Marks and Spencer 2003 Annual Report Download - page 21

www.marksandspencer.co m 19
1997 Scheme
The first grants under this scheme were in June 1998 and no options have been granted since June 2000. Options are
subject to the following performance targets on exercise:
•Tier 1 Options: earnings per share growth over three years of at least inflation plus an average of 3% per annum; and
•Tier 2 Options: earnings per share growth over five years which would place the Company in the upper quartile of
the FTSE 100 companies.
Luc Vandevelde, David Norgrove, Alison Reed and Alan McWalter hold options under this scheme.
1984 and 1987 Schemes
The last grants under these schemes were awarded in June 1997. The performance targets for the exercise of options granted
in 1996 and 1997 require earnings per share growth of at least inflation plus an average of 2% per annum.
Participants who hold options under the 1984 and 1987 Schemes will continue to be bound by their Maximum Option
Value (MOV) of four times earnings, and may only exercise options up to this value, after which any outstanding options
lapse. Following the introduction of the 2000 Scheme the Remuneration Committee decided that MOV will no longer
increase with earnings. David Norgrove and Alison Reed hold options under this scheme.
At the discretion of the Remuneration Committee, directors can take their options for all schemes into retirement. Options
held under the 1984 and 1987 Schemes continue to be bound by MOV and can be exercised subject to the option period. For
options held under the 1997, and current Schemes, options lapse if they are not exercised within 12 months of retirement.
Additionally, a Save As You Earn (SAYE) Option Scheme was approved by shareholders in 1981 and renewed by
shareholders in 1987 and 1997. The Scheme is open to all employees, including executive directors, who have completed
one year’s service and who open an approved savings contract. Inland Revenue rules limit the maximum amount which can
be saved to £250 per month. When the savings contract is started options are granted to acquire the number of shares that
the total savings will buy when the savings contract matures; options cannot normally be exercised until a minimum of
three years has elapsed.
The options detailed in the table below may not be exercisable for any one of the following reasons:
(i) the options have not been held for three years and therefore cannot be exercised under scheme rules; or
(ii) the options have not met the appropriate performance criteria.
At 1 April Exercised/ At 29 March
2002 Granted lapsed 2003 Option Exercise
or date of during during or date of price price Option
appointment the year the year retirement (pence) (pence) period
Directors
Luc Vandevelde
Not exercisable (B)74,365,532 4,365,532 261.01Mar 2003 – Jun 2011
Not exercisable (A)6500,000 350.0 Jun 2005 – Jun 2012
Granted 500,000 350.0 Jun 2005 – Jun 2012
Roger Holmes
Not exercisable (B)71,120,816 1,120,816 209.01Dec 2003 – Jun 2011
Not exercisable (A)6182,142 439,284 350.0 Dec 2004 – Jun 2012
Granted 257,142 350.0 Jun 2005 – Jun 2012
Justin King
Not exercisable (B)7377,148 377,148 223.01Mar 2004 – Mar 2011
Not exercisable (A)634,284 137,140 350.0 Dec 2004 – Jun 2012
Granted 102,856 350.0 Jun 2005 – Jun 2012
David Norgrove2
Exercisable (A)455,249 23,612 386.01May 1996 – Jun 2005
Not exercisable (B)7384,386 232.01Sep 2003 – Jun 2011
Not exercisable (A)6681,807 415,277 426.01Jun 1999 – Jun 2012
Granted 117,856 350.0 Jun 2005 – Jun 2012
Lapsed 9,461
Exercised 22,176 329.0 387.9
SAYE 5,089 2,483 156.0 Jan 2004 – Jun 2004
SAYE 2,363 2,363 330.0 Jan 2003 – Jun 2003
SAYE exercised 2,606 223.0 305.0
5 Directors’ interests in long-term incentive schemes continued