Registration document 2007 - Total.com

9
E) Share-based payment expenses
Share-based payment expenses for the year 2006 amounted to
157 M€ and can be broken down as follow:
• 74 M€ for TOTAL share subscription and share purchase
plans;
• 83 M€ for TOTAL restricted shares plan.
Share-based payment expenses for the year 2005 amounted to
131 M€ and can be broken down as follow:
• 86 M€ for TOTAL share subscription purchase plans;
• 25 M€ for TOTAL restricted shares plan;
• 20 M€ for TOTAL for capital increase reserved for employees
(note 17 to the consolidated financial statements).
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Appendix 1 – Consolidated financial statements
Notes to the consolidated financial statement
D) Grant of TOTAL restricted shares
2005 Plan (a)(b) 2006 Plan (c)
Date of Board of Directors meeting 07/19/2005 07/18/2006
Number of restricted shares
Outstanding as of January 1, 2005 - -
Notified 2,280,520 -
Cancelled (5,992) -
Finally granted - -
Outstanding as of January 1, 2006 2,274,528 -
Notified - 2,275,364
Cancelled (7,432) (3,068)
Finally granted - -
Outstanding as of December 31, 2006 2,267,096 2,272,296
(a) Grants decided by the Board of Directors on July 19, 2005 pursuant to the authorization given by the Shareholders’ Meeting held on May 17, 2005.The grant of these shares, which have
been bought back in 2005 by the Company on the market, will become final after a two-year vesting period (acquisition of the right to restricted shares) on July 20, 2007, subject to a
performance condition. This condition states that the number of restricted shares finally granted will be based on the Return On Equity (ROE) of the Group. The ROE will be calculated on
the consolidated accounts published by TOTAL and related to the fiscal year preceding the year of the final grant, in the present case fiscal 2006. Moreover, the transfer of the restricted
shares, that might hence be finally granted, will not be permitted between the date of final grant and the end of a two-year mandatory holding period, on July 20, 2009.
(b) The number of restricted shares was multiplied by four to consider the four-for-one stock split on May 18, 2006.
(c) Grants decided by the Board of Directors on July 18, 2006 pursuant to the authorization given by the Shareholders’ meeting held on May 17, 2005. The grant of these shares, which have
been bought back in 2006 by the Company on the market, will become final after a two-year vesting period (acquisition of the right to restricted shares) on July 19, 2008, subject to a
performance condition. This condition states that the number of restricted shares finally granted will be based on the Return On Equity (ROE) of the Group. The ROE will be calculated on
the consolidated accounts published by TOTAL and related to the fiscal year preceding the year of the final grant, in the present case fiscal 2007. Moreover, the transfer of the restricted
shares, that might hence be finally granted, will not be permitted between the date of final grant and the end of a two-year mandatory holding period, on July 19, 2010.
TOTAL – Registration Document 2006
Share-based payment expenses for the year 2004 amounted to
138 M€ and can be broken down as follow:
• 118 M€ for TOTAL share subscription and share purchase
plans;
• 20 M€ for TOTAL for capital increase reserved for employees.
The fair value of the options granted in 2006, 2005 and 2004 has been valued according to the Black & Scholes method and based on
the following hypothesis:
For the year ended December 31 2006 2005 2004
Risk free interest rate (%) 4.1 2.9 3.8
Expected dividends (%) 4.2 3.7 3.0
Expected volatility (%) (a) 29.3 23.2 22.0
Vesting period (years) 2 2 2
Exercise period (years) 8 8 8
Weighted-average fair value of the granted options (€ per option) (b) 11.3 10.0 7.8
(a) The expected volatility is based on the implied volatility of TOTAL shares options and of share indices options traded on the markets.
(b) The amounts for 2004 and 2005 have been restated pursuant to the four-for-one stock split of May 18, 2006.