111
2014 ANNUAL REPORT
26 Equity compensation benefits
(continued)
b) Stock option plan
The Group has a stock option plan for senior executives. Under this arrangement, the holder has the right to purchase a specified number
of ordinary shares of Republic Bank Limited at a pre-determined price on or before a pre-determined date. Options are granted only when
certain pre-determined individual, corporate and strategic objectives are realised.
The plan provides that the maximumnumber of ordinary shares that may be purchased on the exercise of options is 7,950,650 shares and
the maximum entitlement for any one executive is no more than 50% of the shares comprising the plan. There is a three-year waiting period
after the grant date of options before the grantee may exercise the right to purchase the shares represented by the options. The maximum
period within which an option may be exercised is ten years.
The option price shall be the Bank’s share price at the beginning of the performance period during which the option is earned. The
price is calculated as the weighted average closing share price on all trading days during the calendar month, prior to the beginning of the
performance period. The process of assessment, calculation of options and approval by the Board of Directors takes place in the first quarter
following the end of the financial year.
The movement in outstanding options is outlined below.
2014
2013
2014
2013
Weighted average exercise price Number of shares
At the beginning of the year
$84.04
$82.14
1,980,702
1,773,899
Granted
$104.41
$92.67
362,833
388,571
Exercised
$85.24
$83.87
(551,950)
(181,768)
At end of year
$87.38
$82.14
1,791,585
1,980,702
Exercisable at end of year
$85.40
$84.42
1,209,734
955,785
Expiry
Exercise
2014
2013
date
price
15-Dec-15
$78.78
46,665
139,816
20-Dec-16
$90.19
124,503
213,036
20-Dec-17
$86.75
187,867
260,049
20-Dec-18
$80.00
167,038
245,114
20-Dec-19
$101.80
11,876
11,876
21-Feb-21
$85.94
224,419
340,681
3-Feb-22
$72.99
350,306
395,405
30-Jan-23
$92.67
336,496
374,725
31-Dec-24
$104.41
342,415
–
1,791,585
1,980,702
As at September 30, 2014, none (2013: none) of the outstanding options were anti-dilutive and therefore not included in the calculation of
diluted earnings per share.
