TomTom 2008 Annual Report Download - page 69

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/ 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OF TOMTOM NV
21. SHARE-BASED COMPENSATION
There are a number of share-based compensation plans for Group employees. The purpose of the share-based
compensation is to retain employees and align the interests of management and eligible employees with those of
shareholders, by providing additional incentives to improve the Group’s performance on a long-term basis.
Share option plan
The Group adopted a share option plan for members of management and eligible employees. Under the scheme,
the Supervisory Board granted options to members of management to subscribe for shares. The Management
Board granted options to eligible employees to subscribe for shares.
Stock compensation reserve
(€ in thousands) 2008 2007
Opening balance 58,765 32,364
Stock compensation expense 6,940 29,156
Tax benefit 5,847 4,083
Release to retained earnings 0-6,031
Share options exercised -2,083 -807
Closing balance 69,469 58,765
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.
Share option plan 2005
The compensation under the plan qualifies as “Equity-settled share-based payments”. The vesting period under
the 2005 share option plan is three years followed by an exercise period of four 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 four years, starting three years after the date of the grant. Options expire seven years after
the date of grant.
The options will be covered at the time of exercise by issuing new shares.
The following table summarises information about the stock options outstanding at 31 December 2008.
Number Exercise Weighted Number Weighted
outstanding price per average exercisable average
Year of grant at Dec 31 ‘08 share remaining life at Dec 31 ‘08 exercise price
2004 1,529,475 0.75-3.75 0.44 1,529,475 0.84
2005 2,902,492 26.44-28.82 3.77 2,902,492 27.92
2006 2,035,000 25.50-37.68 4.78 0 33.30
2007 30,000 30.91 5.19 0 30.91
A summary of the Group’s stock option plans and the movement during the years 2007 and 2008 is presented
below.
Weighted Weighted
average average
Option plans 2008 exercise price 2007 exercise price
Outstanding at the beginning of the year 9,557,648 21.02 10,293,512 19.74
Granted 0030,000 30.91
Exercised -1,530,689 3.75 -707,370 1.29
Forfeited -1,529,992 28.90 -58,494 27.85
Outstanding at the end of the year 6,496,967 23.23 9,557,648 21.02