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26. Share-based payments
Equity-settled share-based payments
On May 13, 2009, the Annual General Meeting approved
a new option plan for the Management Board, the 2009
AMG Option Plan (“2009 Plan”). Each option issued under
the 2009 Plan entitles the holder to acquire shares at a
future date at a price equal to the fair market value of the
share at the date on which the option was granted. One
half of the options granted to each option holder on any
date will vest on each of the third and fourth anniversaries
of the grant date. The vesting is subject to performance
conditions related to return on capital employed and
share price appreciation. The options expire on the tenth
anniversary of their grant date.
On June 26, 2007, the Management Board established
the AMG Option Plan (“2007 Plan”), which is eligible to
members of the Management Board, Supervisory Board,
employees, and consultants of the Company. Each option
issued under the plan entitles the holder to acquire shares
at a future date at a price equal to the fair market value of
the share at the date on which the option was granted. One
quarter of the options granted to each option holder on any
date will vest on each of the first four anniversaries of the
grant date. This vesting is not subject to any performance
conditions. The options expire on the tenth anniversary of
their grant date.
Total grants under the 2009 Plan during 2010 were 112,640
(2009: 182,927). During the years ended December 31,
2010 and 2009, there were no grants exercised, expired
or forfeited. All options under the 2009 Plan are equitysettled,
in accordance with IFRS 2, by award of options
Movements
118 Notes to Consolidated Financial Statements
to acquire ordinary shares or award of ordinary shares.
The fair value of these awards has been calculated at the
date of grant of the award. The fair value, adjusted for
an estimate of the number of awards that will eventually
vest, is expensed using a graded vesting methodology.
The fair value of the options granted was calculated using
a binomial expected life model. The assumptions used in
the calculation are set out below.
As detailed below during 2009, total grants under the
2007 Plan were 439,833. The options granted in 2009 had
special provisions, due to the fact that they were issued in
lieu of salary. These options vested on December 31, 2009
as that was the end of the salary replacement period.
During the year ended December 31, 2010, there were no
grants exercised (2009: nil) and grants expired or forfeited
were 143,750 (2009: 338,333). All options under the 2007
Plan are equity-settled, in accordance with IFRS 2, by
award of options to acquire ordinary shares or award of
ordinary shares. The fair value of these awards has been
calculated at the date of grant of the award. The fair value,
adjusted for an estimate of the number of awards that
will eventually vest, is expensed using a graded vesting
methodology. The fair value of the options granted was
calculated using a binomial expected life model. The
assumptions used in the calculation are set out below.
During the year ended December 31, 2010, AMG,
in conjunction with the AMG Option Plan, recorded
compensation from equity-settled share-based payment
transactions amounted to $6,362 (2009: $13,729) which is
included in selling and administrative expenses and cost
of goods sold in the income statement.
2010 2009
Number of options Weighted average Number of options Weighted average
In thousands of options
(in 000s) exercise price (in 1)
(in 000s) exercise price (in 1)
Outstanding at January 1 2,573 23.24 2,288 27.65
Granted during the year 113 7.99 623 8.54
Forfeited or expired during the year (144) 28.75 (338) 26.03
Exercised during the year – – – –
Outstanding at December 31 2,542 22.25 2,573 23.24
Exercisable at December 31 1,607 21.87 1,275 20.30
1,607,333 options were exercisable as of December 31, 2010. 1,274,833 options were exercisable as of December 31, 2009.
At December 31, 2010, the number of common shares subject to options outstanding and exercisable was as follows:
Outstanding Weighted average Weighted average Exercisable Weighted average
Price Range
options exercise price remaining life
options exercisable price
17.99 to 19.84 735,400 8.46 8.64 439,833 8.00
112.70 to 124.00 1,242,500 21.82 6.76 866,250 22.43
129.45 to 140.50 503,750 38.85 3.18 271,250 38.25
144.00 to 164.31 60,000 61.06 7.41 30,000 61.06