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Integrated Report 2016
ANNUAL FINANCIAL STATEMENTS
(continued)
A. GENERAL EMPLOYEE SHARE OPTION PLAN
Certain employees were entitled to join the general employee share option plan, based on merit. The offer price was determined in
accordance with the rules of the scheme.
Options vest as follows:
•
a third after three years;
•
a third after four years; and
•
a third after five years.
From January 2006, the option plan rules were changed from being an equity-settled scheme to a cash-settled scheme. Options under
the cash-settled scheme have been issued at least annually at cost by the Adcock Ingram Board of directors up to June 2014 when the
equity-settled scheme was re-introduced, and certain senior employees were granted options.
The following tables illustrates the number and weighted average offer prices (WAOP) of and movements in Adcock Ingram share options
during the year:
2016
2015
Original equity-settled (issued whilst part of Tiger Brands)
Number
WAOP
Number
WAOP
Outstanding at the beginning of the year
6 700
28,33
103 300
20,42
Exercised and paid in full
(6 700)
28,33
(96 600)
19,96
Outstanding at the end of the year
–
–
6 700
28,33
Exercisable at the end of the year
–
–
6 700
28,33
2016
2015
The weighted average share price at the date of exercise, for the options exercised:
R50,10
R46,98
Weighted average remaining contractual life for the share options outstanding at reporting date:
0 years
0,25 years
Range of offer prices for options outstanding at the end of the year:
–
R28,33
Loan relating to a former Adcock Ingram employee outstanding at reporting date:
–
R128 539
2016
2015
Adcock Ingram equity-settled
Number
WAOP
Number
WAOP
Outstanding at the beginning of the year
1 602 200
52,20
1 665 000
52,20
Granted during the year
1 899 800
41,94
233 000
52,20
Forfeited
(436 000)
41,94
(295 800)
52,20
Outstanding at the end of the year
3 066 000
46,64
1 602 200
52,20
Exercisable at the end of the year
–
–
–
–
2016
2015
Weighted average remaining contractual life for the share options outstanding at reporting date:
8.67 years
8.96 years
Offer price for options outstanding at the end of the year:
R41,94 – R52,20
R 52,20
Fair value of options granted during the year:
R18,80
R 15,13
Expense recognised for employee services received during the year (R million):
12,56
7,07
Share options are fair valued using a Black-Scholes model. The expected dividend yield was estimated using a two-year moving average of
the dividend yield at the grant date. An annualised standard deviation of the continuously compounded rates of return of the share was
used to determine volatility. The risk-free rate was based on a SA zero-coupon government bond with the appropriate expected lifetime
of the options.
ANNEXURE B – SHARE-BASED PAYMENT PLANS