Hexagon Annual Report 2019

The fair value of the options, RSUs and PSUs was calculated on the grant date, based on the Black-Scholes model, and the cost is recognized over the service period. Cost associated with the share option, RSUs and PSUs scheme were NOK 19.0 million in 2019 and NOK 12,5 million in 2018. The unamortized fair value of all outstanding share options (2 705 000), RSUs (149 994) and PSUs (maximum 2 235 906) is estimated to NOK 37.9 million per 31 December 2019. There are no cash settlement obligations. The Group does not have a past practice of cash settlement for outstanding share options. (NOK 1 000) SHARE OPTIONS 2019 RSUS 2019 PSUS 2019 SHARE OPTIONS 2018 RSUS 2018 Outstanding instruments 1 January 3 675 000 100 000 0 3 465 000 0 Instrumetns granted 0 49 994 2 422 476 1 200 000 100 000 Instrumetns exercised -875 000 0 0 0 0 Instrumetns lapsed -95 000 0 -186 570 -990 000 0 Share instruments outstanding 31 December 2 705 000 149 994 2 235 906 3 675 000 100 000 Exercisable at 31 December 0 0 0 0 OVERVIEW OF NUMBER OF OUTSTANDING INSTRUMENTS (NOK 1 000) RSUS AWARDED 2019 PSUS AWARDED 2019 SHARE OPTIONS AWARDED 2018 RSUS AWARDED 2018 Weighted average fair values at the measurement date per share (NOK) 27.65 36.50 6.79 23.50 Dividend yield (%) 0 % 0 % 0 0 Expected volatility (%) 0 % 0 % 45,52 % 0 % Risk-free interest rate (%) 0 % 0 % 1.20 % 0 % Expected life of share options (years) 4.00 3.83 3.29 3.00 Weighted average share price (NOK) 0 0 20.85 0 Model used Black- Scholes Black- Scholes Black- Scholes Black- Scholes THE FOLLOWING TABLE LIST THE INPUT TO THE MODEL USED FOR THE PLAN FOR YEAR ENDED 31 DECEMBER 2019 81 169 2019 AT A GLANCE FROM THE BOARD ROOM FINANCIAL STATEMENTS