Marks and Spencer 2008 Annual Report Download - page 77

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12 Share-based payments continued
C Performance Share Plan
The Performance Share Plan is the primary long-term incentive plan for approximately 100 of the most senior managers and
was first approved by shareholders in 2005. Under the plan, annual awards, based on a percentage of salary, may be offered.
The extent to which the awards vest is based on adjusted earnings per share growth over three years. The value of any dividends
earned on the vested shares during the three years will also be paid on vesting. Further details are set out in the Remuneration
report on page 49. Awards under this scheme have been made in each year since 2005.
During the year, 3,414,413 shares (last year 3,511,040) were awarded under the plan. The weighted average fair value of the
shares awarded was 704.0p (last year 572.9p).
D Deferred Share Bonus Plan
The Deferred Share Bonus Plan was introduced in 2005/06 as part of the annual bonus scheme for approximately 450 of the
most senior managers. As part of the bonus scheme, the managers are required to defer a proportion of any bonus paid into
shares which will be held for three years. There are no further performance conditions on these shares, other than continued
employment, and the value of any dividends earned during the deferred period will be paid on vesting.
During the year, 2,182,379 shares were awarded under the plan in relation to the 2006/07 annual bonus. The fair value of the
shares awarded was 706.6p.
E Restricted Share Plan
The Restricted Share Plan was established in 2000 as part of the reward strategy for retention and recruitment of senior managers
who are vital to the success of the business. The plan operates for senior managers below executive director level. Awards under
the plan are made as part of ongoing reviews of reward packages, and for recruitment. The shares are held in trust for a period
of between one and three years, at which point they are released to the employee, subject to them still being in employment.
The value of any dividends earned during the restricted period will also be paid at the time of vesting.
During the year, 328,165 shares (last year 38,622) have been awarded under the plan. The weighted average fair value of the
shares awarded was 604.6p (last year 578.0p).
F United Kingdom Share Incentive Plan
The Share Incentive Plan is a discretionary, all-employee plan, approved by HMRC, under which Freeshares may be allocated
by the Company. The last award was made in June 2003, which will vest in June 2008.
G Share Matching Deal Plan
The Share Matching Deal Plan was introduced in 2006 for those employees who were eligible to receive a cash-only bonus.
The scheme was not open to those employees who participated in the Deferred Share Bonus Plan. The Plan allows employees
to invest a proportion of their bonus in shares of the Company. These investment shares must be held by the participant for
three years, during which time they will receive dividends. At the end of the three-year holding period, if the participant is still
in employment with the Company, and still holds the investment shares, they will receive one matching share for every four
that they bought.
During the year, 26,603 (last year 41,086) matching shares have been awarded under the Share Matching Deal Plan, at a fair
value of 609.3p (last year 596.4p).
H Marks and Spencer Employee Benefit Trust
The Marks and Spencer Employee Benefit Trust (the Trust) holds 8,795,896 (last year 4,767,449) shares with a book value
of £60.0m (last year £28.1m) and a market value of £34.9m (last year £32.3m). These shares were acquired by the Trust in
the market. In addition, the Trust has entered into a call option to purchase up to 8.1 million of the Company’s shares. The
Trust used funds provided by Marks and Spencer plc to meet the Group’s obligations. Awards are granted to employees at
the discretion of Marks and Spencer plc and shares are awarded to employees by the Trust in accordance with the wishes
of Marks and Spencer plc under senior executive share schemes, including the Restricted Share Plan. Dividends are waived
on all of these plans except for the Deferred Bonus Share Plan and Restricted Share Plan where dividends are paid via a
Dividend Reinvestment Plan for awards made in the form of forfeitable shares.
marksandspencer.com/annualreport08 MARKS AND SPENCER GROUP PLC 75
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