TomTom 2005 Annual Report Download - page 81

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81
18.฀Share฀options
The฀Company฀adopted฀a฀share฀option฀plan฀as฀an฀incentive฀for฀members฀of฀management฀and฀eligible฀employees.฀
Under฀the฀scheme,฀the฀Supervisory฀Board฀may฀grant฀options฀to฀members฀of฀management฀to฀subscribe฀for฀shares.฀
The฀Management฀Board฀may฀grant฀options฀to฀eligible฀employees฀to฀subscribe฀for฀shares.฀The฀purpose฀of฀the฀share฀option฀
plan฀is฀to฀align฀the฀interests฀of฀management฀and฀eligible฀employees฀with฀those฀of฀shareholders฀by฀providing฀additional฀
incentives฀to฀improve฀the฀Company’s฀performance฀on฀a฀long฀term฀basis.฀
Stock฀Compensation฀Reserve฀ 2004฀ 2005
(in฀

thousands)
Opening฀balance฀ 103฀ 2,614
Stock฀compensation฀expenses฀ 1,044฀ 5,238
Tax฀benefit฀ 1,467฀ 3,737
Closing฀balance฀ 2,614฀ 11,589
The฀tax฀benefit฀in฀2004฀and฀2005฀relates฀to฀the฀excess฀of฀the฀tax฀basis฀compared฀to฀the฀accounting฀basis฀for฀stock฀options฀
issued฀to฀employees.
Share฀option฀plan฀2003:
The฀compensation฀under฀the฀plan฀qualifies฀as฀“Equity-settled฀share-based฀payments”.฀The฀vesting฀period฀under฀the฀2003฀
share฀option฀plan฀is฀three฀years฀followed฀by฀an฀exercise฀period฀of฀two฀years.฀These฀terms฀result฀in฀options฀under฀the฀plan฀
that฀cannot฀be฀transferred,฀pledged฀or฀charged฀and฀may฀be฀exercised฀only฀by฀the฀option฀holder฀over฀a฀period฀of฀two฀years฀
starting฀three฀years฀after฀the฀date฀of฀the฀grant.฀Options฀expire฀five฀years฀after฀the฀date฀of฀grant.฀