Marks and Spencer 2007 Annual Report Download - page 73

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1122 SSHHAARREE--BBAASSEEDD PPAAYYMMEENNTTSS
The charge for share-based payments arises across the following schemes:
2
20000772006
Notes £
£mm£m
Save As You Earn Share Option Scheme 12A 1
100..0010.2
Executive Share Option Scheme 12B 33..116.5
Performance Share Plan 12C 77..112.5
Deferred Share Bonus Plan 12D 55..332.0
Restricted Share Plan 12E 11..331.8
Executive Share Matching Plan 12F ––0.4
United Kingdom Share Incentive Plan 12G 00..441.3
Share Matching Deal Plan 12H 0
0..11–
TToottaall sshhaarree--bbaasseedd ppaayymmeenntt cchhaarrggee2277..3324.7
Details of the option and share schemes that the Group operates are provided in the Remuneration report on pages 44 to 50.
A
ASSaavvee AAss YYoouu EEaarrnn SShhaarree OOppttiioonn SScchheemmee
Under the terms of the Scheme, the Board may offer options to purchase ordinary shares in the Company once in each financial
year to those employees who enter into an Inland Revenue approved Save As You Earn (SAYE) savings contract. Inland Revenue
rules limit the maximum amount saved to £250 per month. The price at which options may be offered is 80% of the market price
for three consecutive dealing days preceding the offer date. The options may normally be exercised during the period of six months
after the completion of the SAYE contract, either three or five years after entering the Scheme.
220000772006
N
Nuummbbeerr ooffWWeeiigghhtteedd aavveerraaggeeNumber of Weighted average
ooppttiioonnsseexxeerrcciissee pprriicceeoptions exercise price
Outstanding at beginning of the period 4
400,,440033,,662255226611..66pp52,188,263 235.0p
Granted 6
6,,556699,,552277555599..00pp8,528,770 349.0p
Exercised (
(1111,,881144,,006688))223322..44pp(14,658,839) 206.9p
Forfeited (
(11,,663377,,001122))332255..55pp(4,270,037) 253.6p
Expired (
(228800,,445566))225588..00pp(1,384,532) 397.7p
Outstanding at end of the period 3
333,,224411,,661166332277..66pp40,403,625 261.6p
Exercisable at end of period 7
72266,,661155224433..44pp3,897,065 226.7p
For SAYE share options exercised during the period, the weighted average share price at the date of exercise was 698.8p
(last year 472.5p).
The fair values of the options granted during the year have been calculated using the Black-Scholes model assuming the inputs
shown below:
220000772006
33 yyeeaarr ppllaann55 yyeeaarr ppllaann3 year plan 5 year plan
Grant date N
Noovv 0066NNoovv 0066Nov 05 Nov 05
Share price at grant date 6
69988pp669988pp436p 436p
Exercise price 5
55599pp555599pp349p 349p
Option life in years 3
3 yyeeaarrss55 yyeeaarrss3 years 5 years
Risk free rate 5
5..44%%55..33%%4.3% 4.2%
Expected volatility 2
211..55%%2277..55%%25.8% 29.8%
Expected dividend yield 2
2..22%%22..22%%2.7% 2.7%
Fair value of option 2
20000..66pp224477..88pp120.6p 143.6p
Volatility has been estimated by taking the historic volatility in the Company’s share price over a three or five-year period.
The resulting fair value is expensed over the service period of three or five years on the assumption that 15% of three-year options
and 20% of five-year options will lapse over the service period as employees leave the Company.
wwwwww..mmaarrkkssaannddssppeenncceerr..ccoomm//aannnnuuaallrreeppoorrtt22000077MARKS AND SPENCER GROUP PLC 7711
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