3-20

a. 2024
Jan. 1 Granted 80 share options to each of 400 employees for the purchase of P100 par ordinary
shares at P140 per share. Options shall vest in 2024 if earnings increase by 15% or at the
end of 2025 if average annual earnings for 2024 and 2025 increased by an average of 12%.

Dec. 31 Compensation expense ###

Share options outstanding ###
400 x 80 x 22 = 704,000
704,000/2 = 352,000

2025
Dec. 31 Compensation expense ###
Share options outstanding ###

2026 Cash (32,000 x 140) ###

Share options outstanding ###
Ordinary share capital (32,000 x ###
Share premium - ordinary ###

b. The full amount of P704,000 is recognized as compensation expense since the options vest
already in 2024.