15 SHARE-BASED COMPENSATIONS
The Company operates an equity-based share-based compensation plan, whereby warrants are granted to directors, management and selected employees. The warrants are accounted for as equity-settled share-based compensation plans since the Company has no legal or constructive obligation to repurchase or settle the warrants in cash.
Each warrant gives the beneficiaries the right to subscribe to one common share of the Company. The warrants are granted for free and the exercise price is each time calculated based on either (i) the average closing rate of the underlying shares on Euronext Brussels during the period of thirty days preceding the date of the decision of the shareholders meeting (or the board of directors if the warrants have been issued in the context of the authorized capital), (ii) the average closing rate of the underlying shares on Euronext Brussels during a period of thirty days preceding the date of the grant, or (iii) the last closing rate of the underlying share preceding the date of the grant, as determined by the special proxyholder of the shareholders meeting of the Company (or of the Board of Directors of the Company if the warrants have been issued in the context of the authorized capital).
An overview of our stock option plans over the years 2015 through 2017 is set out below.
Warrants issued pursuant to a decision in principle of March 16, 2015 for certain employees and consultants
The Extraordinary General Meeting of Shareholders of March 16, 2015 has approved in principle the issuance of maximum of 850,000 warrants for the benefit of certain employees, certain consultants and certain directors of the Company. 442,801 warrants have been granted to and accepted by the relevant beneficiaries and therefore, 442,801 warrants have actually been issued.
The warrants each have an exercise price of €9.98.
The warrants vest over 4 years: 25% of the warrants vest after one year; after that date the remaining 75% become vested on a monthly basis (2.083% per month).
The warrants can only be exercised when vested and, in principle, as from the beginning of the fourth calendar year following the year in which the warrants have been granted (thus from January 1, 2019 through March 15, 2022). In the case of a termination of the employment agreement or the consultant agreement without cause, all vested warrants need to be exercised during the then running exercise period, or the next exercise period if such
termination does not take place during an exercise period. Vested warrants which have not been exercised in such exercise period, cannot be transferred to future exercise periods and will lapse. In the case of a termination of the employment agreement or the consultant agreement for cause, all warrants (whether or not vested) lapse.
All non-vested warrants lapse upon termination of the relevant employment agreement or consultant agreement. The term of the warrants is seven years as of the decision in principle to issue the warrants (i.e. March 16, 2015). Any warrants that have not been exercised within their term become null and void.
Warrants issued pursuant to a decision in principle of September 14, 2015 for certain employees and consultants
The Board Meeting of September 14, 2015 has approved in principle the issuance of maximum 290,000 warrants for the benefit of certain employees and for the benefit of an at time still to be appointed member of the management of the Company. 233,000 warrants have been granted to and accepted by the relevant beneficiaries and therefore 233,000 warrants have actually been issued.
The warrants each have an exercise price as set forth below:
| • | 150,000 warrants have an exercise price of €12.10; and |
| • | 83,000 warrants have an exercise price of €12.29. |
The warrants can only be exercised when vested and, in principle, as from the beginning of the fourth calendar year following the year in which the warrants have been granted (thus from January 1, 2019 through September 13, 2022). In the case of a termination of the employment agreement or the consultant agreement without cause, all vested warrants need to be exercised during the first fifteen days of the quarter in which the end of the employment agreement or, consultant agreement falls, even if such exercise period precedes the beginning of the fourth year following the calendar year in which the date of the grant lies. The tax consequences of such exercise will exclusively be borne by the relevant warrant holder. Vested warrants which have not been exercised in such exercise period cannot be transferred to future exercise periods and will lapse. In the case of a termination of the employment agreement or the consultant agreement for cause, all warrants (whether or not vested) lapse.
All non-vested warrants lapse upon termination of the relevant employment agreement or consultant agreement. The term of the warrants is seven years as of the decision in principle to issue the warrants (i.e. September 14,
2015). Any warrants that have not been exercised within their term become null and void.
Warrants issued pursuant to a decision in principle of February 24, 2016 for certain employees and consultants
The Board Meeting of February 24, 2016 has approved in principle the issuance of maximum 590,000 warrants for the benefit of certain employees and certain members of the management. 429,479 warrants have been granted to and accepted by the relevant beneficiaries and therefore 429,479 warrants been actually issued.
The warrants each have an exercise price of €12.02.
The warrants vest over 3 years: 28% of the warrants vest after one year; after that date the remaining 72% become vested on a quarterly basis (9% per quarter).
The warrants can only be exercised when vested and, in principle, as from the beginning of the fourth calendar year following the year in which the warrants have been granted (thus from January 1, 2020 to February 23, 2023). In the case of a termination of the employment agreement or the consultant agreement without cause, all vested warrants need to be exercised during the first fifteen days of the quarter in which the end of the employment agreement or consultant agreement falls, even if such exercise period precedes the beginning of the fourth year following the calendar year in which the date of the grant lies. The tax consequences of such exercise will exclusively be borne by the relevant warrant holder. Vested warrants which have not been exercised in such exercise period cannot be transferred to future
exercise periods and will lapse. In the case of a termination of the employment agreement or the consultant agreement for cause, all warrants (whether or not vested) lapse. All non-vested warrants lapse upon termination of the relevant employment agreement or consultant agreement. The term of the warrants is seven years as of the decision in principle to issue the warrants (i.e. February 24, 2016). Any warrants that have not been exercised within their term become null and void.
Warrants issued pursuant to a decision in principle of September 9, 2016 for certain employees and consultants
The Board Meeting of September 9, 2016 approved in principle the issuance of maximum 320,000 warrants for the benefit of certain employees and for the benefit of an at time still to be appointed member of the management. None of the warrants which have been granted to the beneficiaries, have been accepted and therefore no warrants have been actually issued under this stock option plan.
Warrants issued pursuant to a decision in principle of February 22, 2017 for certain employees and consultants
The Board Meeting of February 22, 2017 has approved in principle the issuance of maximum 740,000 warrants for the benefit of certain employees and certain members of the management. 527,061 warrants have been granted to and accepted by the relevant beneficiaries and therefore 527,061 warrants been actually issued.
The warrants each have an exercise price of €12.33.
The warrants vest over 3 years: 28% of the warrants vest after one year; after that date the remaining 72% become vested on a quarterly basis (9% per quarter).
The warrants can only be exercised when vested and, in principle, as from the beginning of the fourth calendar year following the year in which the warrants have been granted (thus from January 1, 2021 to February 21, 2024). In the case of a termination of the employment agreement or the consultant agreement without cause, all vested warrants need to be exercised during the first fifteen days of the quarter in which the end of the employment agreement or consultant agreement falls, even if such exercise period precedes the beginning of the fourth year following the calendar year in which the date of the grant lies. The tax consequences of such exercise will exclusively be borne by the relevant warrant holder. Vested warrants which have not been exercised in such exercise period cannot be transferred to future exercise periods and will lapse. In the case of a termination of the employment agreement or the consultant agreement for cause, all warrants (whether or not vested) lapse.
All non-vested warrants lapse upon termination of the relevant employment agreement or consultant agreement. The term of the warrants is seven years as of the decision in principle to issue the warrants (i.e. February 22, 2017). Any warrants that have not been exercised within their term become null and void.
Warrants issued pursuant to a decision in principle of September 20, 2017 for certain employees and consultants
The Board Meeting of September 20, 2017 has approved in principle the issuance of maximum 670,000 warrants for the benefit of certain employees and certain members of the management. 629,000 warrants have been granted to and accepted by the relevant beneficiaries and therefore warrants been actually issued.
The warrants each have an exercise price of €12.26; €12.96; €13.32; €14.53; €17.84; €19.78 and €23.36.
The warrants vest over 3 years: 28% of the warrants vest after one year; after that date the remaining 72% become vested on a quarterly basis (9% per quarter).
The warrants can only be exercised when vested and, in principle, as from the beginning of the fourth calendar year following the year in which the warrants have been granted (thus from January 1, 2021 to September 19, 2024). In the case of a termination of the employment agreement or the consultant agreement without cause, all vested warrants need to be exercised during the first fifteen days of the quarter in which the end of the employment agreement or consultant agreement falls, even if such exercise period precedes the beginning of the fourth year following the calendar year in which the date of the grant lies. The tax consequences of such exercise will exclusively be borne by the relevant warrant holder. Vested warrants which have not been exercised in such exercise period cannot be transferred to future exercise periods and will lapse. In the case of a termination of the employment agreement or the consultant agreement for cause, all warrants (whether or not vested) lapse.
All non-vested warrants lapse upon termination of the relevant employment agreement or consultant agreement. The term of the warrants is seven years as of the decision in principle to issue the warrants (i.e. September 20,
2017). Any warrants that have not been exercised within their term become null and void.
Extension of certain warrant plans
The General Shareholders Meeting of April 30, 2009 and the Board of Directors meeting of June 22, 2009 approved the five-year extension of certain warrant plans in accordance with Art. 583 of the Belgian Companies Code and in accordance with Art. 21 of the “Economische Herstelwet”.
Because of this extension, the fair value of the warrants has changed. The incremental fair value was calculated as the difference between the fair value with and without extension at the date of extension.
Overview of share-based compensation arrangements
|
Exercise price |
Fair value |
Number of warrants |
Outstanding warrants at December 31 |
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|
Warrant plan |
Expiry date |
(in €) | (in €) | granted | 2017 | 2016 | ||||||||||||||||
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Plan - July 13, 2006 |
July 12, 2018 | 2.00 | 1.26 | 875,000 | 210,000 | 560,000 | ||||||||||||||||
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Plan - December 29, 2006 |
December 28, 2018 | 2.80 | 1.76 | 67,500 | 5,000 | 9,500 | ||||||||||||||||
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Plan - June 14, 2007 |
June 13, 2019 | 2.80 | 1.80 | 212,500 | 0 | 0 | ||||||||||||||||
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Plan - October 12, 2007 |
October 11, 2017 | 7.00 | 3.78 | 10,713 | 0 | 3,517 | ||||||||||||||||
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Plan - Augustus 22, 2008 |
August 21, 2015 | 4.88 | 3.11 | 75,000 | 0 | 0 | ||||||||||||||||
|
Plan - Augustus 22, 2008 |
August 21, 2020 | 4.88 | 3.11 | 300,000 | 70,417 | 73,917 | ||||||||||||||||
|
Plan - September 29, 2009 |
September 28, 2016 | 6.99 | 5.25 | 205,400 | 0 | 0 | ||||||||||||||||
|
Plan - October 30, 2009 |
October 29, 2016 | 8.19 | 5.07 | 170,000 | 0 | 0 | ||||||||||||||||
|
Plan - December 3, 2010 |
December 2, 2017 | 8.24 | 4.49 | 85,500 | 0 | 25,250 | ||||||||||||||||
|
Plan - April 28, 2011 |
April 27, 2016/2018 | 8.68 | 3.78-4.48 | 387,050 | 22,500 | 72,892 | ||||||||||||||||
|
Plan - February 1, 2012 |
January 31, 2017/2019 | 3.21 | 1.38-1.64 | 748,750 | 91,950 | 119,512 | ||||||||||||||||
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Plan - April 26, 2012 |
April 25, 2017/2019 | 3.23 | 1.47-1.74 | 162,500 | 0 | 46,875 | ||||||||||||||||
|
Plan - November 6, 2012 |
November 5, 2017/2019 | 5.44 | 2.15-2.89 | 17,868 | 0 | 5,269 | ||||||||||||||||
|
Plan - January 29, 2013 |
January 28, 2019 | 6.46 | 3.18-4.04 | 391,330 | 186,206 | 297,744 | ||||||||||||||||
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Plan - August 5, 2013 |
August 4, 2020 | 6.79 | 3.86-4.07 | 324,840 | 64,590 | 258,693 | ||||||||||||||||
|
Plan - November 25, 2013 |
November 24, 2018 | 7.27 | 3.86-4.07 | 50,000 | 50,000 | 50,000 | ||||||||||||||||
|
Plan - April 24, 2014 |
April 23, 2019/2021 | 8.81 | 3.06-3.80 | 327,224 | 287,732 | 295,469 | ||||||||||||||||
|
Plan - March 16, 2015 |
March 15, 2022 | 9.98 | 3.71-3.92 | 442,801 | 425,019 | 439,936 | ||||||||||||||||
|
Plan - September 14, 2015 |
September 13, 2022 | 12.10/12.29 | 5.20 | 233,000 | 215,500 | 218,300 | ||||||||||||||||
|
Plan - February 24, 2016 |
February 23, 2023 | 12.02 | 4.92 | 429,479 | 377,899 | 416,952 | ||||||||||||||||
|
Plan - February 22, 2017 |
February 21, 2024 | 12.33 | 5.11 | 527,061 | 499,745 | 0 | ||||||||||||||||
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Plan - September 20, 2017 |
September 19, 2024 | 12.26-14.53 | 4.77 | 291,500 | 291,500 | 0 | ||||||||||||||||
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Total |
6,335,016 | 2,798,058 | 2,893,880 | |||||||||||||||||||
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The following reconciles the share options outstanding at the beginning and end of the year:
| Number of warrants |
Average exercise price (in €) |
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|
Outstanding warrants at January 1, 2015 |
3,015,978 | 5.71 | ||||||
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Granted |
525,801 | 10.34 | ||||||
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Forfeited |
(67,569 | ) | 7.16 | |||||
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Exercised |
(798,215 | ) | 5.90 | |||||
|
Expired |
(964 | ) | 8.59 | |||||
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Outstanding warrants at December 31, 2015 |
2,675,031 | 6.22 | ||||||
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Granted |
579,479 | 12.04 | ||||||
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Forfeited |
(69,742 | ) | 9.45 | |||||
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Exercised |
(575,638 | ) | 3.91 | |||||
|
Expired |
0 | 0.00 | ||||||
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Outstanding warrants at December 31, 2016 |
2,609,130 | 7.94 | ||||||
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Granted |
818,561 | 12.33 | ||||||
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Forfeited |
(68,227 | ) | 11.27 | |||||
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Exercised |
(654,412 | ) | 0.24 | |||||
|
Expired |
(4,494 | ) | 12.16 | |||||
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Outstanding warrants at December 31, 2017 |
2,700,558 | 11.30 | ||||||
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The fair value of the warrants has been determined at grant date based on the Black-Scholes formula. The variables used in this model are:
|
Warrant plan |
Expected dividend yield |
Expected stock price volatility |
Risk-free interest rate |
Expected duration |
Fair value (in €) |
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|
Plan - July 13,2006 |
0.00 | 60.0 | % | 3.95 | % | 7.00 | 0.63 | |||||||||||||
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Plan - December 29, 2006 |
0.00 | 60.0 | % | 3.95 | % | 7.00 | 0.88 | |||||||||||||
|
Plan - June 14, 2007 |
0.00 | 60.0 | % | 4.63 | % | 7.00 | 0.90 | |||||||||||||
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Plan - October 12, 2007 |
0.00 | 60.0 | % | 4.22 | % | 4.78 | 3.78 | |||||||||||||
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Plan - Augustus 22, 2008 |
0.00 | 60.0 | % | 4.42 | % | 7.00 | 3.11 | |||||||||||||
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Plan - September 29, 2009 |
0.00 | 60.0 | % | 3.14 | % | 7.00 | 5.25 | |||||||||||||
|
Plan - October 30, 2009 |
0.00 | 60.0 | % | 3.11 | % | 7.00 | 5.07 | |||||||||||||
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Plan - December 3, 2010 |
0.00 | 50.0 | % | 3.46 | % | 7.00 | 4.49 | |||||||||||||
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Plan - April 28, 2011 |
0.00 | 55.0 | % | 2.35%-2.84 | % | 5.00-7.00 | 1.38-1.64 | |||||||||||||
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Plan - February 1, 2012 |
0.00 | 55.0 | % | 2.83%-3.65 | % | 5.00-7.00 | 1.47-1.74 | |||||||||||||
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Plan - April 26, 2012 |
0.00 | 49.0%-56.0 | % | 1.09%-1.78 | % | 5.00-7.00 | 2.15-2.89 | |||||||||||||
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Plan - November 6, 2012 |
0.00 | 53.4%-54.0 | % | 1.54%-1.88 | % | 6.60-7.00 | 3.18-4.04 | |||||||||||||
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Plan - January 29, 2013 |
0.00 | 52.7%-53.8 | % | 1.56%-2.08 | % | 6.70-7.00 | 3.86-4.07 | |||||||||||||
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Plan - August 5, 2013 |
0.00 | 52.7%-53.8 | % | 1.56%-2.08 | % | 6.70-7.00 | 3.86-4.07 | |||||||||||||
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Plan - November 25, 2013 |
0.00 | 40.9 | % | 0.91%-1.50 | % | 5.00-7.00 | 3.06-3.80 | |||||||||||||
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Plan - April 24, 2014 |
0.00 | 40.6 | % | 0.2 | % | 7.00 | 3.71-3.92 | |||||||||||||
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Plan - March 16, 2015 |
0.00 | 40.9 | % | 0.6 | % | 7.00 | 5.20 | |||||||||||||
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Plan - September 14, 2015 |
0.00 | 40.9 | % | 0.6 | % | 7.00 | 5.20 | |||||||||||||
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Plan - February 24, 2016 |
0.00 | 42.6 | % | 0.2 | % | 7.00 | 4.92 | |||||||||||||
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Plan - February 22, 2017 |
0.00 | 39.1 | % | 0.21 | % | 7.00 | 5.11 | |||||||||||||
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Plan - September 20, 2017 |
0.00 | 37.7 | % | 0.08 | % | 7.00 | 4.77 | |||||||||||||