Under the Group Senior Management – Long Term Incentive Plan (GSM-LTIP) a certain percentage of the actual bonus is granted to the plan participants in the form of registered shares of Clariant Ltd (investment shares). These shares vest immediately upon grant, but are subject to a three-year blocking period. The plan participants receive an additional share free of cost (matching share) for each investment share held at the end of the blocking period.

These shares were granted for the first time in 2011, based on the performance achieved in the base year 2010. Similar plans were launched in all subsequent years. The number of shares not yet vested and thus disclosed are the matching shares already granted.

The options granted under the Clariant Executive Stock Option Plan (CESOP) established in 1999 entitle the holder to acquire registered shares of Clariant Ltd (one share per option) at a predetermined strike price. They become vested and are exercisable after three years and expire after ten years. This stock option plan expired at the end of 2015.

In April 2008, Clariant established a stock option plan for members of management and the Board of Directors. Options granted under this plan entitle the holder to acquire registered shares of Clariant Ltd (one share per option) at a predetermined strike price. Clariant contracted a third-party bank to issue tradable options to the plan participants in accordance with the rules of the plan. The plan participants can sell the options back to this bank after they have vested. The bank in return has the right to claim a share from Clariant at the pre-determined strike price for each option that is sold to it by plan participants. The options become vested and are exercisable after two years and expire after five years. The last grant of the stock option plan to members of Management and the Board of Directors took place in April 2012.

The Restricted Plan for members of the Board of Directors replacing the Option Plan had its first grant date in early 2014.

For the first time in 2013, the Performance Share Unit (PSU) Plan was introduced for all senior managers to replace the former Tradable Option Plan. The term of Clariant’s Performance Share Unit Plan is a three-year vesting period. The vesting is conditional upon achievement of the performance targets at the end of the vesting period. If the performance targets are achieved, each PSU will be converted into one Clariant share.

A new grant took place in September 2016. The review of the target achievements (vesting criteria) for this plan will be held in summer 2019 and vesting is scheduled to take place in September 2019.

The expense recorded in the income statement spreads the costs of each grant over the measurement period and the vesting period. Assumptions are made concerning the forfeiture rate which is adjusted during the vesting period so that at the end of the vesting period there is only a charge for the vested amounts.

During 2016, CHF 9 million (2015: CHF 15 million) were charged to the income statement for equity-settled share-based payments exclusively. The expense for 2016 is lower than the one of the prior year because the goals determined for the PSU plan of 2013 were not achieved and the shares did not vest. All expenses recorded through equity for this plan were reversed.

As of 31 December 2016, the total carrying value of liabilities arising from equity-settled share-based payments, entirely recognized in equity, is CHF 25 million (2015: CHF 29 million).

As per 31 December 2016, the weighted average remaining contractual life of all share options was 0.24 years (2015: 0.94 years).

The fair value of shares granted during 2016 is CHF 19 million (2015: CHF 19 million) calculated based on market value of shares at grant date.

No options were granted in 2016 and 2015.