Share plans

In 2013, employees were able to purchase a limited number of shares at a discount of 40% (PY: 50%) compared to the market price (“Employee share plan 2013”). Geberit management was entitled to draw the previous year’s variable remuneration partly or entirely in shares valued at market price (“Management share plans 2013”). For each of these shares, management participants received one option (see part 2: “Option plans”). As part of the “Directors program 2013”, non-executive members of the Board of Directors received their compensation for 2012 in shares of Geberit AG at a discount of 40% (PY: 50%). All share plans are subject to blocking periods valid beyond the period of employment.

The share plans introduced in 2013 are summarized below:

The 35,045 shares required for these plans were taken from the stock of treasury shares.

As of December 31, 2013, the Board of Directors, the Group Executive Board and the employees owned a combined total of 338,788 (PY: 370,045) shares, i.e. 0.9% (PY: 1.0%) of the share capital of Geberit AG.

Option plans

The management has the opportunity to invest part or all their variable remuneration in shares of the company through the management share participation plan (MSPP). They may define a fixed number of shares to purchase, or a certain amount or a percentage of their variable remuneration to be invested in shares. In order to encourage the management to participate in the program, a free share option is provided for each share purchased through the program. These options are subject to a vesting period of four years: a quarter of the options can be exercised one year after the grant, a further quarter two years after the grant, a further quarter three years after the grant, and the remaining quarter four years after the grant.

In connection with an additional option plan (MSOP), the managing directors and members of the Group Executive Board are entitled to additional options. The options of the managing directors are subject to a vesting period of four years: a quarter of the options can be exercised one year after the grant, a further quarter two years after the grant, a further quarter three years after the grant, and the remaining quarter four years after the grant. The options of the members of the Group Executive Board are also subject to a vesting period of four years: a third of the options can be exercised two years after the grant, a further third can be exercised three years after the grant and the remaining third four years after the grant.

The exercise price of the options corresponds to the fair market value at the time of grant. The options have a term of seven years after which they expire. They can be exercised between the vesting date and the expiration date. The vesting of share options is subject to the achievement of a performance criterion - the average Return on Invested Capital (ROIC) - over the respective vesting period.

The following is a summary of the options allocated to the management in 2013:

The fair value of the options granted in 2013 amounted to CHF 24.34 at the respective granting date. The fair value was determined using the binomial model for “American Style Call Options”.

The calculation model was based on the following parameters:

The following table summarizes all option plans in place as of December 31, 2013:

The following movements took place in 2013 and 2012:

The 263,894 options outstanding represent 0.7% of the outstanding shares of Geberit AG. In principle, the Group hedges this exposure with treasury shares.

The options outstanding at December 31, 2013 had an exercise price of between CHF 96.50 and CHF 231.20 and an average remaining contractual life of 3.9 years.

Costs resulting from participation plans amounted to MCHF 2.6 in 2013 (PY: MCHF 3.7), those for option plans totaled MCHF 2.6 (PY: MCHF 2.3).