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74 MARKS AND SPENCER GROUP PLC
Notes to the financial statements
continued
12 Share-based payments continued
B Executive Share Option Scheme
Under the terms of the Executive Share Option Scheme, last approved by shareholders in 2005, the Board may offer options
to purchase ordinary shares in the Company to executive directors and senior managers at the market price on a date to be
determined prior to the date of the offer. No further options may be granted under any schemes other than the 2005 scheme.
No awards have been made under the 2005 scheme. Further details are set out in the Remuneration report on page 50.
Performance targets are assessed over a three-year period from the date of grant with no ability to retest any grants. Once
options have vested they can be exercised during the period up to 10 years from grant date.
2008 2007
Weighted Weighted
Number average Number average
of options exercise price of options exercise price
Outstanding at beginning of the period 12,017,117 341.2p 18,135,466 333.5p
Exercised (2,235,209) 341.0p (5,522,018) 316.6p
Forfeited (152,698) 348.6p (589,781) 334.8p
Expired (5,692) 527.0p (6,550) 458.0p
Outstanding at end of the period 9,623,518 341.0p 12,017,117 341.2p
Exercisable at end of the period 8,444,937 339.4p 3,537,471 328.4p
For executive share options exercised during the period, the weighted average share price at the date of exercise was 645.5p
(last year 632.3p).
The resulting fair value is expensed over the expected service period of five years on the assumption that 30% of options will
lapse over the service period as employees leave the Company.
Outstanding options granted under all Executive Share Option Schemes are as follows:
Weighted average remaining
Number of options contractual life (years)
Options granted 2008 2007 2008 2007 Option price
1984 Scheme
June 1997 –5,692 –0.2 527p
1997 Scheme
June 1998 161,863 247,778 0.2 1.2 557p
November 1998 7,425 7,425 0.6 1.6 404p
June 1999 98,880 127,521 1.2 2.2 358p
2000 Scheme
September 2000 232 3,445 2.5 3.4 215p
June 2001 135,989 196,303 3.3 4.2 256p
December 2001 71,658 74,161 3.7 4.7 350p
2002 Scheme
June 2002 659,465 760,394 4.2 5.2 350p
November 2002 47,150 66,980 4.7 5.6 353p
June 2003 1,502,053 1,975,461 5.2 6.2 297p
November 2003 36,109 77,078 5.7 6.6 270p
February 2004 33,111 33,111 5.8 6.8 270p
July 2004 4,831,318 6,236,497 6.3 7.3 347p
November 2004 859,684 868,599 6.7 7.6 337p
June 2005 1,178,581 1,336,672 7.2 8.2 352p
9,623,518 12,017,117 5.9 6.8 335p