Accell Group has a restricted share plan and an option plan.
Restricted share plan
Accell Group has a restricted share plan whereby conditional shares can be granted to the members of the Board of Management and to directors of subsidiaries who contribute significantly to the result of Accell Group. Both share plans are share-based payments plans with vesting conditions. The grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. The conditions have been incorporated into the fair value at grant date by applying a discount to the valuation obtained.
The shares that have been conditionally granted comprise the following:
The fair value will be charged to the income statement according to the straight-line method spread over the period between the grant date and the time that the shares are made unconditional, whereby adjustment will be made for the expected number of shares to be distributed. After final award, a lock-up period of two years applies for members of the Board of Management and three years for directors of subsidiaries.
The company has an option scheme for the Board of Management. The Supervisory Board bases awards pursuant to the option scheme on the realization of the targets agreed with the Board of Management. The outstanding and granted option rights are explained and specified in note 6.17.5.
The fair value of the employee share options was measured using an option valuation model (Black-Scholes-Merton). Service and non-market performance conditions attached to the transactions were not taken into account in measuring fair value. The inputs used in the measurement of the fair values at the grant date of the equity-settled share-based payment plans were as follows:
|Expected volatility (weighted-average)||27.73%||24.27%|
|Expected life (weighted-average)||3.9||3.9|
|Risk-free interest rate (based on government bonds)||0.22%||0.71%|
Expected volatility was based on an evaluation of the historical volatility of the Accell Group N.V.’s share price, in particular over the historical period commensurate with the expected term. The expected term of the instruments is based on historical experience and general option holder behaviour.
The reconciliation to personnel expenses is as follows:
|€ x 1,000||€ x 1,000|
|Conditional shares management 2015||-||38|
|Conditional shares management 2016||48||48|
|Conditional shares management 2017||6||6|
|Conditional shares Board of Management 2016||-||31|
|Conditional shares Board of Management 2017||41||41|
|Conditional shares Board of Management 2018||89||-|
|Options Board of Management||8||18|
|Total expense recognized in personnel expenses||192||182|
In the event of the full exercise of the option entitlements granted to date and the vesting of the conditional shares the number of issued shares would increase by 0.2% (2018: 0.2%). According to company policy, the options and shares granted are not covered by the company’s purchase of its own shares. In the event of equity-settlement, new shares are issued by the company at the moment options are exercised.
The grant-date fair value of equity-settled share-based payment awards granted to employees is recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.