28. Share-based payments

Options on participation certificates of Chocoladefabriken Lindt & Spr√ľngli AG are only outstanding within the scope of the existing employee stock option program. An option entitles an employee to a participation certificate at an exercise price, which consists of an average of the price of the five days preceding the issue date. The options have a blocking period during the vesting period of three to five years and if not exercised, they expire after seven years. Changes in outstanding options can be viewed in the table below:

    2014   2013
  Number of options Weighted average exercise price (CHF / PC) Number of options Weighted average exercise price (CHF / PC)
Outstanding options as at January 1 157,509 2,576.27 179,647 2,437.21
New option rights 19,550 4,062.00 33,450 3,123.00
Exercised rights – 30,755 2,409.56 – 53,076 2,454.23
Cancelled rights – 1,879 2,897.40 – 2,512 2,490.76
Outstanding options as at December 31 144,425 2,808.70 157,509 2,576.27
of which exercisable at December 31 26,082 2,126.13 23,458 2,502.58
Average remaining time to expiration (in days) 796   622  

1) The exercise price varies between CHF 1,543 to CHF 4,062.

Options expenses are charged to the income statement proportionally according to the vesting period. The recorded expenses amount to CHF 15.2 million (CHF 16.5 million in 2013). The assumptions used to calculate the expenses for the grants 2011 to 2014 are listed in the following table:

Date of issue 13.1.2014 11.1.2013 7.2.2012 18.3.2011
Number of issued options 19,550 33,450 35,725 36,180
of which in bracket A (blocking period three years) 6,787 11,649 12,450 12,617
of which in bracket B (blocking period four years) 6,883 11,758 12,556 12,705
of which in bracket C (blocking period five years) 5,880 10,043 10,719 10,858
Issuing price in CHF 4,062 3,123 2,679 2,523
Price of participation certificates on date of issue in CHF 4,036 3,159 2,711 2,580
Value of options on issuing date  
bracket A (blocking period three years) in CHF 633.56 568.13 491.66 524.31
bracket B (blocking period four years) in CHF 691.87 587.76 509.70 557.09
bracket C (blocking period five years) in CHF 735.21 592.07 533.03 587.88
Maximum life span (in years) 7 7 7 7
Form of compensation PC from conditional capital
Expected life span (in years) 5–6 5–6 5–6 5–6
Expected rate of retirement per year 2.3% 2.4% 2.5% 2.5%
Expected volatility 22.1% 22.9% 23.8% 24.3%
Expected dividend yield 1.49% 1.45% 1.39% 1.32%
Risk-free interest rate 0.66 – 0.92% 0.46 – 0.57% 0.48 – 0.63% 1.48 – 1.70%
Model Binomial model