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DANONE
REGISTRATION DOCUMENT 2015
Corporate Governance
6.3 Compensation and benefits of corporate officers and governance bodies
257
Former stock-option plans
General principles and closure of the stock-option program
No stock-options have been granted since November 2009. Table 4
of the French Financial Markets Authority nomenclature concern-
ing disclosures in registration documents on the compensation of
corporate officers is therefore not applicable.
Until the end of 2009, only stock purchase options were granted
to eligible employees under stock-option plans (the Company had
not granted stock subscription options since 1997). These grants
concerned the same group of employees as those now receiving
Group performance shares.
In addition, the corporate officers must refrain from using hedging
instruments for stock options. To Danone's knowledge, no hedging
instruments have been used for stock options.
Characteristics
The exercise price of the options was the equivalent of the average
stock market price of DANONE shares during the 20 trading days
leading up to the Board of Directors' meeting held to grant them,
with no discount offered.
The termof the existing plans is eight years. With the last plan having
been approved in October 2009, Danone's stock-option programwill
remain in effect until October 2017. Since 2006, the options may
be exercised following a four-year period from the date of grant
(with the exception of the two plans granted in December 2007 and
April 2008, for which the respective vesting periods are two and
three years). However, the beneficiaries may exercise all or part of
the options granted to them early in the event of a successful public
offer targeting DANONE's shares.
In the event of voluntary departure, the options granted become
null and void.
Valuation and recognition in the consolidated financial
statements
Long-term variable compensation in the form of stock-options is
valued and accounted for in Danone's consolidated financial state-
ments pursuant to IFRS 2,
Share-based payment
(see Note 7.4 of the
Notes to the consolidated financial statements).
Principles related to executives' supplementary retirement plan
This retirement plan, introduced in 1976 as part of the government's
executive loyalty initiative, was closed to all new beneficiaries on
December 31, 2003. Approximately 125 Danone executives who
hold the status of senior executives are, under certain conditions
(in particular seniority and continuous employment conditions),
eligible for this defined benefit retirement plan. As a reminder,
in 2009, more than 210 executives were still covered by this plan.
This plan provides for the payment of an annuity based on seniority
and the amount of final salary, on the condition that the beneficiary is
still in Danone's employment at the time of retirement. The annuity:
•
is paid after deducting certain pensions corresponding:
• with respect to a first category of senior executives, to the
full amount of retirement benefits they acquired over the
course of their professional career; and
• with respect to a second category of senior executives, to the
full amount of retirement benefits they acquired as a result
of the implementation of the Company's non-contributory
supplementary retirement plan.
•
and may reach a maximum of 65% of final salaries.
In the event of departure from Danone before the age of 55 or in the
event of death before retirement, the employee loses all benefits
under this plan, it being specified that if the employee is laid off after
the age of 55, the plan benefits are preserved, subject to the bene-
ficiary not taking any salaried position in the future. This provision,
which is consistent with applicable French regulations, enables in
particular protecting all beneficiaries against the risks related to
a termination of employment occurring after the beneficiary has
reached the age of 55 but prior to reaching retirement age.
The current corporate officers, Mr. FranckRIBOUDandMr. Emmanuel
FABER, who joined Danone 34 and 18 years ago, respectively, are
eligible for this supplementary retirement plan (see section
Contracts,
plans and indemnities of the corporate officers
).
The amount provisioned as of December 31, 2015 in Danone con-
solidated financial statements under this plan represents Danone's
obligation for the payment of a life annuity calculated on the basis
of life expectancies derived from mortality tables (see Note 7.3 of
the Notes to the consolidated financial statements).
The AFEP-MEDEF Code recommends that the amount of the life
annuity paid to the corporate officers be capped at 45% of the basis
of calculation and stipulates that this cap does not apply to plans
already closed. This is the case for Danone insofar as the plan has
been closed to all new beneficiaries since December 31, 2003.