Marks and Spencer 2006 Annual Report Download - page 74

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72 Marks and Spencer Group plc
Notes to the financial statements continued
12 SHARE-BASED PAYMENTS continued
C Performance Share Plan
The Performance Share Plan is the primary long-term incentive plan for approximately 100 of the most senior executives and was
approved by shareholders in 2005. Under the plan, annual awards, based on a percentage of salary, may be offered. The extent to
which the awards vest is based on earnings per share growth over three years. Further details are set out in the Remuneration report
on page 41. The first award under this scheme was made in July 2005.
During the year, 3,694,559 shares were awarded under the plan. The weighted average fair value of the shares issued was 365.7p.
D Deferred Bonus Plan
The Deferred Bonus Plan was introduced in 2005 as part of the annual bonus scheme for approximately 400 of the most senior
managers. As part of the bonus scheme, the managers are required to defer a proportion of any bonus paid into shares which will
be held for three years. There are no further performance conditions on these shares, other than continued employment, and the
value of any dividends earned during the deferred period will be paid at the end of the period. Further details are set out in the
Remuneration report on page 41.
It is anticipated that shares with a value of £11.9m will be awarded under the scheme in June 2006.
E Restricted Share Plan
A Restricted Share Plan was established in 2000 as part of the reward strategy for retention of senior employees who are vital to the
success of the business recovery and growth. The Plan operates for senior executives below Executive Director level. Awards under
the plan are made as part of ongoing reviews of reward packages, and recruitment tools for new employees. The shares are held in
trust for a period of between one and three years, at which point they are released to the employee, subject to them still being in
employment.
During the year, 564,336 shares (last year 795,428) have been awarded under the Restricted Share Plan. The weighted average fair
value of the shares issued was 331.1p (last year 332.8p).
F Executive Share Matching Plan
The Executive Share Matching Plan for senior management was introduced in 2002, since when there have been annual awards in
2002, 2003 and 2004. The plan currently operates for four members of senior management, and it is intended that no further
awards are made under this plan. Participants were required to invest one-third of any annual bonus earned in shares of the
Company. The pre-tax value of the invested bonus would be matched by an award of shares, with the extent of the match
determined by the Total Shareholder Return performance measure. Further details are set out in the Remuneration report on
page 42.
No shares have been awarded under the Executive Share Matching Plan during the year. Last year, 46,293 shares were issued with
a weighted average fair value of 376.2p.
G United Kingdom Share Incentive Plan
The Share Incentive Plan is a discretionary, all-employee plan, approved by the Inland Revenue, under which Freeshares may be
allocated by the Company. The last award was made in July 2003.