Annual report 2010 - plazacenters

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Contractual life
Grant date/employees entitled Number of options Vesting conditions of options
Option grant to key management at October 27, 2006 15,165,754 see 2 below seven years
Option grant to employees at October 27, 2006 2,596,996 see 2 below seven years
Total granted in 2006 17,762,250 see 2 below seven years
Total granted in 2007 1 1,726,701 see 2 below seven years
Total granted in 2008 1 1,423,890 see 2 below seven years
Total granted in 2009 1 1,168,336 Three years of service seven years
Total granted in 2010 1 2,789,000 Three years of service seven years
Total share options granted 24,870,177
1 2007 – 200,000 share options granted to key management. 2008 – 626,667 share options granted to key management. 2009 – 73,334 share options granted to key management.
2010 – 1,600,000 share options granted to key management.
2 Vesting conditions – refer to modification of employee share option paragraph below.
Weighted average
Weighted average
exercise price Number of exercise price Number of
2010 options 2009 options
GBP 2010 GBP 2009
Outstanding at the beginning of the year 0.53 26,255,482 0.52 30,115,208
Forfeited during the period – back to pool 0.52 (200,716) 0.50 (2,223,750)
Exercised during the year 0.52 (3,954,541) 0.52 (2,970,976)
Granted during the year 1.23 2,789,000 0.80 1,335,000
Outstanding at the end of the year 0.61 24,889,225 0.532 26,255,482
Exercisable at the end of the year 15,279,330 12,800,446
* The options outstanding at December 31, 2010 have an exercise price in the range of GBP 0.52 to GBP 1.64 (app. EUR 0.59 – EUR 1.85) and a weighted average remaining
contractual life of four years. The weighted average share price at the date of exercise for share options exercised in 2010 was GBP 1.41 (2009: GBP 1.32).
Modification of employee share option plan
On November 25, 2008 the Company’s general shareholders meeting and the Board of Directors approved to amend the exercise price
of all options granted more than one year prior to October 25, 2008 (“Record Date”) to the average closing price of the shares on the
London Stock Exchange during the 30-day period ending on November 25, 2008 (i.e., GBP 0.52 per option). In addition, the amendment
plan determined that all options that were not vested on the Record Date shall vest over a new three year period commencing on the
Record Date, in such way that each year following that date 1/3 (one third) of such Options shall be vested. Furthermore, the Option
Term was extended in additional two years to a total period of seven years, which starts at the date of grant by the Company’s Board
of Directors. The above mentioned 180% limit on the potential benefit from each option was changed to a cap of 324 pence per option.
The number of options which were modified under the amendment was 28,182,589. The incremental fair value granted (i.e: the increase
in fair value of the share options measured immediately before and after the modifications) as a result of the above mentioned
modifications was EUR 6.4 million which will be recognized over the vesting period or immediately for vested options. The immediate
effect of the modification on the profit or loss statement was an expense of EUR 1.8 million. Following the modification of the employee
share option plan, the contractual life of the options (seven years) is used for future grants and the assumed suboptimal exercise
multiple is three for management and 2.5 for Employees due to the cap of 324 pence.
Following the modification of the option plan, the maximum number of shares issuable upon exercise of all outstanding options as of
the end of the reporting period is 21,201,017. The estimated fair value of the services received is measured based on a binomial lattice
model using the following assumptions:
Plaza Centers N.V. Annual report 2010103