TomTom 2008 Annual Report Download - page 70

Download and view the complete annual report

Please find page 70 of the 2008 TomTom annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

68 / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OF TOMTOM NV
21. SHARE-BASED COMPENSATION (continued)
Performance share plan
Share plan 2007 and 2008
The Group introduced performance share plans for employees, as the share option plans are being phased out.
Conditional awards of TomTom shares were made under the share-based incentive plans of 2007 and 2008. In
2008 all employees, except for Management Board members, were offered the choice of 100% vesting or the
original vesting criteria. The original vesting criteria can result in a vesting ranging from 0-150% of the conditional
award. The actual vesting percentage depends on the total shareholder return of TomTom NV compared to other
companies listed in the AEX index, and the EPS growth of TomTom NV. For the performance shares granted in
2007 and 2008, the measurement period is three years starting at 1 January 2007 and 1 January 2008 respectively.
The following table provides more information about the performance shares which were conditionally awarded
in 2007 and 2008.
Share plans 2008
Outstanding at the beginning of the year 185,100
Granted under 2008 plan 347,400
Exercised 0
Forfeited -50,300
Outstanding at the end of the year 482,200
Valuation assumptions
The fair value of the share options granted up until March 2007 was determined by the Black and Scholes model.
The Black and Scholes model contains the input variables, including the risk-free interest rate, volatility of the
underlying share price, exercise price and share price at the date of grant. The fair value calculated is allocated
on a straight-line basis over the three year vesting period, based on the Group’s estimate of equity instruments
that will eventually vest.
The fair value of the performance shares granted in 2008 was determined by a valuation model. The model
contains several input variables, including the underlying share price at reporting date and an expected leavers’
percentage. The fair value is calculated at each reporting period.
The input into the share option valuation model is as follows: 2007
Weighted average share price (euro) 30.80
Weighted average exercise price (euro) 30.91
Weighted average expected volatility 40%
Weighted average expected life 84 months
Weighted average risk-free rate 3.96%
Expected dividends Zero
Volatility is determined using industry benchmarking for listed peer group companies, as well as the historic
volatility of the TomTom NV stock. The share price on the date of grant for options granted after the IPO is
determined as the three-day average of the stock price, prior to the date of the grant.
The Black and Scholes option valuation model was developed for use in estimating the fair value of traded
options that have no vesting restrictions and are fully transferable. In addition, option valuation models require
the input of highly subjective assumptions, including the expected stock price volatility. The Group’s employee
stock options have characteristics significantly different from those of traded options, and changes in the
subjective input assumptions can materially affect the fair value estimate.
22. MINORITY INTERESTS
Movements in minority interests were as follows.
2008
Opening balance at 1 January 2007 0
Acquisition of subsidiaries15,096
Minority share in result of subsidiaries 537
Exchange result -669
Closing balance at 31 December 2008 4,964
1 On 1 June the Group acquired Tele Atlas. Tele Atlas has a number of subsidiaries, not all of which are wholly owned.