Stock option plan
A stock option plan was resolved by the Management Board and approved by the Supervisory Board of the Company in the business year 2006/07. The vesting period ended June 30, 2008. Members of the Management Board (with the exception of the former member of the Management Board Dkfm. Dr. Claus J. Raidl, who retired in the business year 2010/11, and the new member of the Management Board Dipl.-Ing. Franz Rotter, who was appointed in the business year 2010/11) were granted a total of 900,000 options and executives were granted 3,309,795 options. The options and the right to exercise the options are not transferable. The options can be exercised if the participant is a current employee or officer of voestalpine AG or a Group company.
If the share closing price on the exercise date is at least 15% above the exercise price, each stock option plan participant is allowed to exercise 50% of his options. The exercise price is calculated as the average of the closing prices during the period from August 1, 2006, to September 30, 2006. The market value of these options at the time of grant was calculated by an independent expert using the Monte Carlo simulation.
The other 50% of the options may be exercised if the closing price of voestalpine shares is above the Dow-Jones EUROSTOXX 600 on the exercise date, using July 1, 2006, as the starting point for calculating relative performance. The market value of these options at the time of grant was calculated by an independent expert using the binomial method.
The market value of the options at the time of grant is EUR 5.26 per option and was recognized over a period of 22 months on a straight-line basis until the end of the vesting period. The following parameters were used for determining the value of the options at the time of grant:
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Strike price |
euros |
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29.78 |
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Share price at grant date |
euros |
|
30.16 |
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Expected volatility |
% |
|
28.90 |
|
Risk-free interest rate |
% |
|
3.60 |
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Dividend yield |
% |
|
4.00 |
Expected volatility was calculated using the historical volatilities of the last three years. Based on an expected early exercise of stock options as compared to normal options, early exercise after two or three years was assumed. The requirement that the relative performance of voestalpine shares must exceed that of the Dow Jones EUROSTOXX 600 index was included in the calculation by way of a 7% discount.
During the reporting period, the outstanding options developed as follows:
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|
|
2009/10 |
|
2010/11 |
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|
|
|
|
|
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Outstanding options as of April 1 |
|
3,855,330 |
|
3,855,330 |
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|
|
|
|
|
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Expired options |
|
0 |
|
–12,000 |
|
Exercised options |
|
0 |
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–1,188,083 |
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Outstanding options as of March 31 |
|
3,855,330 |
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2,655,247 |
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|
|
|
|
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Option exercises averaged a price of EUR 35.6 per option. In the business year 2010/11, the members of the Management Board of voestalpine AG did not exercise any options.
As the relative performance of voestalpine shares since July 1, 2006, has exceeded that of the Dow Jones EUROSTOXX 600, one of the two exercise requirements has been met as of the end of the reporting period. The intrinsic value of the stock options amounted to EUR 4.4 million at the end of the reporting period (March 31, 2010: EUR 0.3 million).