Vodafone 2009 Annual Report Download - page 101

Financials
Vodafone Group Plc Annual Report 2009 99
20. Share-based payments
The Company currently uses a number of equity settled share plans to grant options and shares to its directors and employees.
The maximum aggregate number of ordinary shares which may be issued in respect of share options or share plans will not (without shareholder approval) exceed:
10% of the ordinary share capital of the Company in issue immediately prior to the date of grant, when aggregated with the total number of ordinary shares which have •
been allocated in the preceding ten year period under all plans; and
5% of the ordinary share capital of the Company in issue immediately prior to the date of grant, when aggregated with the total number of ordinary shares which have •
been allocated in the preceding ten year period under all plans, other than any plans which are operated on an all-employee basis.
Share options
Vodafone Group sharesave plan
The Vodafone Group 2008 sharesave plan and its predecessor the Vodafone Group 1998 Sharesave Scheme enables UK staff to acquire shares in the Company through monthly
savings of up to £250 over a three or five year period, at the end of which they also receive a tax free bonus. The savings and bonus may then be used to purchase shares at the
option price, which is set at the beginning of the invitation period and usually at a discount of 20% to the then prevailing market price of the Company’s shares.
Vodafone Group executive plans
The Vodafone global incentive plan is a discretionary plan under which share options are granted to directors and certain employees. Some of the share options are subject
to performance conditions. Options are normally exercisable between three and ten years from the date of grant. No share options have been granted to the directors or
employees under the Vodafone global incentive plan in the year to 31 March 2009.
The Company has a number of discretionary share option plans, under which awards are no longer made: the Vodafone Group 1998 company share option scheme and
Vodafone Group 1988 executive share option scheme (which are UK HM Revenue and Customs approved); the Vodafone Group 1998 executive share option scheme and
the Vodafone 1988 share option scheme (which are unapproved); and the Vodafone Group 1999 long term incentive plan. Some of the options are subject to performance
conditions. Options are normally exercisable between three and ten years from the date of grant.
For grants made to US employees, prior to 7 July 2003 the options have phased vesting over a four year period and are exercisable in respect of ADSs. For grants made from
7 July 2003, options are normally exercisable between three and ten years from the date of grant, subject to the satisfaction of predetermined performance conditions and
are exercisable in respect of ADSs.
Other share option plans
Share option plans are operated by certain of the Group’s subsidiary undertakings although awards are no longer made under these schemes.
Share plans
Vodafone share incentive plan
The share incentive plan enables UK staff to acquire shares in the Company through monthly purchases of up to £125 per month or 5% of salary, whichever is lower. For each
share purchased by the employee, the Company provides a free matching share.
Vodafone Group global allshare plan
A significant number of employees received a conditional award of 290 shares (2008: 320) in the Company on 1 July 2008, under the Vodafone Group global allshare plan.
The awards vest after two years and are not subject to performance conditions but are subject to continued employment.
Vodafone Group executive plans
Under the Vodafone global incentive plan and its predecessor, the Vodafone Group Plc 1999 Long Term Stock Incentive Plan, awards of performance shares are granted to
directors and certain employees. The release of these shares is conditional upon achievement of performance targets measured over a three year period.
Under the Vodafone Group deferred share bonus plan, directors and certain employees were able to defer their 2006 and 2007 annual bonuses into shares. Subject to
continued employment and retention of the deferred shares for two years, additional shares are released at the end of this two year period if a performance condition has
been satisfied.
Movements in ordinary share options and ADS options outstanding
ADS Ordinary
2009 2008 2007 2009 2008 2007
Millions Millions Millions Millions Millions Millions
1 April 1 3 8 373 584 787
Granted during the year – – – 7 46 65
Forfeited during the year – – – (11) (30) (31)
Exercised during the year – (1) (3) (16) (204) (179)
Expired during the year – (1) (2) (19) (23) (58)
31 March 1 1 3 334 373 584
Weighted average exercise price:
1 April $18.15 $21.46 $26.53 £1.42 £1.35 £1.32
Granted during the year – – – £1.21 £1.63 £1.12
Forfeited during the year – – – £1.47 £1.67 £1.26
Exercised during the year – $19.52 $18.50 £1.09 £1.20 £1.05
Expired during the year – $28.50 $41.86 £1.55 £1.72 £1.68
31 March $15.37 $18.15 $21.46 £1.41 £1.42 £1.35