Document:

EX-4.5

 

Exhibit 4.5

	 	 	 
	

	 	
COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE

S T O C K O P T I O N P L A N

MAY 11, 2006

REGULATIONS

 

 

 2

CONTENTS

	 	 	 
	I.
	 	The stock option plan
	 
	 	 
	II.
	 	The price of the option
	 
	 	 
	III.
	 	Vesting period and exercise period
	 
	 	 
	IV.
	 	Obligation to keep the stocks
	 
	 	 
	V.
	 	Conditions of Employment
	 
	 	 
	VI.
	 	Conditions of exercise
	 
	 	 
	VII.
	 	Suspension Period
	 
	 	 
	VIII.
	 	Quotation of the new stocks
	 
	 	 
	IX.
	 	Order for sale
	 
	 	 
	X.
	 	Financial advantages of the stock option plan
	 
	 	 
	 
	 	• gain on the purchase price
	 
	 	• gain on the sale price
	 
	 	 
	XI.
	 	Taxation of the advantages

 

 

 3

Exhibits:

Exhibit 1:

	 	–	 	Request for the irrevocable exercise of options (Form N°1);
	 
	 	–	 	Request for the irrevocable exercise of options and sale (Form N°2);
	 
	 	–	 	Authorization given to the BNP-PARIBAS Securities Services to deduct from the sale
proceeds an amount equal to the amount of the social security contributions (Form N°3);
	 
	 	–	 	Letter to be executed by US tax residents (Form N°4);
	 
	 	–	 	Undertaking to keep the shares under the registered form (Form N°5).

Exhibit 2:

	 	–	 	Request for the transfer of the shares to bearer form (Form N°1)
	 
	 	–	 	Request for the transfer of the shares to bearer form for immediate sale (Form N°2)

 

 

 4

I  — Definition of the stock option plan

French Company Law enables French companies to grant to all or part of their staff the right
to subscribe to stock options.

The General Meeting dated May 11, 2006 authorized the Board of Directors to issue stock options.

The Company took advantage of this possibility to put in place a new plan.

A stock option provides the right, applicable only on request from the beneficiary, to subscribe to
new shares, which are purchased at a predetermined price.

The Board of Directors of the Company designated you on May 11, 2006 as a beneficiary under this
plan and you have already received a letter informing you of the number of stock-options offered to
you and of the price at which you may subscribe them.

These regulations detail the various clauses, governing the stock option plan, as it concerns you.

II — The option price

The price of the option has been determined on the basis of the average opening market prices
listed at the twenty sessions of Euronext Paris preceding May 11, 2006. After rounding, this
amounts to €131.26

This unit price cannot be modified for the term of the validity of the options; it may only be
adjusted, according to the law, if the Company were to proceed with financial operations affecting
its capital. Adjustments affecting both the unit price and the number of shares under option will
however have no effect on the overall value of the option for each beneficiary.

Beneficiaries will be informed in good time of the new subscription price and the new number of
shares to which they are entitled to subscribe.

III — Vesting period and exercise period

III.1 – Vesting period

Options accrue rights by fourth every year during a four-year period starting from May 11, 2006.
All rights will be accrued as of May 12, 2010. The rights so accrued are definitively acquired and
may not be lost for any reason whatsoever, included in case of departure from the Group.

The accrued rights are calculated for each ended 12-month period.

As an example, a beneficiary of an option giving right to acquire 1000 shares who
would leave the Group in December 2006 will have no accrued rights and would not be
entitled to acquire any stock. In December 2007, he would be able to acquire 250
shares, the remaining 750 options being expired.

III.2 – Duration of the options

Allocation of the options was decided by the Board of Directors of the Company on May 11, 2006, so
beneficiaries will be able to exercise their options at any time up to and including May 10, 2014,
subject to accrued rights.

Options are exercised in one or several occasions for the accrued part on request from the
beneficiaries, who decide to do so in their own discretion, in function of their individual
financial

 

 

 5

resources and movements of the market price of CGG share, however subject always to insiders rules.

IV — Obligation to keep the stocks

IV.1 – Obligation to keep

During the first four years of the Plan, beneficiaries are committed to keep under the registered
form the shares they are allocated as a result of the exercise of their stock options from the
acquisition date until May 11, 2010 included.

As an example, a beneficiary who exercises his option on May 12, 2007would not be
entitled to sell or transfer his shares to the bearer form before May 12, 2010. A
beneficiary who exercises his option on May 12, 2010 would be free to sell the
shares on the same day.

IV.2 – Exceptions

However, the above obligation to keep shares under the registered form until May 11, 2010 included
will not apply in the following events:

	Ø	 	lay off or redundancy (corresponding to the French concept of “Licenciement Economique”);
	 
	Ø	 	death;
	 
	Ø	 	in the event of take over bid or public offer of exchange, the beneficiaries will not be obligated to keep the shares
acquired before or during the take over.

V — Conditions of employment

The option, which is herein granted, is strictly linked to your status of employee of the
Group.

However, the accrued rights will be maintained whatever the reason of departure from the Group. All
the terms and conditions of this Plan such as but not limited to the obligation to keep the shares
will remain applicable.

A beneficiary of an option giving right to acquire 1000 stocks who would leave the
Group in June 2008 will keep his right to acquire 500 stocks. A beneficiary who
would leave the Group in December 2006 will have no accrued rights and cannot
purchase any stocks.

Beneficiaries shall be deemed to have lost the status of employee of CGG or an affiliate (a company
in which CGG holds directly or indirectly at least 30% of the capital) on the date of termination
of the service contract, i.e. at the end of the required notice period, regardless the cause or the
author of the termination.

Exceptions

If a beneficiary ceases to be employee of the Group for one of the following reasons, the options
and the conditions of exercise will be treated as follows :

	Ø	 	Death: the heirs of a deceased beneficiary will be entitled to
exercise all or part of the option within a six month period from
the date of beneficiary’s death. At the end of this six month
period, the option will expire.

	Ø	 	Lay off (French concept of “licenciement
économique”): options may
be exercised entirely at any time from the date of the lay off
until May 10, 2014 without obligation to comply with the
obligation to keep the shares.

 

 

 6

	Ø	 	Retirement, early retirement (“pre retraite” as such term is
construed under French Law): beneficiaries will continue to
benefit from their options until May 10, 2014 but remain subject
to all the terms and conditions of the plan such as but not
limited to the vesting period and obligation to keep the shares.

	Ø	 	Affiliate leaving the Group : the beneficiaries, employees of such
affiliate, will continue to benefit from their options but remain
subject to all the terms and conditions of the plan such as but
not limited to the vesting period and accrual of rights or the
obligation to keep the shares.

As mentioned above, only death and redundancy (lay off) will allow the exercise of the option
without complying with the obligation to keep the shares; beneficiaries leaving the group for the
other reasons listed above will have to comply with such obligation.

Furthermore, in the case of a beneficiary leaving the Group under a mutual arrangement with the
employer, the Company may contemplate, on a case-by-case basis, maintaining the beneficiary’s right
to the stock options. Such pursuance of the rights will follow the rules applicable for a
retirement.

VI — Exercise of the option

VI.1 — In order to exercise an option, you should use the forms included in Exhibit 1 as

follows:

	 	1.	 	Request for the irrevocable exercise of options (Form N°1):

The original of this form (corresponding to an exercise of option financed by the beneficiary) must
be sent to the Company, Corporate Legal Affairs at CGG, Tour Maine Montparnasse, BP 191, 33 avenue
du Maine, 75755 Paris Cedex (Béatrice PLACE-FAGET/Corinne CHEVALLET), along with a check to the
order of BNP PARIBAS Securities Services for the full subscription price.

	 	2.	 	Request for the irrevocable exercise of options and sale (Form N°2)

This form (corresponding to an exercise of option financed directly on the proceeds of the sale of
the shares issued as a result of such exercise and sold immediately afterwards) can be sent to the
Company either at the address mentioned in paragraph 1, or by fax at the following number 33 1 64
47 34 29 or by e-mail at the following address
bplacefaget@cgg.com
or cchevallet@cgg.com.

	 	3.	 	Authorization given to the BNP-PARIBAS Securities Services to deduct from the sale
proceeds an amount equal to the amount of the social security contributions (Form N°3)

This form shall be sent to the Company (at the address or fax or e-mail addresses indicated in
paragraph 1 above) for any exercise of options before May 12, 2010.

	 	4.	 	Letter to be executed by US tax residents (Form N°4)

All US tax residents shall include with the form for the exercise of their options the letter
identified in Exhibit 1 as Form N°4.

Your shares will be issued as registered shares in your name. Shares will be registered in an
account opened with the Bank entrusted with the management of the registered shares (BNP-PARIBAS).

	 	5.	 	Undertaking to keep the shares under the registered form (Form N°5)

In the event the options are exercised before May 11, 2010 included, the beneficiary shall include
an undertaking to keep the stocks under the registered form with its exercise form.

 

 

 7

VI.2 — Within eight days from the date of receipt of the all documents listed in VI.1 above, CGG
will execute all formalities in order for you to acquire the status of CGG’s shareholder.

The option shall be deemed to be exercised on the date of receipt by CGG of the complete file,
provided however that conditions related to the Vesting Period and the Status of Employee are
fulfilled.

VII — Suspension period

VII.1 — Conditions

CGG’s Board of Directors or, upon delegation from the Board, the Chairman and CEO may suspend for a
period which shall not exceed three months, any exercise of option in case of:

	–	 	Financial operation requiring a prior and strict knowledge of the number of CGG’s stocks.
	 
	–	 	Adjustment affecting the unit price as provided by French Company law.

VII.2 — Notice

Within five (5) days from the Suspension decision of the Board of Directors or of the Chairman and
C.E.O., beneficiaries will be informed by internal memorandum and/or by e-mail, general or
individual:

	–	 	that a Suspension period has been instituted in accordance with point VII.1 above;
	 
	–	 	the duration of the Suspension.

If applicable, beneficiaries will be informed of the new subscription price and new number of stock
to which they are entitled to subscribe.

VII.3 — Transitory Period

To the extent possible, the beneficiaries will be allowed a reasonable time period between the
receipt of the above-mentioned notice and the entry into effect of the suspension period during
which they may exercise their options, in whole or in part.

Each beneficiary hereby expressly acknowledges that the allowed time period, if any, may be
extremely reduced if so required by the envisaged financial operations.

At the end of this transitory period, Beneficiaries shall not be entitled to exercise their options
until expiry of the Suspension Period.

VII.4 — Confidentiality

Beneficiaries undertake not to divulge any information related to the Suspension and the cause
thereof.

VIII — Listing of new shares

New CGG shares acquired under the stock option plan are freely transferable at any time,
except where the obligation to keep applies in accordance with paragraph IV above.

The new shares are issued with the right to dividend on 1st January of the year in progress.

However, there is no right to dividend with respect to profit from the previous financial year. For
this reason, two cases may be envisaged during the year of exercise:

 

 

 8

VIII.1 — The shares acquired are assimilated to existing shares

From the date on which dividend is paid or the date of the Annual Ordinary Meeting of Stockholders,
until 31 December of that year, the new shares will be listed on the regular line of Eurolist of
the Eurolist by Euronext at the same rate as existing shares (ISIN : FR0000120164).

VIII.2 — The shares acquired are not assimilated to existing shares

From 1 January until the date on which dividend is paid or, if no dividend is paid, until the date
of the Annual Ordinary Meeting of shareholders, the new shares will not be listed at the same rate
as existing shares, but on a separate line (separate index). After the date on which dividend is
paid or, if no dividend is paid, after the date of the Annual Ordinary Meeting of Shareholders, the
shares will be transferred to the regular line (ISIN : FR0000120164) and assimilated to existing
shares.

For example: The last Annual Ordinary Meeting of shareholders took place on May
11, 2006. All shares acquired by the exercise of stock options between January 1,
2006 and May 11, 2006 were listed on a separate line until May 11, 2006, at which
date they were transferred to Index 0000120164 and assimilated to existing shares.
On the other hand, shares acquired by the exercise of stock options between May
11, 2006 and December 31, 2006 were listed directly on the 0000120164 line.

Finally, it should be noted that non-assimilated new shares usually have a below par rating
compared with shares sold on the 0000120164 line (this is on account of low trading levels even
when no dividend is due from the preceding financial year).

IX — Order for sale

The order for (i) simply transferring the shares from registered form to bearer form for a
later sale (Exhibit 2 – Form N°1) or (ii) for transferring the shares from registered form
to bearer form for immediate sale (Exhibit 2 – Form N°2) shall be sent to:

	 	(i)	 	the Company (at the postal address or fax number of e-mail address indicated in
paragraph 1.4.2. in the event of such an order being given before May 12, 2010,
	 
	 	(ii)	 	directly to the Bank at the following fax number 33 1 55 77 95 33. after May 12,
2010.

In addition to indicating the number of shares to be sold, certain details may be given to the Bank
concerning the order for sale on the stock market:

	–	 	order at best. This order bears no instructions. It is carried out at the opening of the next
trading day of Euronext Paris (which is generally when the greatest number of stocks are
exchanged).

	–	 	order at a minimum price of. This order sets a minimum rate at which the seller agrees to
transfer his stocks. It will therefore be carried out only if the listed rate is equal or
superior to this minimum. CGG shares are listed continuously and there may be fairly
substantial differences between the rates applied to various transactions carried out during
the same session. Limited orders tend therefore to be more reliable than discretionary orders.
Such order shall remain valid until the end of the calendar month and shall thereafter be
renewed for the next month.

 

 

  9

X — The financial advantages of the stock option plan

In being associated with the expansion of the Group and the evolution of the CGG share market
price, beneficiaries who exercise their options can make profits in two ways when selling the
stocks:

	-	 	gain on the purchase price equal to the difference between the price listed on the Stock
Exchange the day the option is actually exercised and the subscription price of the option,
and ;

	-	 	gain on the sale price equal to the difference between the price at which the stocks are
sold and the price listed on the Stock Exchange the day the option is exercised.
	 
	 	 	Examples

	 	 	 	 	 
	 	 	Hypothesis
	(On the basis of a subscription price of €131 )
	 	 	 	 
	Stock subscription price (a)
	 	 	131	 
	Value on the Stock market of the CGG Stock on the date
of option exercise (b)
	 	 	155	 
	Gain on the purchase price (b — a)
	 	 	24	 
	Sale price (c)
	 	 	160	 
	Gain on the sale price (c — b)
	 	 	5	 

XI — Taxation of the advantages

The summary hereunder applies only to French tax residents who, as such, are subject to French
Tax legislation. General information may be provided to other residents, upon request, on the
relevant foreign tax rules. However, foreign beneficiaries should revert to their tax advisor.

XI.1 — Taxation on gains on the purchase price

Taxation on gains on the purchase price varies depending on whether or not the beneficiary sells
his shares before the end of a four-year period starting from the date of allocation of the option,
i.e. not before May 11, 2010 included and depending on the time period during which the beneficiary
continues to hold the shares.

It should be noted that if the shares are transferred from registered shares to bearer shares, they
are considered as sold.

• Failure to comply with the fiscal four-year period (in practice, pursuant to the obligation to
keep the shares imposed on each beneficiary by section IV, sale of shares during this four-year
period is only allowed in the cases specified in section IV.2).

In this case, the gain on the purchase price is considered as additional salary and as such is
subject to income tax. The gain is added to the revenues for the year during which the stocks are
sold and not for the year in which the option is exercised. However, after deductions applicable to
salaries, tax is spread according to the “quotient” system so as to take into account the length of
time for which the options have been held.

Furthermore, in this case, the gain on the purchase price will also be subject to all French social
security contributions (i.e. about 25 %).

 

 

 10

It is again noted that if, during the fiscal four-year period, the acquired shares are simply
transferred from registered shares to bearer shares, without being sold the gain is likewise
subject to income tax and social security contributions.

Exceptions:

As an exception, tax exemption on the gain on the purchase price applies if the shares are sold or
transferred from registered shares to bearer shares before the expiry of the fiscal four-year
period in the following cases:

	–	 	dismissal
	 
	–	 	retirement imposed by the employer
	 
	 	 	In the above two cases, the options must have been acquired by the
beneficiary at least 3 months before date of the event in question.
	 
	–	 	invalidity corresponding to classification in the second or third
category defined in Article 310 of the French “Code de la Sécurité
Sociale”.
	 
	–	 	death.

• Compliance with the fiscal four-year period and of the two-year period of holding

	Ø	 	The gain on the purchase price, up to 152 500€, is taxed at the
rate of 30% plus 11% with respect to social contributions (i.e.
41%).

	Ø	 	The gain on the purchase price above 152 500€ is taxed at the
rate of 40% plus 11% for social contributions (i.e. 51%).

The beneficiary may always decide, at his sole discretion, to be taxed on the basis of income tax.

This tax treatment may be optimized if the beneficiary keeps the shares acquired during a two-year
period, i.e. if he does not sell them before a two-year period from the date of acquisition.

Ø In that case, the gain on the purchase price up to €152 500
will be taxed at the rate of 16% plus 11% for social contributions
i.e. 26%.

Ø The part of the gain exceeding €152 500 will be taxed at the
rate of 30% plus 11% for social contributions (i.e. 41%).

This specific rule will apply only if the shares have been kept under the registered
form during at least a two-year period. This two-year period is to be computed from the
end of the fiscal four-year period.

In consequence thereof, if the stocks were subscribed 1 year before the end of the fiscal period, a
beneficiary must hold the stocks during a three-year period if he wants to optimize the taxation.

The above taxation will apply only if the total value of sales (including shares’ sales unrelated
to the present stock option plan) made by the beneficiary during the year of the sale exceeds the
threshold determined on an annual basis by the French Tax authorities (€15 000 for fiscal 2006).

The beneficiary may always decide, at his sole option, to be taxed on the basis of income tax.

XI.2 — Taxation on gains made on the sale of stocks

The gain made on the sale of shares is taxed at the regular rate for capital gains. The tax rate is
therefore 16.0% (for fiscal 2006) plus around 11% with respect to social security contributions, if
the total value of sales (including shares’ sales unrelated to the present stock option plan) made
by the beneficiary during the year of the sale or transfer exceeds the threshold determined on an
annual basis by the taxation authorities (€15 000 for fiscal 2006).

 

 

 11

XI.3- Declaration commitments

Company’s obligations

Each year, the Company has to provide tax authorities with a certificate including the name of
beneficiaries who have exercised options during the preceding year, the dates of the exercise,
the number of shares acquired and the subscription price.

Each year until the expiry of the fiscal five-year period during which shares are sold or
transferred from registered shares to bearer shares, the Company has to declare, dates of sale
or of transfer to bearer shares, date of attribution and the date of the option exercise, the
number of shares, the subscription price and the price listed on the Stock Exchange the day
the option is exercised.

Beneficiary’s obligation

The year during which the option is exercised, the beneficiary shall append to his tax
declaration the statement that will be communicated to him by the Bank.

The year during which the stocks are sold or are transferred from registered stocks to bearer
stocks before the expiry of the fiscal five-year period, the beneficiary will state on his tax
declaration :

	–	 	the difference between the share market price on the day the option is exercised and the
subscription price,

	–	 	the gain made on the sale of shares, equal to the difference
between the price at which the shares are sold and the market price of the share on the day the option is exercised, only if
the total annual value of stocks sales (including shares’ sales unrelated to the present stock
option plan) exceeds the annual threshold determined by the taxation authorities (€15 000
for fiscal 2006).

*

* *

 

 

 12

EXHIBITS

 

 

EXHIBIT N°1

FORMS FOR THE EXERCISE OF STOCK-OPTIONS

Form N°1 : Request for the irrevocable exercise of stock-options

Form N°2 : Request for the irrevocable exercise of stock-options and sale

Form N°3 : Authorization given to BN-PARIBAS Securities Services to deduct from the sale proceeds
an amount equal to the amount of the social security contributions

Form N°4 : Letter to be executed by US tax residents

Form N°5 : Undertaking to keep the shares under the registered form

 

 

EXHIBIT N°2

FORMS FOR THE TRANSFER OF THE SHARES TO BEARER FORM AND SALE

Form N°1 : Request for the transfer of the shares to bearer form

Form N°2 : Request for the transfer of the shares to bearer form for immediate saleEX-4.6

 

Exhibit 4.6

COMPAGNIE GÉNÉRALE DE GÉOPHYSIQUE-VERITAS

S T O C K O P T I O N P L A N

March 23, 2007

REGULATIONS

 

 

 2

CONTENTS

	 	 	 
	I.
	 	The stock option plan
	 
	 	 
	II.
	 	The price of the option
	 
	 	 
	III.
	 	Vesting period and exercise period
	 
	 	 
	IV.
	 	Obligation to keep the stocks
	 
	 	 
	V.
	 	Conditions of Employment
	 
	 	 
	VI.
	 	Conditions of exercise
	 
	 	 
	VII.
	 	Suspension Period
	 
	 	 
	VIII.
	 	Quotation of the new stocks
	 
	 	 
	IX.
	 	Order for sale
	 
	 	 
	X.
	 	Financial advantages of the stock option plan
	 
	 	 
	 
	 	• gain on the purchase price
	 
	 	• gain on the sale price
	 
	 	 
	XI.
	 	Taxation of the advantages

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]