Note 31 - Share-based payments

The Company has entered into two Share option agreeements with selected employees: On the 13 january 2013, the Company entered into a Share option agreement as follows:

The Board of Directors of Siem Offshore Inc. has authorized the award of 14.000.000 share options to eight key employees of the Company.

The exercise price is NOK 8.45 per share. The exercise price of the granted options is equal to the market price of the shares on the date of the grant.

2014:
20% of the total number beginning on January 18th 2014

2015:
40% of the total number beginning on January 18th 2015, less any options previously issued.

2016:
60% of the total number beginning on January 18th 2016, less any options previously issued.

2017:
80% of the total number beginning on January 18th 2017, less any options previously issued.

2018:
100% of the total number beginning on January 18th 2018, less any options previously issued.

The exercise period shall in no event be later than the date falling 10 years after the award date. The group has no legal or constructive obligation to repurchase or settle the options in cash. No options were exercised during 2014 or 2015.

The weighted average fair value of options granted during the period determined using the Black-Scholes valuation model was NOK 3.72 per option.

The significant inputs into the model were weighted average share price of NOK 8.45 at the grant date, exercise price of NOK 8.45, volatility of 23%, dividend yield of 0%, an expected option life of 10 years and an annual risk-free interest rate of 2.32% (4.13%).

The volatility measured at the standard deviation of continuously compounded share returns is based on statistical analysis of daily share prices over the last three years.

See note 19 for the total expense recognised in the income statement for share options granted to certain employees.

Value of employee services as per December 31, 2015 are recognized under Retained earnings at USD 3,125.

On the 02 April 2014, the Company entered into a Share option agreement with selected employees.

The Board of Directors of Siem Offshore Inc. has authorized the award of 3,000,000 share options to ten key employees of the Company.

The exercise price is NOK 9.07 per share. The exercise price of the granted options is equal to the market price of the shares on the date of the grant.

The Options can be exercised as follows:

2017:
60% of the total number beginning on April 2nd 2017, less any options previously issued.

2018:
80% of the total number beginning on April 2nd 2018, less any options previously issued.

2019:
100% of the total number beginning on April 2nd 2019, less any options previously issued.

The exercise period shall in no event be later than the date falling 10 years after the award date.

The group has no legal or constructive obligation to repurchase or settle the options in cash.

The weighted average fair value of options granted during the period determined using the Black-Scholes valuation model was NOK 3.65 per option.

The significant inputs into the model were weighted average share price of NOK 9,07 at the grant date, exercise price of NOK 9,07, volatility of 25,92%, dividend yield of 0%, an expected option life of 10 years and an annual risk-free interest rate of 2,90%.

The volatility measured at the standard deviation of continuously compounded share returns is based on statistical analysis of daily share prices over the last five years.

During 2015 three members of the option program left the Company. They have been taken out of the progam and previously expensesd option costs are reversed.

See note 19 for the total expense recognised in the income statement for share options granted to certain employees.

Value of employee services as per December 31, 2015 are recognized under Retained earnings at USD 0.391.

(Amounts in USD 1,000)

Excercise price per share option, NOK

Options outstanding

     

At 1 January 2014

8.45

14,000,000

Granted

9,07

3,000,000

Forfeited

Excersised

Expired

At 31 December 2014

8,56*

17,000,000

     

At 1 January 2015

17,000,000

Granted

Forfeited

-7,200,000

Excersised

Expired

At 31 December 2015

8,56*

9,800,000

*weighted average