NOTES TO THE INCOME STATEMENT

4. Employee benefit expenses
20152014
Salaries and fees-249.4-259.6
Pension expenses, defined contribution plans-26.9-28.0
Pension expenses, defined benefit plans-1.7-1.0
Total pension expenses-28.6-28.9
Other social expenses-41.3-42.9
Employee benefit expenses-319.3-331.5
Managing directors and their deputies-2.7-2.9
Members of the Board of Directors-0.3-0.3
Management salaries, fees and benefits-3.0-3.2
Average number of employees during financial year
Clerical employees1 2341 112
Workers6 2036 550
Total7 4377 662
Share-based payments
The Board of Directors of HKScan Corporation approved on 19 December 2012 a share based incentive plan, Performance Share Plan 2013, as a part of the incentive and commitment programme for the Group's key employees. The Plan includes three one-year performance periods, the calendar years 2013, 2014 and 2015, from which the key employees can earn HKScan series A shares based on achieving the set targets. The Board of Directors of the Company will decide on the performance criteria and their targets for a performance period at the beginning of each performance period. Furthermore, the Plan includes one three-year performance period, calendar years 2013–2015. The prerequisite for receiving reward on the basis of this performance period is that a key employee previously owns or acquires the Company´s series A shares up to the number determined by the Board of Directors.
The potential reward from the performance period 2014 was based on the HKScan Group´s Earnings per Share (EPS) and Return on Capital Employed (ROCE). No rewards were paid from the performance period 2014 since the performance criteria targets were not achieved.
The potential reward from the performance period 2015 will be based on the HKScan Group´s Earnings per Share (EPS) and Return on Capital Employed (ROCE).
The possible rewards from the performance period 2013–2015 will be paid in 2016 and from the performance period 2015 in 2018 partly in the HKScan series A shares and partly in cash. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key personnel. In general, no reward will be paid, if the key employee's employment or service ends before reward payment.
At 31 December 2015 the rewards to be paid on the basis of the performance periods beginning in 2013 represent the value of 92 500 HKScan Corporation series A shares in the maximum. At December 2015 the rewards to be paid on the basis of the performance period 2015 represent the value of 442 000 HKScan Corporation series A shares in the maximum.
More specific information of the performance share plan grants are presented in the following tables.
Share based incentives during the reporting period 1 Jan. 2015–31 Dec. 2015
Plan Performance Share Plan 2013 TOTAL
Type SHARE
Instrument Restricted Stock
2013–2015
Performance
Period 2014
Performance
Period 2015
TOT/WA
Initial amount, pcs 121 000 416 000 451 000 988 000
Initial allocation date 1 Feb. 2013 12 Feb. 2014 10 Feb. 2015
Vesting date / payment at the latest 30 Apr. 2016 30 Apr. 2017 30 Apr. 2018
Maximum contractual life, yrs 3.2 3.2 3.2 3.2
Remaining contractual life, yrs 0.3 1.3 2.3 1.2
Vesting conditions Share purchase
and ownership
requirement,
Employment
precondition
EPS (70%),
ROCE-% (30%), Employment precondition
EPS (70%),
ROCE-% (30%), Employment precondition
Number of persons at the end of the reporting year 17 20 24
Payment method Cash & Equity Cash & Equity Cash & Equity
Changes during the period 2015 Restricted Stock
2013–2015
Performance
Period 2014
Performance
Period 2015
Total
1 Jan. 2015
Outstanding at the beginning of the reporting period, pcs 96 000 416 000 0 512 000
Changes during the period
Granted 0 0 451 000 451 000
Forfeited 3 500 0 9 000 12 500
Excercised 0 0 0 0
Expired 0 416 000 0 416 000
31 Dec. 2014
Outstanding at the end of the period 92 500 0 442 000 534 500
The pricing of the share based incentives granted during the period was determined by the following inputs and had the following effect:
Valuation parameters for instruments granted during period
Share price at grant, euros 4.20
Share price at reporting period end, euros 3.81
Maturity, years 3.2
Expected dividends, euros 0.34
Fair value at grant, euros 1 740 860
Fair value 31 Dec. 2015, euros 330 045
Effect of share-based incentives on the result and financial position during the period
Expenses for the financial year, share-based payments, euros 218 550
Expenses for the financial year, share-based payments, equity-settled, euros 90 612
Liabilities arising from share-based payments 31 Dec. 2015, euros 235 942
On 18 December 2015, HKScan announced that the Board of Directors had approved a share based incentive plan for the Group's key personnel for the year 2016. The new plan covers one performance period, year 2016. The potential reward from the performance period will be based on the HKScan Group´s Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Earnings per Share (EPS).
Rewards from the performance period will be paid partly in the Company’s A series shares and partly in cash as follows: 50 per cent pay-out in 2017 and 50 per cent pay out in 2018. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key personnel. No reward will be paid, if the key employee’s employment or service ends before reward payment.
The plan is directed to 37 people. The rewards to be paid on basis of the performance period are a maximum approximate total of 366 000 HKScan Corporation series A shares and cash payment corresponding to the value of such shares.