Philips 2007 Annual Report Download - page 174

Philips Annual Report 2007180
Restricted share rights, USD-denominated1)
shares
weighted average
grant-date fair value
Outstanding at January 1, 2007 1,507,881 28.43
Granted 1,039,179 40.23
Vested/Issued 673,229 28.14
Forfeited 156,462 30.64
Outstanding at December 31, 2007 1,717,369 35.47
1) Excludes incremental shares that may be received if shares awarded under the restricted share rights plan are not sold
for a three-year period.
At December 31, 2007, there was a total of EUR 45 million of unrecognized compensation cost related to non-vested
restricted share rights. This cost is expected to be recognized over a weighted-average period of 1.1 years.
In November 2005, the Company acquired a controlling interest in Lumileds (refer to note 2). Lumileds had an existing
stock option plan that provided for the granting of options to purchase depository receipts, representing benecial
economic and voting interests in a like number of shares to its employees and certain consultants.
In December 2006, the Company offered to exchange outstanding Lumileds Depository Receipts and options for
cash and shared-based instruments settled in cash. The amount to be paid to settle the obligation, with respect
to share-based instruments, will uctuate based upon changes in the fair value of Lumileds. Substantially all of the
holders of the options and the depository receipts accepted the Company offer. The amount of the share-based
payment liability, which is denominated in US dollars, recorded at December 31, 2006 was EUR 97 million. During
2007, the Company paid EUR 54 million as a part of the settlement of the liability. Additionally, an expense of EUR 6
million was recognized to reect an adjustment to the value of the liability. The balance at December 31, 2007
amounted to EUR 49 million which will be paid between 2008 and 2012.
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Information on remuneration
Remuneration of the Board of Management
Remuneration and pension charges relating to the members of the Board of Management amounted to EUR 8,732,378
(2006: EUR 9,090,403; 2005: EUR 6,363,218). In 2007, an additional amount of EUR 739,861 (2006: EUR 645,123, 2005:
EUR 431,001) was awarded in the form of other compensation. When pension rights are granted to members of
the Board of Management, necessary payments (if insured) and all necessary provisions are made in accordance with
the applicable accounting principles. In 2007, no (additional) pension benets were granted to former members of
the Board of Management.
In 2007, the present members of the Board of Management were granted 318,132 stock options (2006: 198,027 stock
options; 2005: 144,018 stock options) and 106,044 restricted share rights (2006: 66,009 restricted share rights; 2005:
48,006 restricted share rights).
At year-end 2007, the members of the Board of Management held 1,771,097 stock options (year-end 2006: 1,355,765;
2005: 923,551) at a weighted average exercise price of EUR 28.05 (year-end 2006: EUR 27.70; 2005: EUR 28.33).
128 Group nancial statements
Notes to the group nancial statements
188 IFRS information 240 Company nancial statements