National Grid 2007 Annual Report Download - page 70

National Grid Electricity Transmission plc Annual Report and Accounts 2006/07
28. Share capital
Allotted, called up
and fully paid
number £m
-
At 1 April 2005 and 31 March 2006 3,218,870 -
Movement during the year 434,060,000 44
At 31 March 2007
437,278,870
44
During the year, all 43,406,000 issued preference shares of £1 each and all 31,397,600 unissued preference shares
of £1 each were subdivided into preference shares of 10p each and redesignated as ordinary shares of 10p each.
These newly created ordinary shares rank pari passu in all respects with existing ordinary shares.
At 31 March 2007 the authorised ordinary share capital of the company was £275m (2006: £200m) relating to
2,751,191,130 (2006: 2,003,155,130) ordinary shares of 10 pence each.
29. Share option and award plans
National Grid plc operates three principal forms of share option and award plans in which the employees and Directors
of the Group participate. They are an employee Sharesave scheme, a Performance Share Plan (PSP) and the Deferred
Share Plan.
In any 10-year period, the maximum number of shares that may be issued or issuable pursuant to the exercise of options
under all of National Grid’s share option schemes may not exceed the number of shares representing 10% of the issued
ordinary share capital of National Grid plc.
The Sharesave scheme is savings related where, under normal circumstances, share options are exercisable on
completion of a three or a five-year save-as-you-earn contract. The exercise price of options granted represents 80%
of the market price at the date the option was granted.
Under the PSP, awards have been made to Executive Directors and senior employees. Awards made in 2004 are subject
to National Grid's Total Shareholder Return (TSR) performance based on a comparator group of UK and international
utilities over a three-year period. For awards made in 2005 and 2006, the criteria was amended so that 50% is based on
National Grid's TSR performance when compared to the FTSE 100 and 50% is based on the annualised growth of National
Grid's earnings per share. Awards are delivered in National Grid plc shares. At 31 March 2007, the number of conditional
awards of ordinary share equivalents outstanding under the PSP was 3,345,186 (2006: 3,351,044) of which nil (2006: nil)
were exercisable. The number of conditional awards during the year ended 31 March 2007 was 852,121 (2006: 1,080,244)
with awards transferred to the Group during the year of 5,858 (2006: 35,782), lapses/forfeits during the year of 1,333,596
(2006: 53,955) and exercises of 10,049 (2006: nil).
Under the Deferred Share Plan, one half of any bonus earned by Executive Directors of National Grid plc and a
predetermined part of any bonus earned by senior employees and other directors is automatically deferred into National
Grid shares. The shares are held in trust for three years before release. At 31 March 2007, the number of conditional
awards of ordinary share equivalents was 370,817 (2006: nil) of which 74,328 (2006: nil) were available for release. The
number of conditional awards during the year ended 31 March 2007 was 384,649 (2006: nil) with exercises during the year
of 13,832 (2006: nil).
In addition, there are a number of historical plans under which awards are outstanding, but no further awards are being
granted. These include the Executive Plan and the Share Matching Plan.
The Executive Plan applied to senior executives, including Directors. Options granted for the 1999/2000 financial year
were subject to the achievement of performance targets related to National Grid's earnings per share growth over a
three-year period and have now vested. Options granted for the 2000/01 financial year and thereafter are subject to the
achievement of performance targets related to National Grid's TSR over a three-year period. The share options are
generally exercisable between the third and tenth anniversaries of the date of grant if the relevant performance target is
achieved. The 2000 awards remain unvested.
The Share Matching Plan applied to Executive Directors of National Grid plc and other senior employees and Directors
whereby a predetermined part of each participant’s bonus entitlement is automatically deferred into National Grid plc
shares (known as qualifying shares) and a matching award may be made under the Plan after a three-year period, provided
the Director or senior employee is still employed by the National Grid group. At 31 March 2007 the number of options over
ordinary shares outstanding under the Share Matching Plan was 287,632 (2006: 317,618) of which 159,353 (2006: 44,339)
were exercisable. The number of conditional awards during the year ended 31 March 2007 was 507 (2006: 87,877) with
awards transferred to the Group during the year of 49,312 (2006: 5,730) and exercises of 30,493 (2006: 38,565).
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