within 5 business days. I further understand that the difference
between the option exercise price and the fair market value (on the date of
exercise) of the common shares acquired will be considered compensation realized
and will be reported to me on Form W-2 accordingly. I understand that I must pay
the applicable Federal (28 %), State, Local and FICA withholding taxes as
required by law; or applicable non-US taxes as required by law. I will forward,
within two business days, my check payable to my employer for the amount of
taxes to be determined by the payroll manager.
It is my intention that this letter shall constitute an agreement between
Vivendi Universal and me for the issue by it and the purchase by me of the
number of American Depository Shares stated at the respective prices indicated,
and that this agreement shall be binding upon us as of the date this letter is
received.
I affirm that I will not sell shares acquired upon the exercise of options
within a period of 30 calendar days before and 1 day after meetings of the Board
of Directors held to approve the annual and semi-annual financial statements of
Vivendi Universal.
I have received a prospectus of Vivendi Universal relating to the American
Depository Shares issuable upon the exercise of my options.
Very truly yours,
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Signature of Optionee
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Print or type name
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Date