22. SHARE-BASED PAYMENTS
Stock option scheme 2009
The Annual General Meeting of Alma Media on 11 March 2009 decided, in accordance with the proposal by the Board of Directors, to continue the incentive and commitment system for Alma Media management through an option programme according to earlier principles and decided to grant stock options to the key employees of Alma Media Corporation and its subsidiaries in the period 2009–2011. Altogether 2,130,000 stock options could be granted, and these may be exercised to subscribe to a maximum of 2,130,000 Alma Media shares, either new or in possession of Alma Media. Of the total number of options, 710,000 were marked 2009A, 710,000 were marked 2009B and 710,000 were marked 2009C. The subscription period for the 2009A stock options ended on 31 March 2014, and the subscription period for the 2009B stock options ended on 31 March 2015.
If all remaining subscription rights are exercised, the option programmes 2009 will dilute the holdings of the earlier shareholders by a maximum of 1%.
The stock option plan is recognised in the financial statements in accordance with IFRS 2, Share-based payments. The option rights granted are measured at their fair value on the grant date using the Forward Start Option Rubinstein (1990) model based on the Black-Scholes pricing model and expensed in the income statement under employee expenses over the vesting period. An expense of MEUR 0.0 was recognised in 2015 (in 2014 MEUR 0.1). The expected volatility has been determined by calculating the historical volatility of the company´s share price, which includes the volatility of the listed shares of the so-called previous Alma Media Corporation.
Specification of option rights
Scheme 2009
Share subscription period Period determining subscription price
Options Number Annulled Free begins ends (trade-weighted average share price)
2009C 710,000 130,000 45,000 04/01/14 03/31/16 04/01/11- 04/30/11
The share subscription prices will be reduced by the amount of dividend per share and capital repayment per share decided after the period for determination of the share subscription price but before share subscription.
Scheme 2009
Principal terms and conditions of the option scheme:
AGM date/Date of issuing 03/11/09
Initial number, pcs 710,000
Grant date(s) 05/05/11
07/21/11
Number of granted options, pcs 640,000
The subscription ratio for underlying shares, pcs 1.00
Initial exercise price, € 7.95
Share price at time of grant, € 7.52
Expected volatility 31%
Expected period of validity of the option on grant date, years 2.9
Risk-free interest 3%
Dividend adjustment Yes
Exercise price on 31 December 2015, € 7.23
Initial allocation date 05/05/11
Vesting date 04/01/14
Maturity date 03/31/16
Maximum contractual life, years 4.9
Remaining contractual life, years 0.2
Number of persons at the end of the reporting year 18
Payment method Share
Expiry 03/31/16
Value of the option right determined on the grant date €2.30/share
MEUR 1.5
Value determination model Black&Scholes (Forward Start Option, 1990 Rubinstein)
The option rights are granted on condition that the recipients pledge to subscribe to shares corresponding to at least 25% of the gross value of the options granted to them when the options are sold and to refrain from selling the subscribed shares for at least one year from the end of the share subscription period for each respective option right.
Should the option holder’s employment or service contract with Alma Media Group end for reasons other than death or retirement, as determined by the company, or permanent disability, or for another reason determined by the Board of Directors and independent of the option holder, the option holder shall return to the company without consideration all option certificates for which the share subscription period has not begun on the date of the termination of the employment or service contract.
The option rights may be freely transferred when the share subscription period that applies to them has commenced. Before the commencement of the share subscription period for the options in question, option rights may only be transferred with the consent of the Board of Directors.
Changes during option period
Scheme 2009
Number of options 2015 2014 2015 2014 2015 2014
At beginning of financial year 509,750 505,000 505,000 535,000 535,000
Number of new options granted
Number of options forfeited -509,750 -505,000
Number of options exercised
At end of period 505,000 535,000 535,000
Shared-based incentive programme 2015
In February 2015, the Board of Directors of Alma Media Corporation approved a new share-based incentive programme for the key management of Alma Media (LTI 2015).

Three plans were started in spring 2015 under the programme: a fixed matching share plan and two performance matching plans. Investment in Alma Media shares is a precondition for participation. A total of 33 people are participating in the plans with 76,550 shares. In each plan, the participant can earn a maximum of two matching shares for each invested share, which means that the maximum number of Alma Media shares that can be earned under the plans is 459,300 shares (gross amount from which taxes are withheld).

In the fixed matching share plan, the participant receives two matching shares for each invested share free of charge after a two-year vesting period, provided that the participant holds on to the shares invested in the plan and remains employed by Alma Media Group for the duration of the vesting period, or until spring 2017. The maximum number of matching shares that can be earned is currently 153,100 shares (gross amount from which taxes are withheld).

In the performance matching plans, the participant may earn at most two matching shares based on the profitable growth of the digital business and at most two matching shares based on the total shareholder return of the Alma Media share. Any performance matching shares earned will be paid based on digital business growth in spring 2018 and based on the total shareholder return of the company’s share in spring 2020. The maximum number of matching shares that can be earned under both of the performance matching plans is currently 153,100 shares (gross amount from which taxes are withheld).

Payment of the incentive is contingent on the participant holding on to the shares invested in the plan and remaining employed by the Group for the duration of the plans, until March 2017, 2018 and 2020. The incentives are paid partly in cash and partly in shares. The cash component is intended to cover taxes incurred by the participant from the incentive.

The fair value of the reward is expensed until the matching shares are paid. The fair value of the share component is determined on the date on which the target group has agreed to the conditions of the plan. The financing cost arising from the obligation to hold shares and dividends expected during the vesting period have been deducted from the value of the share. The fair value of the plan based on the total shareholder return of the share also takes the market-based earning criteria into consideration. The cash component of the incentive is remeasured on each reporting date during the vesting period based on the price of the share on the date in question.
Principal terms and conditions of the Performance Share Plan:
Instrument Fixed matching share plan Performance matching share plan Performance matching share plan TSR
AGM date/Date of issuing 02/12/15 02/12/15 02/12/15
Maximum number of shares 153,100 153,100 153,100
Dividend adjustment No No No
Initial allocation date 06/17/15 06/17/15 06/17/15
Performance period begins 01/01/15 01/01/15 01/01/15
Performance period ends 03/31/17 03/31/18 03/31/20
Vesting date 03/31/17 03/31/18 03/31/20
Maximum contractual life, years 1.8 2.8 4.8
Remaining contractual life, years 1.2 2.2 4.3
Number of persons at the end of the reporting year 32 32 32
Payment method Cash & share Cash & share Cash & share
Measurement inputs for the incentives granted during the reporting period
Share price at time of granting, € 3.10 3.10 3.10
Share price at end of period, € 3.00 3.00 3.00
Dividend yield assumption, € 0.14 0.26 0.48
Fair value on 31 December 2015, € 0.4 0.2 0.1
Changes during share plan period
1 January 2015
Outstanding at the beginning of the reporting period, pcs
Reserve at the beginning of the reporting period, pcs
Changes during the period
Granted during the period 153,100 153,100 153,100
Lost during the period 6,000 6,000 6,000
31 December 2015
Exercised by the end of the period
Outstanding at the end of the period 147,100 147,100 147,100
Reserve at the end of the period
Effect of the share-based incentive programme on the financial year’s result and financial position
MEUR 2015
Costs for the financial year, share-based payments 0.2
Costs for the financial year, share-based payments, in shares 0.1
Liability arising from share-based payments, 31 December 2015 0.1
The management’s shareholdings and rights to options and share rewards are detailed in Note 7, Employee benefits expense.