Marks and Spencer 2009 Annual Report Download - page 101

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97
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 66. Awards under this
scheme have been made in each year since 2005.
During the year, 6,835,938 shares (last year 3,414,413) were awarded under the plan. The weighted average fair value of the shares
awarded was 368.9p (last year 704.0p).
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 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, 288,656 shares (last year 2,182,379) were awarded under the plan in relation to the annual bonus. The fair value of the
shares awarded was 381.6p (last year 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, 1,755,667 shares (last year 328,165) have been awarded under the plan. The weighted average fair value of the shares
awarded was 337.8p (last year 604.6p).
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 vested 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.
No shares were awarded under the Share Matching Deal Plan during the year.
H. Marks and Spencer Employee Benefit Trust
The Marks and Spencer Employee Benefit Trust (the Trust) holds 4,203,250 (last year 8,795,896) shares with a book value of £27.8m (last
year £60.0m) and a market value of £11.1m (last year £34.9m). These shares were acquired by the Trust in the market. In addition, the Trust
has entered into a call option to purchase up to 6.3 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 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.