The Group has an options program used to commit personnel to the company. Option rights incentivize key personnel to do long-term work to increase shareholder value and commit to the employer.
Option-based incentive programs 2013
In 2013, the Group’s Board of Directors decided to launch an options program for every member of the Group’s personnel. According to the terms of the options program, options were issued without charge to Group personnel in permanent employment relationships. The option rights are a discretionary and one-off part of the incentive program. The option rights entitle their holders to subscribe to a total maximum of 40,000 class K shares in the company. The recipients of option rights are liable for their own taxes and tax consequences in relation to receiving or exercising option rights.
The period for subscribing to shares under the option rights was from May 1, 2015 to December 31, 2017.
The share subscription price was EUR 10–13.
If the employment relationship between a Group company and the holder of an option right ends, the holder immediately forfeits the option rights issued without charge to him/her if the share subscription period has not begun when the employment relationship ends. Recipients of option rights are not entitled to receive any form of compensation related to the option rights during or after their employment relationships.
Option-based incentive programs 2018
In 2018, the general meeting of shareholders decided to launch an options program for members of the parent company’s Board of Directors. According to the terms of the options program, options were issued without charge to members of the Board of Directors, each of whom could receive a maximum of 500 options. The options program is a means of committing the members of the Board of Directors to the company and, therefore, there is a sound financial justification on the part of the company. The option rights entitle their holders to subscribe to a total maximum of 3,000 class K shares in the company. The recipients of option rights are liable for their own taxes and tax consequences in relation to receiving or exercising option rights.
The period for subscribing to shares under the 2018 option rights is from January 1, 2019 to December 31, 2020.
The share subscription price is EUR 60.
| Key terms and conditions | ||
| Plan | Option 2013 | Option 2018 |
| Nature of the plan | Share option | Share option |
| Grant date | 01/03/2013 | 23/03/2018 |
| Vesting period | 1.3.2013-31.12.2014 | 23.3.-31.12.2018 |
| Vesting conditions | Employment condition | Employment condition |
| Maximum number of options | 40,000 | 3,000 |
| Exercise price (EUR) | 10.00 – 13.00 | 60.00 |
| Price when issued | – | – |
| Settlement | In shares | In shares |
| The options in iLOQ Ltd’s possession and undistributed options are shown in the table below. | ||
| 2018 | Total | |
| Undistributed options | 500 | 500 |
| Key presumptions used in the Black-Scholes valuation model | |
| Program | 2018 |
| Date of issue | 23/03/2018 |
| Volatility (%) | 23.47 |
| Validity (years) | 2.78 |
| Risk-free interest rate (%) | -0.07 |
| Price when issued | 60.00 |
| Option value when issued | 6.15 |
The table below shows the changes in the options in circulation during the financial period.
| Number | 2018 | 2017 |
| At the beginning of the period | 0 | 19,450 |
| Granted during the period | 2,500 | 0 |
| Forfeited | 0 | 0 |
| Exercised | 0 | -10,660 |
| Lapsed | 0 | -8,790 |
| At the end of the period | 2,500 | 0 |
| Exercisable | 0 | 0 |
| Effect of share-based payments on the profit for the financial period | ||
| EUR thousand | 2018 | 2017 |
| Share-based payments | 15 | 0 |
| Total | 15 | 0 |