Personnel expenses refer to all expenses associated with the remuneration of personnel employed by the Group.

Amounts in MNOK	2007	2006	2005
Salaries	2 131	1 767	1 610
Social security tax	279	252	248
Pension expenses, defined benefit plans (Note 11)	151	128	101
Pension expenses, defined contribution plans (Note 11)	10	8	5
Bonus-related costs, including social security tax	100	68	-
Other benefits	151	103	79
Total personnel expenses	2 822	2 326	2 043

For a more detailed description of the bonus scheme for executive management, see Note 32 "Close associates".

Other benefits include employee share/option programmes for MNOK 17 in 2007 and MNOK 7 and 6 in 2006 and 2005, respectively.

Average full-time equivalents (FTEs)/employees

	2007	2006	2005
Norway	3 264	2 907	2 888
Europe	200	188	195
America	198	173	119
Asia	319	207	191
Other	5	10	6
Total	3 986	3 485	3 399

The figures represent the average no. of FTEs in 2007 and 2006, and the number of employees in 2005. The number of employees in 2005 has been adjusted for the sale of yachting activities.

Options for employees

For a number of years, the Group has conducted a share programme for all employees, offering shares at a discount and with options to buy more shares at the same price if the employee owns them for more than two years. Discounts on the sale of shares to employees are classified as personnel expenses. The fair value of the options is estimated on the balance sheet date and expensed as personnel expenses over the vested period. The option scheme is cash-based, since employees can choose between shares or cash. No new options were issued in 2007, as the option segment of the share programme was discontinued as from 2007.

The share programme for 2005 offered shares for up to NOK 30 000 per employee, including a 20 per cent discount. The options have a strike price of NOK 106. The share programme for 2006 corresponded to the one for 2005, with the exception of the strike price, which was NOK 168,-.

	2007	2006	2005
Number of options outstanding at 1 Jan.	113 217	142 215	144 629
Number of options granted	-	41 999	71 497
Number of options exercised	(54 031)	(42 008)	-
Number of options expired	(17 187)	(28 989)	(73 911)
Options outstanding at 31 Dec.	41 999	113 217	142 215

MNOK 10, including social security, was recognised as an expense for options for employees in 2007. The comparable amounts were MNOK 4 and NOK 3 in 2006 and 2005, respectively.

Outstanding options carry the following terms and conditions

Expiration date	Strike price in NOK	Number	Value per option in NOK at 31 Dec 07	Liabilities in MNOK at 31 Dec 07
2008	168	41 999	172	6

The fair value of the options is estimated using Black-Scholes' option pricing model. The option value is calculated as the fair value on 31 Dec. 2007, as the
options are cash-settled. The market value of the share was NOK 339 (NOK 175) at 31 Dec. 2007. The market value of the share on the date of exercise was NOK 242.50 (NOK 148.50) in 2007.

A volatility of 17 per cent is still assumed, based on the KONGSBERG share's historical volatility back to 1993. It is assumed that past volatility is an indication of future volatility. The volatility of the share has been relatively similar from year to year. The calculation is based on a risk-free interest rate of 4.4 per cent and an estimated dividend share of 1.3 per cent. The estimated dividend yield is the average for the past two years. This is an estimate of the expected future dividend share.

It is assumed that all employees will exercise their options on their maturity date. The options' expected term to maturity is two years from the date on which the options were granted. The remaining terms to maturity is five months.