Holiday Inn 2006 Annual Report Download - page 79

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24 Share-based payments (continued)
The Group recognised a cost of £18m (2005 £17m) related to equity settled share-based payment transactions during the year.
The aggregate consideration in respect of ordinary shares issued under option schemes during the year was £20m (2005 £10m).
The following table sets forth awards and options granted during 2006. No awards were granted under the Executive Share Option Plan,
Sharesave Plan or US Employee Stock Purchase Plan during the year.
Short Term Deferred Performance Restricted
Incentive Plan Share Plan
Number of shares awarded in 2006 569,293 4,277,550
In 2006 and 2005, the Group used separate option pricing models and assumptions for each plan. The following tables set forth information
about how the fair value of each option grant is calculated:
Short Term Deferred Performance Restricted
2006 Incentive Plan Share Plan
Valuation model Binomial Monte Carlo
Simulation and
Binomial
Weighted average share price 831.0p 946.0p
Expected dividend yield 2.32%
Risk-free interest rate 4.90%
Volatilitya20%
Term (years)b2.0 3.0
Short Term Deferred Performance Restricted Executive Share
2005 Incentive Plan Share Plan Option Plan
Valuation model Binomial Monte Carlo Binomial
Simulation and
Binomial
Weighted average share price 652.8p 702.0p 627.0p
Exercise price 620.0p
Expected dividend yield 2.73% 3.18% 3.62%
Risk-free interest rate 4.10% 4.69%
Volatilitya23% 28%
Term (years)b2.0 3.0 6.5
a The expected volatility was determined by calculating the historical volatility of the Company’s share price corresponding to the expected life of the option
or share award.
b The expected term of the options is taken to be the mid point between vesting and lapse, as historical exercise patterns have shown this to be appropriate.
IHG Notes to the Group financial statements 77
Notes to the Group financial statements