Annual Report 2010/11 - Sonova

CONSOlIDATED FINANCIAl STATEMENTS 143
Warrant Appreciation Rights (WARs)/Share Appreciation Rights (SARs) – Executive Equity Award Plan
The exercise price of the WARs/SARs is generally equal to the market price of the Sonova share at the SIX Swiss Exchange
at grant date. upon exercise of a WAR/SAR, a participant shall be paid, in cash, an amount equal to the product of the
number of shares for which the participant exercised WARs/SARs, mul tiplied by the excess, if any, of the pershare market
price at the date of exercise over the pershare exercise price (determined at the date of grant of WARs/SARs). The initial fair
value of the WARs/SARs is in line with the valuation of the warrants/options of the respective period and recorded as an
expense over the vesting period. until the liability is settled, it is revalued at each reporting date recognizing changes
in fair value in the income statement. The WARs/SARs may be sold between the end of the vesting period and the expiration
date of the WARs/SARs. The Group covers the obligation resulting from the WARs and SARs through conditional share
capital.
Changes in outstanding WARs/SARs 2010/11 2009/10
Number of
WARs
Weighted
average
exercise
price (CHF)
Number of
SARs
Weighted
average
exercise
price (CHF)
Number of
WARs
Weighted
average
exercise
price (CHF)
Number of
SARs
Weighted
average
exercise
price (CHF)
Outstanding WARs/SARs
at April 1 172,214 106.33 23,200 95.05 82,580 77.51 28,400 95.05
Granted 55,535 118.40 99,892 127.60
Exercised/sold (19,282) 73.53 (9,600) 95.05 (9,058) 79.40 (4,400) 95.05
Forfeited (17,500) 125.80 (1,200) 96.00 (800) 95.05
Outstanding WARs/SARs at March 311) Exercisable
190,967 111.37 13,600 95.05 172,214 106.33 23,200 95.05
at March 312)/3) 20,625 101.91 13,600 95.05 14,786 80.35 16,500 95.05
1) The carrying amount of the liability relating to the WARs at March 31, 2011 is CHF 0.9 million (previous year CHF 2.8 million) and the one for the SARs amounts
to CHF 0.03 million (previous year CHF 0.9 million).
2) The intrinsic value of the SARs exercisable at March 31, 2011 amounts to CHF 0 (previous year CHF 35.95).
3) The intrinsic value of the WARs exercisable at March 31, 2011 amounts to CHF 0 (previous year CHF 50.65).
Shares/Restricted Share units (RSus) – Executive Equity Award Plan
For the EEAPs 2005 to 2009, shares have been granted to eligible employees. The value of an individual share granted is
equal to the market price on the SIX Swiss Exchange on the grant date. For the EEAP 2010 and EEAP 2011, restricted share
units (RSus) have been granted to legitimated persons. The value of an RSu is equal to the market price on the SIX Swiss
Exchange on the grant date, adjusted for the fair value of expected dividends, as RSus are not entitled to dividends. RSus
entitle the holder to receive one share per RSu after the blocking period.
The shares/RSus are subject to a blocking period, which starts on the date the shares/RSus are granted. The shares/RSus
delivered under this plan are shares repurchased by the Group on the open stock market or created out of the conditional
share capital.
The cost of the shares/RSus granted as part of the EEAP program is expensed over the expected vesting period. Assumptions
are made regarding the forfeiture rate which is adjusted during the vesting period to ensure that in the end only a
charge for vested amounts occurred.