42. Employee share participation plans
Employee stock option plan
In April 2003 the Kudelski Group set up a stock option plan for the members of the Board of Directors, the management and certain expert employees. The Board of Directors and executive management determined the modalities and the conditions governing the grant of options. The following options were granted:
| Year of grant | Number of options | Vesting | Maturity | Ratio | Exercise price |
|---|---|---|---|---|---|
| 2003 | 125 000 | 01.04.2006 | 01.04.2007 | 1:1 | 20 |
| 2003 | 125 000 | 01.04.2007 | 01.04.2008 | 1:1 | 20 |
| 2003 | 125 000 | 01.04.2008 | 01.04.2009 | 1:1 | 20 |
| 2005 | 1 000 | 01.04.2007 | 01.04.2008 | 1:1 | 20 |
| 2005 | 1 000 | 01.04.2008 | 01.04.2009 | 1:1 | 20 |
Changes in options held
The following table summarizes the changes in options held:
| Changes in options held | Options 2008 | Strike price in CHF 2008 | Options 2007 | Strike price in CHF 2007 |
|---|---|---|---|---|
| In circulation on January 1 | 145 072 | 20 | 274 245 | 20 |
| - of which exercisable | 32 980 | 20 | 40 199 | 20 |
| New rights issued | - | - | - | - |
| Rights exercised | - | 20 | -118 024 | 20 |
| Rights forfeited | -36 135 | 20 | -11 149 | 20 |
| In circulation on December 31 | 108 937 | 20 | 145 072 | 20 |
| - of which exercisable | 108 937 | 32 980 |
The expense charged against the income statement for the financial year 2008 amounts to kCHF 48 (2007: kCHF 245). The expense assumes a departure rate based on the fact that some beneficiaries will not be able to exercise.
Employee share purchase program (ESPP)
As of financial year 2004, the Group set up a plan to allow employees of certain Group companies to buy shares, giving them preferential conditions to buy Kudelski SA bearer shares. All such shares purchased and the additional shares and options obtained through this plan are subject to a three-year blocking period.
| Shares 2008 | Options 2008 | Shares 2007 | Options 2007 | |
|---|---|---|---|---|
| Shares underwritten by employees | 41 511 | - | 16 241 | - |
| Bonus shares and options from ESPP | 3 534 | 4 768 | 2 180 | 1 068 |
| Total employee share program | 45 045 | 4 768 | 18 421 | 1 068 |
| In CHF'000 | Shares 2008 | Options 2008 | Shares 2007 | Options 2007 |
| Amount paid by employee | 395 | - | 277 | - |
| Booked corporate charges (excluding social charges) | 93 | 13 | 109 | 8 |
| 488 | 13 | 386 | 8 |
Shares issued for employees
In 2008, 191 512 bearer shares of Kudelski SA (2007: 87 732) were given to employees for no consideration as part of their remuneration, of which 130 562 (2007: 0) include a seven-year blocking period, 0 include a five-year blocking period (2007: 55 000) and 39 720 include a three year blocking period (2007: 17 116). The fair value recognized for this equity based compensation is kCHF 2 099 (2007: kCHF 2 723) and was fully accrued in the prior year.