The Group has three share incentive schemes, The EOH Share Trust, The Mthombo Trust and The Share Ownership Plan.
Inclusion in the schemes allows directors, executive management and employees to benefit from the EOH share price
performance. For the share trusts, the participant needs to be in the employ of the Group in order to exercise vested options. The
Mthombo Trust restricts participation to qualifying previously disadvantaged directors, executive management and employees.
During the 2019 financial year, participants of The EOH Share Trust and The Mthombo Trust were given the choice to replace
options with share awards in The Share Ownership Plan. As these awards were identified as replacements, this is treated as a
modification in terms of IFRS 2. The EOH Share Ownership Plan is determined to be equity settled at a Group level. The fair value
was measured based on the market share price of R34,83 on the date of modification.
The fair value will be recognised as an expense over the period from the modification date to the end of the extended vesting
period. The expense for the options will continue to be recognised as if the terms had not been modified.
Under the terms of the current schemes, up to 18 000 000 shares are reserved for share options. The share options are
equity-settled.
The EOH Share Trust
The scheme is governed by a trust deed approved by shareholders and the JSE Limited. The option strike price is equal to the
share price at date of the offer less 40% discount. The participant may exercise the option in respect of the shares granted in
tranches from time to time as set out below. The share options will lapse 10 years after grant date.
- 25% after two years
- 25% after three years
- 25% after four years
- 25% after five years
A reconciliation of the movement of all share options in The EOH Share Trust is detailed below:
| |
|
|
The EOH Share Trust |
|
|
| |
Number of options |
Weighted average strike price
(cents) |
|
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
| Opening balance |
5 178 313 |
|
8 425 861 |
|
80.28 |
|
59.04 |
|
| Granted during the year |
– |
|
1 000 000 |
|
– |
|
19.00 |
|
| – to directors |
– |
|
1 000 000 |
|
– |
|
19.00 |
|
| Forfeited during the year |
(1 779 656) |
|
(1 571 825) |
|
72.80 |
|
69.24 |
|
| Replaced in exchange for shares in the Share Ownership Plan |
– |
|
(2 614 473) |
|
– |
|
66.31 |
|
| Expired during the year |
– |
|
(25 000) |
|
– |
|
4.80 |
|
| Exercised during the year |
– |
|
(36 250) |
|
– |
|
112.58 |
|
| Options granted but not issued up to the end of the year |
3 398 657 |
|
5 178 313 |
|
46.22 |
|
80.28 |
|
| Vesting of share options |
|
|
|
|
|
|
|
|
| Number of options exercisable at year end |
1 916 144 |
|
3 370 890 |
|
46.22 |
|
81.35 |
|
| Exercise date within one year |
708 988 |
|
625 070 |
|
|
|
|
|
| Exercise date between two and five years |
773 525 |
|
1 182 353 |
|
|
|
|
|
| |
3 398 657 |
|
5 178 313 |
|
|
|
|
|
The Mthombo Trust
The scheme is governed by a trust deed approved by shareholders and the JSE Limited. The option strike price is equal to the share price at date of the offer less 40% discount. The participant may exercise the option in respect of the shares granted in tranches from time to time as set out below. The share options will lapse eight years after grant date.
- 33.33% after three years
- 33.33% after four years
- 33.33% after five years
A reconciliation of the movement of all share options in The Mthombo Trust is detailed below:
| |
|
|
The Mthombo Trust |
|
|
| |
Number of options |
Weighted average strike price
(cents) |
|
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
| Opening balance |
941 653 |
|
3 078 746 |
|
57.71 |
|
57.48 |
|
| Forfeited during the year |
(336 252) |
|
(1 254 833) |
|
51.28 |
|
59.57 |
|
| Replaced in exchange for shares in the Share Ownership Plan |
– |
|
(823 464) |
|
– |
|
65.24 |
|
| Expired during the year |
– |
|
(58 796) |
|
– |
|
57.71 |
|
| Exercised during the year |
(18 817) |
|
– |
|
3.72 |
|
– |
|
| Options granted but not issued up to the end of the year |
586 584 |
|
941 653 |
|
55.55 |
|
57.71 |
|
| Vesting of share options |
|
|
|
|
|
|
|
|
| Number of options exercisable at year end |
338 172 |
|
833 652 |
|
55.55 |
|
56.64 |
|
| Exercise date within one year |
154 245 |
|
36 500 |
|
|
|
|
|
| Exercise date between two and five years |
94 167 |
|
71 501 |
|
|
|
|
|
| |
586 584 |
|
941 653 |
|
|
|
|
|
The Share Ownership Plan
The Share Ownership plan was adopted in 2018. The scheme awards participants with shares and is determined to be equity
settled. Shares granted vest in tranches from time to time as set out below.
- 25% after two years
- 25% after three years
- 25% after four years
- 25% after five years
A reconciliation of the movement of all share options in The Share Ownership Plan is detailed below:
| |
|
|
The Share Ownership Plan |
|
|
| |
Number of options |
Weighted average strike price
(cents) |
|
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
| Opening balance |
5 753 032 |
|
– |
|
34.83 |
|
– |
|
| Granted during the year* |
2 271 012 |
|
6 828 225 |
|
5.25 |
|
34.83 |
|
| – to management |
1 818 182 |
|
6 376 805 |
|
3.26 |
|
34.82 |
|
| – to directors |
452 830 |
|
451 420 |
|
13.25 |
|
34.83 |
|
| Forfeited during the year |
(1 834 777) |
|
(1 075 193) |
|
34.83 |
|
34.83 |
|
| Vested during the year |
(62 131) |
|
– |
|
34.83 |
|
– |
|
| Shares granted but not issued up to the end of the year |
6 127 136 |
|
5 753 032 |
|
23.86 |
|
34.83 |
|
| Vesting of shares |
|
|
|
|
|
|
|
|
| Number of shares exercisable at year end |
– |
|
– |
|
21.02 |
|
– |
|
| Exercise date within one year |
2 416 979 |
|
– |
|
|
|
|
|
| Exercise date between two and five years |
3 710 157 |
|
5 753 032 |
|
|
|
|
|
| |
6 127 136 |
|
5 753 032 |
|
|
|
|
|
| * |
Shares granted include transfers from The EOH Share Trust and The Mthombo Trust. |
| |
The EOH Share Trust |
| |
2020 |
|
2019 |
|
| Basis of valuation |
|
|
|
|
| Fair value was determined by using the Binomial model. The inputs were as follows: |
|
|
|
|
| Weighted average share price (Rand) |
– |
|
19.0 |
|
| Option strike price (Rand) |
– |
|
19.0 |
|
| Expected volatility (%) |
– |
|
23.87 |
|
| Expected dividend yield (%) |
– |
|
1.4 |
|
| Weighted average fair value of options/shares granted (Rand) |
– |
|
21.08 |
|
There were no new share options granted during 2019 and 2020 for The Mthombo Trust and no new share options granted in
2020 for The EOH Share Trust.
The volatility of the share price at grant date was determined using the share trading history of EOH Holdings Limited prior to
grant date.
The after-tax risk-free rate applied was the zero-swaps curve at the grant date of the option.
The Share Ownership Plan does not grant employees options, therefore a binomial option pricing model is not used.
| |
|
Outstanding
at
31 July 2019
or date of
appointment |
Shares
granted
during the
period |
|
Weighted
average
strike
price/share
price*
Rand |
At
31 July
2020 |
|
|
| Executive directors |
|
|
|
|
|
|
|
|
| Stephen van Coller |
|
|
|
|
|
|
|
|
| The EOH Share Trust (options) |
|
1 000 000 |
– |
|
19.00 |
1 000 000 |
|
|
| Exercisable within one year |
|
250 000 |
– |
|
19.00 |
250 000 |
|
|
| Exercisable between two and five years |
|
750 000 |
– |
|
19.00 |
750 000 |
|
|
| The Share Ownership Plan (shares) |
|
|
|
|
|
|
|
|
| Exercisable between two and five years |
|
– |
452 830 |
|
13.25* |
452 830 |
|
|
|
|
|
|
|
|
|
|
|
| Megan Pydigadu |
|
|
|
|
|
|
|
|
| The Share Ownership Plan (shares) |
|
62 021 |
– |
|
32.25* |
62 021 |
|
|
| Exercisable within one year |
|
15 505 |
– |
|
32.25* |
15 505 |
|
|
| Exercisable between two and five years |
|
46 516 |
– |
|
32.25* |
46 516 |
|
|
|
|
|
|
|
|
|
|
|
* Relates to grant date fair value in terms of The Share Ownership Plan.
|