Note 16: Share-based payments
The Company operates an equity-based compensation plan, whereby warrants are granted to directors, management and selected employees and non-employees. The warrants are accounted for as equity-settled share-based payment plans since the Company has no legal or constructive obligation to repurchase or settle the warrants in cash.
Each warrant gives the beneficiaries the right to subscribe to one common share of the Company. The warrants are granted for free and have an exercise price equal to the fair market price of the underlying shares at the date of the grant, as determined by the Board of Directors of the Company.
Movements in the number of warrants outstanding and their related weighted average exercise prices are as follows:
| 2017 | 2016 | |||||||||||||||
| Weighted average exercise price (in €) |
Number of warrants | Weighted average exercise price (in €) |
Number of warrants | |||||||||||||
|
Outstanding as of January 1st, |
20.92 | 571,444 | 11.61 | 319,330 | ||||||||||||
|
Granted |
30.37 | 367,100 | 33.10 | 343,550 | ||||||||||||
|
Forfeited |
28.50 | 31,817 | 34.20 | 91,436 | ||||||||||||
|
Exercised |
2.77 | 225,966 | — | — | ||||||||||||
|
Expired |
22.44 | 5,799 | — | — | ||||||||||||
|
At December 31, |
31.76 | 674,962 | 20.92 | 571,444 | ||||||||||||
There were 225,966 warrants exercised in 2017, of which 866 warrants issued in October 2010 and 225,100 warrants issued in May 2013.
Warrants outstanding at the end of the year have the following expiry date and exercise price:
|
Warrant plan issuance date |
Vesting date |
Expiry date |
Number of warrants outstanding as of 31 December, 2017 |
Number of warrants outstanding as of 31 December, 2016 |
Exercise price per share |
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|
05 May 2010 (warrants B) |
05 May 2010 | 05 May 2016 | — | 5,000 | 35.36 | |||||||||||
|
05 May 2010 (warrants C) |
05 May 2013 | 05 May 2016 | — | 799 | 22.44 | |||||||||||
|
29 Oct 2010 |
29 Oct 2013 | 31 Oct 2020 | 766 | 1,632 | 35.36 | |||||||||||
|
06 May 2013 |
06 May 2016 | 06 May 2023 | 7,000 | 232,100 | 2.64 | |||||||||||
|
05 May 2014 |
05 May 2017 | 05 May 2024 | 60,697 | 62,864 | 36.66 | |||||||||||
|
05 November 2015 |
05 November 2018 | 05 Nov 2025 | 253,065 | 269,049 | 32.86 | |||||||||||
|
08 December 2016 |
08 December 2019 | 08 Dec 2021 | 45,000 | — | ||||||||||||
|
29 June 2017 |
29 June 2020 | 31 July 2022 | 308,434 | — | ||||||||||||
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| 674,962 | 571,444 | |||||||||||||||
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Warrants issued on October 29, 2010
At the Extraordinary Shareholders Meeting of October 29, 2010, a plan of 79,500 warrants was approved. Warrants were offered to Company’s employees, non-employees and directors. Out of the 79,500 warrants offered, 61,050 warrants were accepted by the beneficiaries and 766 warrants are outstanding on the date hereof.
The 61,050 warrants were vested in equal tranches over a period of three years. The warrants become 100% vested after the third anniversary the issuance. The warrants that are vested can only be exercised at the end of the third calendar year following the issuance date, thus starting on January 1st, 2014. The exercise price amounts to €35.36. Warrants not exercised within 10 years after issue become null and void.
Warrants issued on May 6, 2013
At the Extraordinary Shareholders Meeting of May 6, 2013, a plan of 266,241 warrants was approved. Warrants were offered to Company’s employees and management team. Out of the 266,241 warrants offered, 253,150 warrants were accepted by the beneficiaries and 7,000 warrants are outstanding on the date hereof.
The 253,150 warrants were vested in equal tranches over a period of three years. The warrants become 100% vested after the third anniversary the issuance. The warrants that are vested can only be exercised at the end of the third calendar year following the issuance date, thus starting on January 1st, 2017. The exercise price amounts to €2.64. Warrants not exercised within 10 years after issue become null and void.
Warrants issued on May 5, 2014
At the Extraordinary Shareholders Meeting of May 5, 2014, a plan of 100,000 warrants was approved. Warrants were offered to Company’s new comers (employees, non-employees and directors) in five different tranches. Out of the warrants offered, 94,400 warrants were accepted by the beneficiaries and 60,697 warrants are outstanding on the date hereof.
The 100,000 warrants were vested in equal tranches over a period of three years. The warrants become 100% vested after the third anniversary the issuance. The warrants that are vested can only be exercised at the end of the third calendar year following the issuance date, thus starting on 1st of January 2018. The exercise price of the different tranches ranges from €33.49 to €45.05. Warrants not exercised within 10 years after issue become null and void.
Warrants issued on November 5, 2015
At the Extraordinary Shareholders Meeting of November 5, 2015, a plan of 466,000 warrants was approved. Warrants were offered to Company’s new comers (employees, non-employees and directors) in five different tranches. Out of the warrants offered, 343,550 warrants were accepted by the beneficiaries and 253,065 warrants are outstanding on the date hereof.
These warrants vest in equal tranches over a period of three years. The warrants become 100% vested after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end of the third calendar year following the issuance date, thus starting on 1st of January 2019. The exercise price of the different tranches ranges from €15.90 to €34.65. Warrants not exercised within 10 years after issue become null and void.
Warrants issued on December 8, 2016
On December 8, 2016, the Board of Directors issued a new plan of 100,000 warrants. An equivalent number of warrants were cancelled from the remaining pool of warrants of the plan of 5 November 2015. Warrants were offered to Company’s new comers (employees and non-employees) in two different tranches. Out of the warrants offered, 45,000 warrants were accepted by the beneficiaries and 45,000 warrants are outstanding on the date hereof.
These warrants will be vested in equal tranches over a period of three years. The warrants become 100% vested after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end of the third calendar year following the issuance date, thus starting on 1st of January 2020. The exercise price of the different tranches ranges from €17.60 to €36.81. Warrants not exercised within 5 years after issue become null and void.
Warrants issued on June 29, 2017
At the Extraordinary Shareholders Meeting of June 29, 2017, a plan of 520,000 warrants was approved. Warrants were offered in different tranches to beneficiaries (employees, non-employees and directors). Out of the warrants offered, 312,100 warrants were accepted by the beneficiaries and 308,434 warrants are outstanding on the date hereof.
These warrants will be vested in equal tranches over a period of three years. The warrants become 100% vested after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end of the third calendar year following the issuance date, thus starting on 1st of January 2021. The exercise price of the different tranches ranges from €31.34 to €47.22. Warrants not exercised within 5 years after issue become null and void.
The fair value of the warrants has been determined at grant date based on the Black-Scholes formula. The variables, used in this model, are:
| Warrants issued on | ||||||||||||||||||||
| 29 October 2010 |
31 January 2013 |
6 May 2013 |
5 May 2014 |
5 November 2015 |
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|
Number of warrants issued |
79,500 | 140,000 | 266,241 | 100,000 | 466,000 | |||||||||||||||
|
Number of warrants granted |
61,050 | 120,000 | 253,150 | 94,400 | 343,550 | |||||||||||||||
|
Number of warrants not fully vested as of 31 December 2017 |
— | — | — | 29,799 | 263,065 | |||||||||||||||
|
Average exercise price (in €) |
35.36 | 4.52 | 2.64 | 35.79 | 32.63 | |||||||||||||||
|
Expected share value volatility |
35.60 | % | 35.60 | % | 39.55 | % | 67.73 | % | 60.53 | % | ||||||||||
|
Risk-free interest rate |
3.21 | % | 2.30 | % | 2.06 | % | 1.09 | % | 0.26 | % | ||||||||||
|
Average fair value (in €) |
9.00 | 2.22 | 12.44 | 26.16 | 21.13 | |||||||||||||||
|
Weighted average remaining contractual life |
3.78 | 6.09 | 6.35 | 7.35 | 8.62 | |||||||||||||||
| Warrants issued on | ||||||||
| December 2016 | June 2017 |
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|
Number of warrants issued |
100,000 | 520,000 | ||||||
|
Number of warrants granted |
45,000 | 312,100 | ||||||
|
Number of warrants not fully vested as of 31 December 2017 |
35,000 | 308,434 | ||||||
|
Average exercise price (in €) |
24.39 | 31.53 | ||||||
|
Expected share value volatility |
61.03 | % | 60.27 | % | ||||
|
Risk-free interest rate |
-0.40 | % | -0.23 | % | ||||
|
Average fair value (in €) |
12.25 | 15.67 | ||||||
|
Weighted average remaining contractual life |
3.84 | 4.50 | ||||||
The total net expense recognised in the income statement for the outstanding warrants totals € 2,569k for 2017 (2016: € 2,847k).