IC Companys – Annual Report 2008/09 0 - IC Companys A/S

Incentive-based compensation
With the purpose of building congruent interests
between shareholders, members of the Executive
Board and other executives and contribute to a joint
focus on meeting the Group targets, IC Companys
has implemented bonus and share-based incentive
compensation plans.
The incentive-based compensation plans for members
of the Executive Board and other executives
includes bonus and share-based incentive plans. In
accordance with the IC Companys corporate governance
guidelines, members of the Board of Directors
are not included in the incentive plans.
The members of the Executive Board and a number
of other executives are included in a bonus plan
where payments are based on the financial results
achieved in the employee’s own area of responsibility.
The bonus potential is in the range of 20 - 50% of
annual salary. The bonus plan is based on results
achieved in the individual financial year, which helps
ensure that the Group’s growth targets are met, as
the full bonus is only paid if the Group targets are
met.
Previously, the Group granted warrants to a number
of executives and executive employees. Details of
the plans are given in note 5 to the financial statements.
New stock option programme Executive Board
The Board of Directors has resolved to grant Chief
Executive Officer Niels Mikkelsen 30,000 stock options,
Chief Financial Officer Chris Bigler 10,000
stock options, Brand Executive Officer Anders Cleemann
10,000 stock options and Executive Sales
Director Peter Fabrin 10,000 stock options.
The stock options granted give admittance to,
against payment in cash, to buy a number of shares
equivalent to the number of stock options granted.
The shares may be acquired in immediate continuation
of the company’s Annual Report for 2009/10,
2010/11 or 2011/12. The stock option shall lapse
at the termination of employment with the Company.
The stock options were issued at an exercise price of
the highest stock price of either the closing price of
the Company’s share at OMX on 10 September
2009 or the average of the closing price of the five
previous trading days. A 5% interest per annum is
added, the first time 10 September 2009.
By the use of the Black & Scholes model and under
the assumption of an exercise price of DKK 131, a
IC Companys – Annual Report 2008/09
volatility of 43% and risk-free rate of return of 3.64%
annually, the market value of the stock options
granted to the Executive Board can be assessed to
DKK 1.7 million (based on the average of the closing
price of the five days before 10 September 2009).
The fair value constitutes 12.5% to 14.4% of the
fixed wages of the individual member of the Executive
Board. The fair value of the programme will be
recognised in the income statement over the term.
New stock option programme executive employees
Further, the Board of Directors resolved to grant
143.500 stock options to 32 Group executive employees.
The stock options granted give admittance to,
against cash payment, to buy a number of shares
equivalent to the stock options granted. The acquisition
may take place in immediate continuation of
the Company’s Annual Report for 2011/12,
2012/13 or 2013/14.
The stock options were issued at either an exercise
price of the highest stock price of the closing of the
Company’s share at OMX on 10 September 2009 or
the average of the closing prices of the five previous
trading days. A 5% interest per annum is added, the
first time 10 September 2009.
By the use of the Black & Scholes model and under
the assumption of an exercise price of DKK 144, a
volatility of 43% and risk-free rate of return of 3.64%
annually, the market value of the stock options can
be assessed to DKK 4.7 million (based on the average
of the closing price of the five days before 10
September 2009). The fair value constitutes 5.7% to
29.0% of the fixed wage of the individual employee.
The fair value of the programmes will be recognised
in the income statement over the term.
New stock option programme assumptions
The volatility of 43% applied was calculated on the
basis of daily observations in the period January
2003 to August 2008. As IC Companys over the time
has seen significant changes in markets and brands,
a significant period of time will include events that
do not give a true and fair view of the Group’s current
risk profile. A short period of time, however, will
be affected by non-recurring economic event to such
a degree that it does not provide a true and fair future-oriented
view of the Group.
Based on previous experiences, the point in time of
exercise is expected to occur in the mid of the exercise
period.
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