to download Telecom Italia Annual Report 2011 - Company Reporting

Parameters used to determine fair value
Plans/Parameters
Exercise
price
(euro)
Current price /
Spot
(euro)
Volatility
Period
Expected
dividends
(euro)
Risk-free interest
rate
(1)
(2)
(3)
(4)
TOP 2008 Plan
Broad-based Employee
Share Ownership Plan
LTI Plan 2010-2015
equity component
LTI Plan 2011
equity component
Executive Management
LTI Plan 2011
equity component
(Top Management and
Selected Management)
1.95 Market value
Telecom Italia
and other TLC
companies at
4/15/2008
Telecom Italia
(33.02%) and
other TLC
companies
3 years 0.08 3.7485% at six
years
- 0.9668 36.233% 1 year 0.055 1.196% at 1 year
- 0.9219 33.4281% 5 years 0.055 first year 1.89% at 5 years
0.060 second
year
- 0.8044 n.a. 3 years 0.05 2.095% at 3 years
- 0.7298 n.a. 5 years 0.07 2.591% at 5 years
(1) In relation to the performance targets set in the Plan, consideration was given to the market prices of Telecom Italia
shares and, if necessary, of other shares of the leading companies in the telecommunications sector at the grant date.
(2) In relation to the performance targets set in the Plan, consideration was given to the volatility values of the Telecom Italia
share and, if necessary, of the shares of the leading companies in the telecommunications sector.
(3) Dividends were assumed to be constant over the life of the options on the basis of the latest dividends paid. For the
LTI Plan 2010 – 2015, LTI Plan 2011 and the Broad-based Employee Share Ownership Plan, the dividends were
estimated on the basis of the Bloomberg Agency’s data.
(4) The risk-free interest rate is considered the rate of government securities of the Federal Republic of Germany (the market
benchmark for transactions in euro) with expirations commensurate with the life of the option.
Telecom Italia S.p.A. Separate Financial Statements Note 36 – Equity compensation plans 425