Amsterdam Exchanges opts for ratio method for adjusting share option contract specifications

In the past year a number of issuers decided to reduce their outstanding share capital, thus changing their capital structure. This forced Amsterdam Exchanges to adjust the contract specifications of share options and outstanding option contracts relating to these issuers, while taking into account the interests of investors as much as possible. Following extensive studies and consultations with market participants and investors, Amsterdam Exchanges selected the ratio method. Where relevant, this method will be used as a guideline wherever possible. The ratio method uses the ratio of the share s closing price on the last day of trading before the share is listed ex dividend (cum date) to the new theoretical price, and is as follows: 1.A theoretical price is calculated by multiplying the closing price on the cum date, less the dividend, by the share split ratio (old:new); 2.The ratio to be used for adjusting share options ( the ratio ) is determined by dividing the closing price on the cum date by the new theoretical price on the ex date; 3.The trading unit is then adjusted by multiplying the old trading unit by the ratio; 4.Finally, all old exercise prices are divided by the ratio. Amsterdam Exchanges has also asked Professor C. Dert of the Vrije Universiteit in Amsterdam to make recommendations on how to handle (longterm)options on shares in companies that are taken over on a cash basis. Once Amsterdam Exchanges has received his recommendations it will consult market participants about the policy to be followed in the future.