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LONG-TERM INCENTIVE PLAN continued
Number of
conditional
awards
Expiry
date
Vesting period of conditional awards granted
Less than 1 year 36,490 2012
1 to 2 years 23,365 2013
2 to 5 years 17,960 2014
The conditional awards granted under the LTIP are considered equity-settled. The share-based payment expense is measured using the fair
value of the conditional award issued under the LTIP which was determined using the Monte Carlo option pricing model.
Grant 2011 2010 2009 2008 2007
Fair value assumptions
Share price on date of grant (Rand) 439.82 361.97 172.06 332.06 126.50
Annualised expected volatility (%) 46.55 45.00 51.66 38.95 37.20
Expected share option life (years) 3.00 3.00 3.00 3.00 3.00
Expected dividend yield (%) 5.25 6.94 10.28 5.81 2.65
Risk-free interest rate (%) 7.08 6.50 6.14 8.96 7.70
The risk-free interest rate for the period within the contractual term of the conditional awards is based on South African government bonds.
The historical volatility of the Kumba and, where applicable, the Kumba Resources share price is used in determining the expected volatility.
SHARE APPRECIATION RIGHTS SCHEME
Number
of rights
2008 award
Number
of rights
2007 award
Exercise
price range
Rand
Movement in the number of rights granted
Balance at beginning of year 210,524 104,987 124.27 – 332.06
Rights exercised (111,230) (43,377) 124.27 – 332.06
Rights forfeited (1,130) – –
Balance at 31 December 2011 98,164 61,610 124.27 – 332.06
Balance at beginning of year 215,894 252,501 124.27 – 332.06
Rights exercised* – (145,514) 124.27 – 267.61
Rights forfeited (5,370) (2,000) 124.27 – 332.06
Balance at 31 December 2010 210,524 104,987 124.27 – 332.06
* This relates to employees who are considered good leavers in terms of the share rules.
Exercise
price range
Rand
Number
of rights
Expiry
date
Vesting period of rights granted
2 to 5 years 124.27 – 332.06 61,610 2014
2 to 5 years 247.30 – 332.06 98,164 2015
The rights granted under the SARS are considered equity-settled. The share-based payment expense is measured using the fair value of the
rights issued under the SARS which was determined using the Black-Scholes option pricing model.
Annexures
Annual Financial Statements 2011
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