IFRS PRACTICAL IMPLEMENTATION GUIDE AND WORKBOOK

Wiley IFRS: Practical Implementation Guide and Workbook

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The expense recognized in the income statement for 2006 ansmg from share-based payment transactions amounted to EO million (2005: EO.5 million) and is recorded within the operating ex– penses. The contra-entry to the expense was recorded in equity. The remaining contractual lives for stock options outstanding at the end of the period are pre– sented as follows: Tranche II (2000) until July 2007, Tranche III (2001) until July 2008, Tranche IV (2002) until July 2009, and Tranche V until July 20 10. For stock options outstanding at the end of the period, it is not possible to disclose the range of exercise prices because they are dependent on future share prices. No stock options were issued during the year under review. The stock options may only be exercised subject to the attainment of at least one of the following performance objectives: 1. Absolute performance: During the period between the issuance and exercise of the stock op– tions, the stock market price for the adidas AG share--calculated upon the basis of the total shareholder return approach-has increased by an annual average of at least 8%. 2. Relative performance: During the same period, the stock market price for the adidas AG share must have developed by an annual average of I % more favorably than the stock market prices of a basket of competitors of the adidas Group globally and in absolute terms may not have fallen. The stock options may only be exercised against payment of the exercise price. The exercise price corresponds to the arithmetical mean of the closing prices of the adidas AG share over the last 20 trading days of the respective exercise period, less a discount, which is composed of the absolute and relative performance components. In any case, the exercise price shall be at least the lowest issue price as stated in § 9 section I of the German stock Corporation Act (AKTG), currently E1.00 (i.e., E4.00 per option). The option terms and conditions stipulate that the stock options may be used for existing common shares in lieu of new shares from the contingent capital, or in the place of common shares the discount is paid in cash . The new shares participate in profits from the beginning of the year in which they are issued.