Carphone Warehouse 2009 Annual Report Download - page 63

www.cpwplc.com 59
Financial Statements
7 Share-based payments
The Group issues equity settled share-based payments to certain employees, through the following schemes:
a) Performance Share Plan:
The Group has a Performance Share Plan (“PSP”) which uses share options to provide long-term incentives to senior
management. Awards made under the PSP in the years ended 31 March 2007 and 29 March 2008 are subject to Total
Shareholder Return (“TSR”) performance targets and are measured over an initial performance period to 4 June 2010 and a
subsequent performance period to 4 June 2011. Details of performance targets are provided in the Remuneration Report on
pages 33 to 38. Options are forfeited if the employee leaves the Group before the options vest.
Awards made in earlier years were subject to a mixture of Headline earnings per share (see note 12) and TSR performance
targets measured over a three or four year performance period. The performance period for all such awards has been completed
and where targets have been met the relevant share options have vested. If the options remain unexercised after a period of ten
years from the date of grant, the options expire.
Following the transaction with Best Buy, employees of the Group’s retail and distribution business were deemed to have left the
Group, and any unvested PSP share options were therefore forfeited under the rules of the scheme. At the discretion of the
Company’s Remuneration Committee, share options that were due to vest in July 2008 were not forfeited.
The following table summarises the number and weighted average exercise prices (“WAEP”) of share options for the scheme:
2009 2008
Number WAEP Number WAEP
million £ million £
Outstanding at the beginning of the year 43 – 52 –
Granted during the year – – 2 –
Forfeited during the year (15) – (6) –
Exercised during the year (6) – (5) –
Outstanding at the end of the year 22 – 43 –
Exercisable at the end of the year 13 – 6 –
The options outstanding at 31 March 2009 had a weighted average remaining contractual life of 7.3 years (2008: 8.3 years).
The options exercised during the year were exercised at a weighted average market price of £1.54 (2008: £3.51).
Within options outstanding at 31 March 2009 were 8m options (2008: 25m) held by employees of discontinued operations,
of which 8m (2008: 3m) were exercisable at the end of the year.
b) Executive Share Option Scheme:
The Group has an Executive Share Option Scheme (“ESOS”) under which share options have been issued at market value in
previous years. All ESOS options have already vested. If the options remain unexercised after a period of ten years from the
date of grant, the options expire.
The following table summarises the number and WAEP of share options for the scheme:
2009 2008
Number WAEP Number WAEP
million £ million £
Outstanding at the beginning of the year 9 1.02 21 1.11
Exercised during the year (1) 0.89 (12) 1.17
Outstanding at the end of the year 8 1.04 9 1.02
Exercisable at the end of the year 8 1.04 9 1.02
The options outstanding at 31 March 2009 had a weighted average remaining contractual life of 2.5 years (2008: 3.6 years).
The options exercised during the year were exercised at a weighted average market price of £1.64 (2008: £3.31).
Within options outstanding at 31 March 2009 were 4m options (2008: 4m) held by employees of discontinued operations,
of which 4m (2008: 4m) were exercisable at the end of the year.
The summary above includes 5m (2008: 5m) options that were granted before 7 November 2002. In accordance with IFRS 2
‘Share-based Payment’, no cost has been recognised in respect of these options.