Tiscali 2009 Annual Report Download - page 134

133
31 December 2009
Book value Fair Value
(EUR 000)
Secured bank loans 590,623 458,533
Unsecured bank facility 30,743 32,463
Payables for financial leases 94,516 60,440
IRS fair value 9,527 9,527
Amounts owed to former VNL shareholders 71,275 71,275
The fair value of the financial instruments as indicated above was determined using the discounted cash
flow method and taking as reference the market interest rates, in addition to contract spreads (where
applicable).
Stock Options
Upon the proposal of the Board of Directors, on 3 May 2007 the shareholders’ meeting approved a stock
option plan in favour of the Chief Executive Officer and key managers of the Company and its Italian
subsidiaries, with the aim of aligning management’s interests with the creation of value for the Tiscali Group
and its shareholders, to encourage achievement of strategic objectives.
The plan provides for allocation:
• to the Chief Executive Officer, of 3,593,143 options for the purchase of the same amount of ordinary
shares in the Company, deriving from purchases of treasury shares which the Company bought on the
market in compliance with Article 2357 of the Italian Civil Code and based on the authorization of the
shareholders’ meeting. On 10 May 2007, the Board of Directors attributed all such stock options in a
single tranche to the Chief Executive Officer. Subsequently, after the resignation of the Chief Executive
Officer, Tommaso Pompei, on 28 February 2008, these options were considered entirely exercisable
according to the terms provided in the regulations. Pursuant to IFRS 2(28) this transaction should be
considered as advance maturity. On 1 October 2009, Tommaso Pompei waived all his rights to the
options. Thus, the company sold 260,000 treasury shares in several tranches, which had previously
been bought and restricted to the incentive plan;
• to the employees, of up to a maximum of 4,244,131 options for the subscription of the same amount
of newly-issued ordinary shares in the Company, deriving from a share capital increase reserved in
accordance with Article 2441(8) of the Italian Civil Code resolved by the shareholders’ meeting.
Thus the Board of Directors:
• on 28 June 2007 and 12 May 2008 attributed a total of 3,760,000 options to 26 managers (376,000
following the reverse split of shares). After the expiry of term of the options some of the beneficiaries,
there are currently 216,000 options (after reverse split) which can be exercised by managers, also in
several tranches, from 29 June 2010 to 28 December 2010 for the options assigned 28 June 2007 and
from 13 May 2011 to 12 November 2011 for the options assigned 12 May 2008 at an exercise price
of EUR 0.729 EUR for 173,000 options and EUR 0.827 for 43,000 options. The exercise price was
adjusted following the share capital increase of February 2008 and November 2009 and the reverse
split of September 2009;
• On 7 August 2008, the regulations of the Stock Option Plan was changed in order to confirm that Mr.
Cristofori would have the exercise his rights to the options despite that he is no longer employed by the
company.
Consolidated Financial Statements and Explanatory Notes