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21. Shareholders' equity
2013 2012
No. (€ in thousands) No. (€ in thousands)
AUTHORISED:
Ordinary shares 600,000,000 120,000 600,000,000 120,000
Preferred shares 300,000,000 60,000 300,000,000 60,000
900,000,000 180,000 900,000,000 180,000
ISSUED AND FULLY PAID:
Ordinary shares 222,176,212 44,435 221,895,012 44,379
All shares have a par value of €0.20 per share (2012: €0.20 per share). Further information on the rights, restrictions and other conditions
attached to ordinary and preferred shares is provided in the Corporate Governance section in the annual report.
In 2013, 281,200 shares were issued following the exercise of stock options by employees (2012: nil).
Our reserves are freely distributable except for €130.6 million of legal reserves (2012: €110.0 million). Note F - Other reserves in the company
financial statements provides an overview of the non-distributable reserves.
Protection mechanism
The Corporate Governance section of this annual report provides a detailed description regarding the use of Foundation Continuity TomTom
as a protection measure.
Management is of the opinion that the Call Option as described in the Corporate Governance section 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 remote. In the remote event that
the Call Option is exercised, the B preferred shares that 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 in 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
management and 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.
Stock option plans
The group has adopted stock option plans for members of management and eligible employees. Under the schemes, the General Meeting
has granted options to members of the Management Board to subscribe for shares. The Management Board in its turn has granted options
to eligible employees.
(€ in thousands) 2013 2012
Opening balance 48,818 61,090
Stock compensation expense 4,196 5,514
Transfer to retained earnings –23,426 –17,786
Stock options excercised –576 0
CLOSING BALANCE 29,012 48,818
The group has two option plans: 2005 stock option plan and 2009 stock option plan. The stock option plans qualifiy as 'Equity-settled share-
based payment plans'. The options granted in 2007 under the 2005 stock option plan as well those granted from 2011 onwards under the
2009 plan will vest after three years (cliff vesting) while the options granted in 2009 and 2010 vest in three equal annual portions, the first
Notes to the Consolidated Financial Statements / Continued
ANNUAL REPORT AND ACCOUNTS 2013 / 69