Share-based Payments
35. The terms and conditions of grants are as follows:
| Number of | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| instruments | Contractual | |||||||||||
| Grant date / employees entitled | in thousands | Vesting conditions | life of option | |||||||||
| Options granted 2007 | 60.340 | 12/24/36 months service | 3 years | |||||||||
| Total | 60.340 | |||||||||||
All options are to be settled by physical delivery of shares. Options vesting in 12 months can be exercised three times during the contractual life, at the end of each 12 month period. Accordingly 24 month options can be exercised two times and the 36 month options only once at the end of the 36 month period.
The number and weighted average exercise price of share options is as follows in thousands:
| Weighted | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| average | Number | |||||||||||
| exercise price | of options | |||||||||||
| 2007 | 2007 | |||||||||||
| Granted during the year | 27,5 | 60.340 | ||||||||||
| Forfeited during the year | 27,5 | (9.070 ) | ||||||||||
| Outstanding at 31 December | 27,5 | 51.270 | ||||||||||
| Exercisable at 31 December | 0 | |||||||||||
The fair value of services received in return for share options granted based on the fair value of share options granted, measuring using a Black-Scholes model, with the following inputs:
| Granted | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | ||||||||||||
| Fair value at grant date, average 12, 24, and 36 months options, average | 5,85 | |||||||||||
| Share price | 27,5 | |||||||||||
| Exercise price | 27,5 | |||||||||||
| Expected volatility (weighted average volatility) | 29,0% | |||||||||||
| Option life (expected weighted average life) | 2 years | |||||||||||
| Expected dividends per share | ISK 1 | |||||||||||
| Risk-free interest rate (based on government bonds) | 11,7% | |||||||||||
Total recognised expenses for the year arising from share-based payment transactions amounted to ISK 168 million (2006: ISK 0 million) including forfeited options during the year and accrued social security expenses related to share-based payments.
