111 / 166
24.
SHARE-BASED PAYMENTS
(continued)
Bid Corporation Limited Share Appreciation Rights (SARs) Plan
SARs participants were granted share awards (awards) that vest in tranches after three years (50%), four years (25%) and five years (25%)
respectively. Awards not exercised within a seven-year period following the award date, lapse. The scheme has been classified as an
equity-settled scheme, and therefore an equity-settled share-based payment reserve has been recognised. Award holders are only entitled
to exercise their awards if they are in the employment of the Bidcorp group in accordance with the terms referred to hereafter, unless
otherwise recommended by the remuneration committee.
The number and weighted average exercise prices of awards granted to staff are:
2017
2016
Number
Average
price
R
Number
Average
price
R
Beginning of year
949 500
238,04
–
–
Granted
855 000
263,44
949 500
238,04
End of year
1 804 500
250,07
949 500
238,04
Share awards outstanding at June 30 by year of grant are:
2016
949 500
238,04
949 500
238,04
2017
855 000
263,44
–
–
1 804 500
250,07
949 500
238,04
The awards outstanding at June 30 2017 have an exercise price in the range of R238,04 to R263,91 (2016: R238,04) and a weighted
average contractual life of 6,0 to 6,9 years (2016: seven years). The fair value of services received in return for shares allotted is measured
based on a binomial model. The contractual life of the awards is used as an input into this model.
The fair value of the shares allotted on the below mentioned dates and the assumptions used are:
June 5 2017
June 20 2016
Fair value at measurement date (rand)
90,07
94,33
Exercise price (rand)
263,91
238,04
Expected volatility (%)
22,59
24,38
Option life (years)
3,50 – 5,50
4,00 – 6,00
Distribution yield (%)
2,06
1,75
Risk-free interest rate (based on South African government bonds) (%)
7,18
8,41
The volatility is based on the recent historic volatility of Bid Corporation Limited and The Bidvest Group Limited share.
Conditional share plan (CSP)
The CSP awards executives of Bidcorp a conditional right to receive Bidcorp shares free of any cost. Due to the unbundling, the 2015 CSP
awards for executive directors were restructured into replacement conditional rights and each conditional right in terms of the 2015 awards
was exchanged for a right over a Bid Corporation Limited share. CSP replacement rights are subject to revised performance conditions for
the period starting July 1 2016 and ending June 30 2019.
107
Annual integrated report 2017
Bid Corporation Limited