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31. Share-based payment arrangements (continued)
Risk-free rate – Rates are obtained from the UK Government Debt Management Office website which details historical prices and yields for gilt
strips.
Expected option life to exercise: Experian Share Option Plans – The Experian Share Option Plans vest 50% after 3 years and 50% after 4
years. The expected life is 4 years for the 50% that vest after 3 years and 4.85 years for the 50% that vest after 4 years.
Expected option life to exercise: former GUS plans – The 1998 Approved and Non-Approved Executive Share Option Schemes had expected
lives of 4 years, the North American Stock Option Plan had an expected life of 3.75 years and the Savings related share option schemes had
expected lives of either 3 or 5 years.
Share price on grant date: Experian Share Option Plans – The majority of the grants were made on 11 October 2006. As this was Experian’s
first trading day, the weighted average price of trades was used. For subsequent grants, the closing price on the day of grant was used.
Share price on grant date: former GUS plans – The closing price on the day the options were granted.
Option exercise price – Exercise price as stated in the term of each award.
The weighted average estimated fair values and the inputs into the Black-Scholes models, for the Experian Share Option Plans, are as follows:
Weighted
average
2007
Fair value (£) 1.26
Shareprice on grant date (£) 5.63
Exercise price (£) 5.61
Expected volatility 28.0%
Expected dividend yield 3.3%
Risk-free rate 4.9%
Expected option life to exercise 4.43 years
The weighted average estimated fair values and the inputs into the Black-Scholes models, for the former GUS plans, are as follows:
The 1998 Approved and
Non-Approved Executive The North America Stock Savings related share
Arrangements ShareOption Schemes Option Plan option schemes
Weighted Weighted Weighted Weighted Weighted Weighted
average average average average average average
200712006 200712006 200712006
Fair value (£) 2.06 1.60 2.00 1.52 n/a 2.46
Share price on grant date (£) 9.35 8.53 9.35 8.48 n/a 8.96
Exercise price (£) 9.26 8.61 9.26 8.59 n/a 6.87
Expected volatility 29.4% 27.8% 29.1% 27.4% n/a 25.5%
Expected dividend yield 3.5% 4.0% 3.5% 4.0% n/a 3.8%
Risk-free rate 4.7% 4.3% 4.7% 4.3% n/a 4.1%
Expected option life to exercise 4years 4years 3.75 years 3.75 years n/a 3.56 years
1. Weighted average for the period up to demerger.
Options over GUS plc shares granted in the period from 1 April 2006 to demerger had a weighted average fair value of £2.03 (2006: £1.82).
Experian Annual Report2007 |113