Ryanair 2006 Annual Report Download - page 49

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(Continued)
Notes 49
ANNUAL REPORT & FINANCIAL STATEMENTS 2006
14 ISSUED SHARE CAPITAL, SHARE PREMIUM ACCOUNT AND SHARE OPTIONS
(Continued)
Share options and share purchase arrangements
The group has adopted a number of share option plans, which allow current or future employees or executive directors to purchase shares
in the company up to an aggregate of approximately 5% (when aggregated with other ordinary shares over which options are granted and
which have not yet been exercised) of the outstanding ordinary shares of Ryanair, subject to certain conditions. These are exercisable at
a price equal to the market price of the ordinary shares at the time options are granted.
The key terms of these options plans include:
• Certain non-market performance conditions to be met;
• Approval of the Remuneration Committee to be given; and
• Certain employees to remain in employment with the group for a specified period of time.
Details of the share options outstanding are set out below:
NO. 2006 NO. 2005
SHARE WEIGHTED AVG SHARE WEIGHTED AVG
SHARE OPTIONS OPTIONS EXERCISE PRICE OPTIONS EXERCISE PRICE
Outstanding at start of year 25,956,494 4.39 24,206,538 4.13
Exercised (9,053,515) 3.46 (2,691,968) 2.00
Granted 5,200,000 6.42 5,405,5474.55
Expired (785,978) 2.60 (963,623) 5.42
Outstanding at end of year 21,317,001 5.34 25,956,494 4.39
The mid market price of Ryanair Holdings plc ordinary shares on the Irish Stock Exchange at March 31, 2006 was 7.83. The highest and
lowest prices at which the group’s shares traded on the Irish Stock Exchange in the year ended March 31, 2006 were 8.30 and 5.60
respectively. There were 3,510,847 options exercisable at March 31, 2006. The average share price for the year was 6.96 (2005: 4.94)
The group has accounted for its share option grants to employees at fair value, in accordance with IFRS 2, using a binomial lattice model
to value the option grants. This has resulted in a charge of 2.9m (2005: 0.5m) being recognised within the income statement in respect
of employee services rendered.
The weighted average fair value of the individual options granted during the years ended March 31, 2006 and 2005 were estimated, using
a binomial lattice model, based on the following assumptions.
OPTIONS GRANTED
2006 2005 2005
Date granted August 10, 2005 November 9, 2004 July 4, 2004
Date of earliest exercise August 10, 2010 November 9, 2009 July 4, 2009
Date of expiration August 10, 2012 November 9, 2011 July 4, 2011
Fair value 2.86 2.11 1.93
Assumptions:
Risk-free interest rate 3.0% 3.4% 3.7%
Volatility* 40% 40% 40%
Dividend yield nil nil nil
Maximum life (years) 77 7
*historical monthly volatility over a three year average period