TomTom 2009 Annual Report Download - page 80

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78 / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OF TOMTOM NV
21. SHAREHOLDERS’ EQUITY
2009 2009 2008 2008
(€ in (€ in
No. thousands) No. thousands)
Authorised:
Ordinary shares 600,000,000 120,000 333,000,000 66,600
Preferred shares 300,000,000 60,000 166,500,000 33,300
900,000,000 180,000 499,500,000 99,900
Issued and fully paid:
Ordinary shares 221,718,074 44,344 123,316,000 24,663
All shares have a par value of €0.20 per share (2008: €0.20 per share). For rights, restrictions and other
conditions attached to ordinary and preference shares, reference is made to Corporate Governance section in the
Annual Report.
In 2009, 1,534,787 shares were issued following the exercise of share options by employees (2008: 1,530,689).
Offering of ordinary shares – July 2009
On 17 July 2009 TomTom successfully closed and settled a rights issue which raised €359 million. On 2 July
TomTom had raised €71 million through a private placement via an issue of shares. In the private placement
Janivo Holding BV, Cyrte Investments BV and Alain De Taeye agreed to subscribe for 11.6 million ordinary shares
at a price of €6.12. In the rights offering 85.3 million ordinary shares were offered in a 5 for 8 rights offering.
The offer shares had a nominal value of €0.20 each and were offered to shareholders at €4.21 each. The gross
proceeds of the offering and private placement together were €430 million.
Our reserves are freely distributable except for €34.3 million of legal reserves. Note 6 in our company financial
statements provides an overview of our non-distributable reserves.
Protection mechanism
The Corporate Governance section of this annual report provides a detailed description regarding the use of
Stichting Continüiteit TomTom (“the Foundation”) as a protection measure against hostile takeovers.
Management is of the opinion that the call option does not represent a significant value as meant in IAS 1,
paragraph 31 due to the fact that the likelihood that the call option will be exercised is very remote. In the remote
event that the call option is exercised, the B preference shares which are issued are intended to be cancelled
shortly after issuance. The option is therefore not accounted for in the annual accounts nor is any additional
information as meant by IAS 32 and 39 provided.
22. SHARE-BASED COMPENSATION
There are a number of share-based compensation plans for TomTom 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.
In July 2009 TomTom finalised a rights issue in which shares were issued at €4.21 and every shareholder received
5 rights for every 8 shares they held. As a result of this rights issue the holdings of TomTom option and performance
share holders were diluted. TomTom agreed to compensate this group via a standard and generally accepted
formula; the Liffe formula. The Liffe formula is defined by NYSE Liffe, a global derivatives business of the NYSE
Euronext group. This formula has the effect of preserving the existing rights of the option holders. No additional
expense arises due to the application of the formula. We did not revalue our existing share option models as the
clear intention was only to preserve the value of the options that shareholders had before the rights issue.
Share option plan
The group has adopted a share option plan for members of management and eligible employees. Under the
scheme, the Supervisory Board granted options to members of the Management Board to subscribe for shares.
The Management Board granted options to eligible employees to subscribe for shares.