Stock options and subscription rights



 Issued capital

2014  

2015 

  in thousands of € Nominal value  Number of shares  Nominal value  Number of shares 
 1 As at 1 January 

 176 773

 60 063 8712

 176 914

 60 111 405

  Movements in the year         
     Issue of new shares

 141

 47 534

 43

 14 120

  As at 31 December 

 176 914

 60 111 405

 176 957

 60 125 525

Structure         
2.1  Classes of ordinary shares         
     Ordinary shares without par value 

 176 914

 60 111 405

 176 957

 60 125 525

2.2  Registered shares 

 

 1 722 615

 

 148 202

  Non-material shares 

 

 58 353 4323

 

 59 977 323

  Shares to be dematerialized 

 

 35 358

 

 -8

Authorized capital not issued 

 1525 176

 

 152 175

 

 

A total of 14 120 subscription rights were exercised under the Company's SOP1 and SOP 2005-2009 stock option plans in 2015, requiring the issue of a total of 14 120 new shares of the Company.

From the 4 275 010 treasury shares held as of 31 December 2014, the Company disposed of 26 300 shares in connection with stock option plans. No treasury shares were purchased or cancelled in 2015. As a result, the Company held an aggregate 4 248 710 treasury shares as of 31 December 2015.

Details of the stock option plans which showed an outstanding balance either at the balance sheet date or at the previous balance sheet date, are as follows:

Overview of SOP1 Stock Option Plan
       

 Number of subscripiton rights

   
Date
offered 
Date
granted 

Date of
issue of
supscription
rights

Exercise
price
(in €) 

Granted  Exercised  Forfeited 

Out-
standing 

First
exercise
period 

Last
exercise
period
 

12.07.2002   10.09.2002  25.09.2002

 15.825

106 152 105 432 720  22.05 -
30.06.2006
 22.05 -
15.06.2015
        106 152 105 432 720 -    


Overview of SOP2 Stock Option Plan

 

Number of subscripiton rights

            

Date  offered

Date  granted

  Exercise
price
(in €)

    Granted

Exercised Forfeited

Out-
  standing

First
exercise
period

Last
exercise
period

  21.12.2006  19.02.2007

 30.175

37 500 27 500 - 10 000 

 22.05-
30.06.2010

15.11-
15.12.2021
  20.12.2007  18.02.2008

 28.335

12 870 12 690 - 180 

22.05.-
30.06.2011

 15.11-
15.12.2017
  20.12.2007  18.02.2008

 28.335

30 630 11 310 - 19 320 

22.05.-
30.06.2011

 15.11-
15.12.2022
  18.12.2008  16.02.2009

 16.660

64 500 - - 64 500 

22.05.-
30.06.2012

 15.11-
15.12.2018
  17.12.2009  15.02.2010

 33.990

49 500 - - 49 500 

22.05.-
30.06.2013

 15.11-
15.12.2019
  195 000 51 500 - 143 500



Overview of SOP 2005-2009 Stock Option Plan

Number of subscripiton rights

Date
offered
Date
granted

Date of
issue of
supscription
rights

Exercise
price
(in €)

Granted Exercised Forfeited

Out-
standing

First
exercise
period

Last
exercise
period

22.12.2005  20.02.2006 22.03.2006

 23.795

190 698 180 567 15 10 116  22.05.-
 30.06.2009
15.11 -
15.12.2020
21.12.2006  19.02.2007  22.03.2007

 30.175

153 810 143 540 600 9 670 22.05.-
30.06.2010
 15.11 -
15.12.2021
20.12.2007  18.02.2008  22.04.2008

 28.335

14 100 2 100 9 900 2 100  22.05.-
30.06.2011
 15.11 -
15.12.2017
20.12.2007  18.02.2008  22.04.2008

 28.335

215 100 85 650 12 700 116 750  22.05.-
30.06.2011
 15.11 -
15.12.2022
18.12.2008  16.02.2009  20.10.2009

 16.660

288 150 123 750 19 500 144 900  22.05.-
30.06.2012
 15.11 -
15.12.2018
17.12.2009  15.02.2010 08.09.2010 33.990  225 450 52 500 172 950  22.05.-
30.06.2013
15.11 -
15.12.2019 
1 087 308 535 607 95 215 456 486

 

Overview of SOP 2010-2014 Stock Option Plan

                  

Number of subscripiton rights

Date offered

Date granted

Exercise
price
(in €)

Granted

Exercised Forfeited

Out-
standing

First
exercise
period

Last
exercise
period

16.12.2010 14.02.2011

 77.000

360 925 - 46 000 314 925

28.02 -
13.04.2014

Mid Nov. -
15.12.2020
22.12.2011  20.02.2012

25.140

287 800 26 300 2 600 285 900

 27.02 -
12.04.2015

 Mid Nov. -
 21.12.2021
20.12.2012 18.02.2013

 19.200

267 200 - 2 700 264 500

End Feb. -
10.04.2016

 Mid Nov. -
19.12.2022
29.03.2013  28.05.2013

 21.450

260 00 - - 260 000

 End Feb. -
09.04.2017

 Mid Feb. -
 28.03.2023
19.12.2013 17.02.2014

 25.380

373 450 - - 373 450

 End Feb. -
09.04.2017

 Mid Nov. -
18.12.2023
  18.12.2014  16.02.2015  26.055  349 810  -  -  349 810 End Feb. -
09.04.2018 
 Mid Feb. -
17.12.2024
1 899 185 26 300 51 300 1 821 585

   2014  2015
SOP1 Stock Option Plan  Number of
subscription
rights
Weighted average
exercise price
(in €) 
Number of
subscription
rights
Weighted average
exercise price
(in €)
 
Outstanding as at 1 January   14 2549  15.664 720  15.825
 Exercised during the year  -13 534  15.655  -720  15.825
 Outstanding as at 31 December     720  15.825 -  -

2014 2015
SOP2 Stock Option Plan     Number of
 options
Weighted average
exercise price
(in €)
    Number of
 options
Weighted average
exercise price
(in €)
Outstanding as at 1 January  143 500  25.166 143 500  25.166
Outstanding as at 31 December    143 500  25.166 143 500  25.166

2014 2015
SOP 2005-2009 Stock Option Plan Number of
subscription
rights
Weighted average
exercise price
(in €)
Number of
subscription
rights
Weighted average
exercise price
(in €)
Outstanding as at 1 January  523 401  26.068  489 386  26.720
Forfeited during the year  -15 23.795 -19 500 33.873
Exercised during the year -34 000 16.678 -13 400 16.660
Outstanding as at 31 December  489 386  26.720 456 486  26.710

 

2014 2015
SOP 2010-2014 Stock Option Plan     Number of
 options
Weighted average
exercise price
(in €)
    Number of
 options
Weighted average
exercise price
(in €)
Outstanding as at 1 January  1 160 625  38.640  1 498 075  34.413
Granted during the year 373 450 25.380 349 810 26.055
Exercised during the year  - - -26 300 25.140
Forfeited during the year -36 000  77.000 -  -
Outstanding as at 31 December  1 498 075  34.413 1 821 585  32.942


Weighted average remaining contractual life                                   
in years 

                 2014
 
                 2015
SOP1   0.5 -
SOP2  4.7  3.7
SOP 2005-2009  5.4 4.5
SOP 2010-2014  7.7  7.1

The weighted average share price at the date of exercise in 2015 was € 26.22 for the SOP1 subscription rights (2014: € 27.82), not applicable for the SOP2 options (2014: not applicable), € 26.36 for the SOP 2005-2009 subscription rights (2014: € 27.45) and € 27.09 for the SOP 2010-2014 options (2014: not applicable). The exercise price of the subscription rights and options is equal to the lower of (i) the average closing price of the Company’s share during the thirty days preceding the date of the offer, and (ii) the last closing price preceding the date of the offer. When subscription rights are exercised under the SOP1 or SOP 2005-2009 plan, equity is increased by the amount of the proceeds received. Under the terms of the SOP1 and SOP2 plans any subscription rights or options granted through 2004 were vested immediately.

Under the terms of the SOP 2010-2014 stock option plan, options to acquire existing Company shares have been offered to the members of the Bekaert Group Executive, the Senior Vice Presidents and senior executive personnel during the period 2010-2014. The grant dates of each offering were scheduled in the period 2011-2015. The exercise price of the SOP 2010-2014 options was determined in the same manner as in the previous plans. The vesting conditions of the SOP 2010-2014 grants, as well as of the SOP 2005-2009 grants and of the SOP2 grants beginning in 2006, are such that the subscription rights or options will be fully vested on 1 January of the fourth year after the date of the offer. In accordance with the Economic Recovery Act of 27 March 2009, the Bekaert Annual Report 2015 Financial Review 51 exercise period of the SOP2 options and SOP 2005-2009 subscription rights granted in 2006, 2007 and 2008 was extended by five years in favor of the persons who were plan beneficiaries and subject to Belgian income tax at the time such extension was offered. The incremental fair value granted as a result of this amounts to € 0.3 million.

The members of the Bekaert Group Executive, the senior management and a limited number of management staff members of the Company and a number of its subsidiaries received during 2015 Performance Share Units entitling the beneficiary to acquire Performance Shares subject to the conditions of the Performance Share Plan 2015-2017. These Performance Share Units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target was set by the Board of Directors, in line with the Company strategy.

The options granted under SOP2 and SOP 2010-2014, the subscription rights granted under SOP 2005-2009 and the performance shares granted under the Performance Shares Plan 2015-2017 are recognized at fair value at grant date in accordance with IFRS 2 (see note 6.13. ‘Retained earnings and other Group reserves’). The fair value of the options is determined using a binomial pricing model. Inputs and outcome of this option pricing model are detailed below: 



Option pricing model details 
Granted in
February 2014 
     Granted in
February 2015 
Granted in
December 20151 
Granted in
February 20162
 
Inputs to the model
  Share price at grant date (in €) 
 
27.32
 
25.65
 
27.25
 
27.25
  Exercise price (in €)   25.38  26.06 - 26.38
  Expected volatility   39%  39%  39%  39%
  Expected dividend yield   3.0%  3.0%  3.0%  3.0%
  Vesting period (years)   3  3  3  3
  Contractual life (years)   10  10  -  10
  Employee exit rate   3%  3%  3%  3%
  Risk-free interest rate   1.0%  0.05% -0.20%  0.05%
  Exercise factor   1.40  1.40 -  1.40
Outcome of the model         
  Fair value (in €) 


 7.44

1 Performance Share Plan 2015-2017
2 See note 7.6. ‘Events after the balance sheet date’.

The model allows for the effects of early exercise through an exercise factor. An exercise factor of 1.40 stands for the assumption that the beneficiaries exercise the options and the subscription rights after the vesting date when the share price exceeds the exercise price by 40% (on average).

During 2015, 349 810 options (2014: 373 450) were granted under SOP 2010-2014 at a fair value per unit of € 6.71 (2014: € 7.96). The Group has recorded an expense against equity of € 2.9 million (2014: € 2.8 million) based on a straight-line amortization over the vesting period of the fair value of options and subscription rights granted over the past three years.

An offer of 50 850 Performance Share Units was made on 17 December 2015 under the terms of the Performance Share Plan 2015-2017. The granted units represent a fair value of € 1.8 million.
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