TomTom 2005 Annual Report Download - page 81
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18.Shareoptions
TheCompanyadoptedashareoptionplanasanincentiveformembersofmanagementandeligibleemployees.
Underthescheme,theSupervisoryBoardmaygrantoptionstomembersofmanagementtosubscribeforshares.
TheManagementBoardmaygrantoptionstoeligibleemployeestosubscribeforshares.Thepurposeoftheshareoption
planistoaligntheinterestsofmanagementandeligibleemployeeswiththoseofshareholdersbyprovidingadditional
incentivestoimprovetheCompany’sperformanceonalongtermbasis.
StockCompensationReserve 2004 2005
(in
thousands)
Openingbalance 103 2,614
Stockcompensationexpenses 1,044 5,238
Taxbenefit 1,467 3,737
Closingbalance 2,614 11,589
Thetaxbenefitin2004and2005relatestotheexcessofthetaxbasiscomparedtotheaccountingbasisforstockoptions
issuedtoemployees.
Shareoptionplan2003:
Thecompensationundertheplanqualifiesas“Equity-settledshare-basedpayments”.Thevestingperiodunderthe2003
shareoptionplanisthreeyearsfollowedbyanexerciseperiodoftwoyears.Thesetermsresultinoptionsundertheplan
thatcannotbetransferred,pledgedorchargedandmaybeexercisedonlybytheoptionholderoveraperiodoftwoyears
startingthreeyearsafterthedateofthegrant.Optionsexpirefiveyearsafterthedateofgrant.