|
The Group has applied the requirements of IFRS 2 (Share-based Payment) to all share-based payment programs granted after November 7, 2002 that were unvested as of January 1, 2005. The Group has three separate share-based payment programs in place: one share option program (2004B), one synthetic option program settled in cash (2006A and 2006 B) and one share reward program settled in shares. Share-based payments programs are valued at fair value on the grant date and recognized as an expense in the income statement during the vesting period with a corresponding adjustment to the equity or liability.
The following share-based incentive schemes are in place for senior and middle management and the Board (2006 program is not for non-executive Board members):
The 2004 Share Option Program
In the 2004 Share Option Program a total of 1 000 000 options were issued to 106 managers: 500 000 options exercisable between March 31, 2007 and March 31, 2009 at an exercise price of EUR 6.16 per share (2004A), and 500 000 options exercisable between March 31, 2008 and March 31, 2010 at a price of EUR 6.41 per share (2004B). The exercise price of 2004B option represents the weighted average share price in March 2006. The subscription price shall be reduced by the amount of dividends distributed after the subscription period for option rights has ended and before the commencement of the share subscription period. On March 31, 2009, the exercise period for options issued under the Share Option Program 2004A expired. The outstanding 2004B options represent 1.1% of the company’s outstanding shares.
The 2006 Synthetic Option Program
In the 2006 Synthetic Option Program a maximum of 1 000 000 options were issued to 116 managers: 500 000 options exercisable between March 31, 2009 and March 31, 2011 at an exercise price of EUR 6.44 per share (2006A), and 500 000 options exercisable between March 31, 2010 and March 31, 2012 at an exercise price of EUR 6.44 per share (2006B). Exercise price represents the weighted average share price during period January 1 –March 31, 2006. The subscription price shall be reduced by the amount of dividends distributed after the subscription period for option rights has ended and before the commencement of the share subscription period. The share-specific cash value will be determined in accordance with the end price on the test date (i.e. vesting date) or, as the case may be, on an additional test date. End price is the volume weighted average price of the share during the ten trading days before the test date. If at test date the difference between the exercise price and the end price (including the dividend adjustment) is positive, the reward will be paid. If the difference between the exercise price and end price on the test date (including the dividend adjustment) is negative, the end price will be determined again on an additional test date, which is the six months’, twelve months’, eighteen and twenty-four months’ months’ anniversary of the test date. If the difference between the exercise price and the end price is positive on any of the additional test dates, the reward will be paid and this incentive scheme shall automatically expire.
The 2009 Share-Based Incentive Plan
In March 2009, Rapala announced that its Board had approved a new share-based incentive plan (Plan) for the Group's key personnel. The aim of the Plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the Company, to commit the key personnel to the Company, and to offer them a competitive reward plan based on holding the Company shares. The Plan includes one earning period, which commenced on January 1, 2009 and will end on December 31, 2010. The potential reward from the Plan will be based on the Rapala's earnings per share (EPS) in 2010. The potential reward from the Plan will be paid as the Company's shares in 2011. The target group of the Plan consists of 50 key employees. The gross rewards to be paid on the basis of the Plan will correspond to the value of a maximum total of 200 000 Rapala shares. The grant date for the Plan was June 23, 2009.
Non-executive Board members have not participated in any share based remuneration programs granted after June 8, 2004.
No options have been granted in 2007-2009.
The expected volatility has been determined by using the historical volatility of the share price. Period very close to Initial Public Offering, in December 1998, has been excluded from the history, since it is not considered to be qualitative for volatility estimation purposes. The historical volatility is calculated based on the weighted average remaining life of the share options. The expected life of the option is based on historical data. The non-market criteria are not included in the fair value of the option but taken into account in the number of options that are assumed to vest.
When the stock options are exercised, the proceeds received, net of any transaction costs, are credited to share capital (nominal value) and share premium fund. No options have been exercised in 2008-2009.
For more detailed information, on movement in number of options and weighted average exercise prices, share-based payment recognition and input to the model, please see Annual Report 2009 pages 65-66.
|
|
|