Annual Report 2006 - Munters

NOTe 28 cont.StartingyearExerciseperiodNumberof issuedoptionsNumber of outstandingoptionson closing dateOptionpremium, SEKExerciseprice,SEK2003 1 Sep 2006–30 March 2007 63,600 10,600 15.80 226.002004 1 Sep 2007–30 March 2008 42,500 42,500 19.80 260.002006 1 Sep 2009–31 March 2010 75,000 75,000 32.80/19.10 341.00181,100 128,100During the year, the option program started in 2002 fell due for payment. Noneof the 114,000 options, with an exercise price of SEK 315, were utilized byoption holders, since the exercise price exceeded the current share price.During the year, the exercise period for the option program started in2003 commenced. The average share price during the exercise period wasSEK 293.51.The fair value of options issued during the year, which was determined usingan appropriate version of the Black-Scholes valuation model, was SEK 32.80per option. Significant input in the model was the average highest and lowestprices paid during the period 28 April – 5 May 2006 of SEK 283.85, the abovementionedexercise price, the options’ exercise period according to the above,volatility of 22 percent, an annual risk-free interest with the same duration as theoptions of 3.46 percent and the estimated dividend for the 2006 to 2008 fiscalyears. The volatility assumption was based on future assessments and thehistoric volatility of the Munters share. Furthermore, consideration was taken tothe fact that the options have restricted liquidity. The exercise price correspondsto 120 percent of the average share price during the period 28 April – 5 May2006. The incoming President acquired options at an exercise price of SEK19.10. The control period for the exercise price was 24 – 31 May 2006, whenthe average price paid for the share was SEK 251.90. The input in the valuationmodel and the exercise price are the same as for other options.Munters also subsidizes the acquisition of shares in Munters made by GroupManagement in October 2005. The subsidy means that during the period up to31 December 2009 or at most to the termination of employment, Munterssubsidizes the interest costs for loan financing of current acquisitions for seniorexecutives. In October 2005, within the framework for the offering, other seniorexecutives jointly acquired 35,000 shares at a cost of SEK 6,825,000. Theincoming President is also included in this subsidy. During 2006, the incomingPresident acquired 12,000 shares at a cost of SEK 2,931,000.NOTE 29 FEES TO AUDITORSGroupParent CompanyAmounts in SEK 000s 2006 2005 2006 2005Ernst & YoungAudit 6,564 5,931 429 429Other assignments 1,311 1,222 – 112OtherAudit 892 646 – –Other assignments 1,100 483 – –9,867 8,282 429 541An audit entails an examination of the annual report and accounts, as well asthe management by the Board of Directors and the President, other tasks forwhich the Company’s auditors are responsible for performing and providingadvice and other council occasioned by this examination or the performance ofother tasks. Other assignments relate mainly to consultation on taxation matters.64 M U N T E R S A N N U A L R E P O R T 2 0 0 6