As part of Grontmij’s new strategy, the Supervisory Board has replaced the former value dependent cash bonus system with a long-term share plan (LTSP) to better align the interests of members of the Executive Board and other management with the interests of shareholders and to stimulate long-term commitment to Grontmij. The detailed plan was adopted by the Supervisory Board on 6 August 2012 and will apply retroactively as of 1 January 2012.
Under the LTSP the Executive Board and other management are entitled to receive conditional ordinary shares subject to achieving a long-term target relating to the stock performance (total shareholder return including reinvested dividend) relative to a selected peer group (i.e. the target). The peer group consists of Arcadis, Atkins, Pöyry, Sweco, WYG, WSP, Imtech, Ballast Nedam and Heijmans. The target will be measured annually on an average basis over a rolling period of three calendar years.
The conditional ordinary shares will be granted for no financial consideration subject to achieving the set target and will vest after three years if and when the target is met. The Executive Board and other management are not entitled to any shareholders’ rights including the right to dividends, during this three-year period. After vesting, the ordinary shares are subject to a lock-up of two years, after which the members of the Executive Board and other management obtain unrestricted control.
Granting will take place each year on the first business day after the announcement of the annual results. In 2012, granting took place on the first business day after the announcement of the half year results. The number of ordinary shares conditionally granted is based on a percentage of the fixed annual salary divided by the average share price of the ordinary shares during the last quarter of the calendar year preceding the start of the three-year reference period.
For the CEO, the percentage amounts to 30% of the fixed annual salary, whilst for the other members of the Executive Board the percentage amounts to 20% (both percentages similar to the former value dependent bonus scheme).
100% of the conditional ordinary shares granted will vest if Grontmij ranks at position 4 of the peer group list. No shares will vest if Grontmij ranks below position 7 of the peer group list. If the target is outperformed and Grontmij ranks as number 1, the maximum of 150% of the conditional ordinary shares granted will vest. In between these positions, the conditional ordinary shares will vest proportionally. For the granting in 2012, the number of conditional ordinary shares is calculated using the average share price during the period from 1 June up to and including 31 August 2012. As a result the maximum percentage of variable remuneration in shares amounts to 45% of the fixed annual salary for the CEO and 30% for the other members of the Executive Board.
Shares under the LTSP will either be issued or repurchased by Grontmij depending on Grontmij’s financial position, specifically the cash available within Grontmij. The maximum number of ordinary shares that may be issued under the LTSP will not exceed 1% of the number of outstanding ordinary shares.
Overview of the granted rights to conditional shares:
Rights to conditional shares granted on Granted Unconditional
31 August 2012 211,831 1 January 2017
An amount of € 33,565 has been included in wages and salaries (note 30) with respect to the equity-settled share-based payments arrangements.
Netherlands, Poland and the United Kingdom are able to participate.
Eligible employees are granted a discount of 15% on the market value. They are to hold the participations for a period of three years and will then be granted one participation free of charge for every four participations, provided they will hold them for a further two years and are still employed by the Group at the end of that period.
As at 31 December 2012, 70,919 (2011: 36,105) participations have been subscribed. The number of participations is exclusive of the not awarded matching participations. Given the current non-materiality of the related liability, it was not measured and recognised in the consolidated statement of financial position as at 31 December 2012 and at 31 December 2011. As at 31 December 2012, 3,712 matching participations were held. Reference is made to note 34.
Number of ordinary shares Stichting ESPP 2012 2011
Balance as at 1 January 36,105 25,342
Movements
Purchased 35,198 11,557
Sold -3,673 -1,217
Awarded according to matching principle 3,289 423
34,814 10,763
Balance as at 31 December 70,919 36,105
Stichting Medewerkersparticipatie Grontmij
The Stichting Medewerkersparticipatie Grontmij (‘Stichting SMPG’) offered employees the opportunity to acquire participations in ordinary shares of Grontmij N.V. Since 2008, acquiring participations through the Stichting SMPG is no longer possible. At the end of 2012, 1,421 members of staff (2011: 1,570) were registered for 80,924 participations (2011: 66,059). Reference is made to note 34.
Number of ordinary shares Stichting SMPG 2012 2011
Balance as at 1 January 66,059 82,246 Movements Purchased 20,440 - Stockdividend - 2,236 Sold -5,575 -18,423 14,865 -16,187 Balance as at 31 December 80,924 66,059
This part of the notes contains information on the terms and conditions of the Group’s interest bearing loans and other financial liabilities, valued at amortised cost.
In thousands of € 31 December 2012 31 December 2011
Non-current liabilities
Bank loans - credit facilities 128,557 138,911
Secured bank loans 3,308 4,124
Unsecured other loans 97 1,413
Finance lease liabilities 2,343 2,805
134,305 147,253
Current liabilities
Bank loans - credit facilities 13,840 50,000
Secured bank loans 381 241
Unsecured other loans - 144
Finance lease liabilities 1,270 2,032
15,491 52,417
Total loans and borrowings 149,796 199,670