Annual Report 2002 - Agfa

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Principal actuarial assumptions at balance sheet date (weighted averages)
Dec. 31, 2001 Dec. 31, 2002
18. Employee benefits
continued
Discount rate 5.9% 5.8%
Expected return on plan assets 7.7% 7.5%
Future salary increases 4.0% 3.8%
Discount rate and salary increases have been weighted by the defined benefit
obligation. Expected return on plan assets has been weighted by fair value
of plan assets.
B. Equity compensation benefits
1. Long Term Incentive Plan (tranche no. 1)
On November 10, 1999 the Group established a stock warrant plan (the Long Term
Incentive Plan – tranche no.1) for the members of the Board of Management of the
Company and of the “Vorstand” of Agfa-Gevaert AG and certain key managers.
‘One’ warrant gives the holder the right to subscribe to ‘one’ new ordinary share of
the Company. In total 581,100 warrants were issued and allocated to the
beneficiaries of the plan. Each beneficiary was entitled to receive 13 warrants for
each share in the Company which he/she has purchased and deposited as the Initial
investment. The warrants were offered free of charge for shares of the Initial
investment acquired at 22 Euros per share (or higher). For an Initial investment
lower than 22 Euros per share a price equal to 1/13 of the positive difference
between 22 Euros per share and the price effectively paid per share had to be paid.
In accordance with the program, the warrants are only exercisable as from January
1, 2003 until November 10, 2005, after which date they become null and void.
The exercise price of the warrants is equal to 22 Euros.
The following table summarizes information about the stock warrants outstanding
at December 31, 2002:
Warrants granted 581,100
Warrants forfeited during 2001 19,500
Warrants forfeited during 2002 78,000
Warrants outstanding at December 31, 2002 483,600
2. Long Term Incentive Plan (tranche no. 2)
On April 25, 2000 the Group established a stock option plan (the Long Term
Incentive Plan – tranche no. 2) for the members of the Board of Management of
the Company and executives employed at levels VII, VIII and IX of the Company or
at equivalent levels within the Group, designated thereto by the Board of
Management of the Company. “One” option gives the holder the right to buy “one”
ordinary share of the Company. In total 416,950 options were issued and allocated
to the beneficiaries of the plan. The options were offered free of charge.
In accordance with the program, the options are only exercisable as from January 1,
2004 until May 19, 2006, after which date they become null and void. The exercise
price of the options is equal to 22 Euros. The shares subject to the stock option plan
are covered by a binding agreement with an investment banker to deliver these
shares at a fixed price not in excess of the exercise price of the options.
Agfa annual report 2002
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