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Marks and Spencer Group plc Annual report and financial statements 2010 Financial statements 96
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 64.
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.
2010 2009
Number of
options
Weighted
average
exercise price
Number of
options
Weighted
average
exercise price
Outstanding at beginning of the period 8,632,783 336.8p 9,623,518 341.0p
Exercised (977,352) 328.0p (142,559) 343.9p
Forfeited (1,159,290) 345.0p (678,888) 340.7p
Expired (98,880) 358.0p (169,288) 550.3p
Outstanding at end of the period 6,397,261 336.8p 8,632,783 336.8p
Exercisable at end of period 6,397,261 336.8p 8,632,783 336.8p
For executive share options exercised during the period, the weighted average share price at the date of exercise was 370.8p
(last year 395.3p).
Outstanding options granted under all Executive Share Option Schemes are as follows:
Number of options
Weighted average remaining
contractual life (years)
Options granted 2010 2009 2010 2009 Option price
1997 Scheme
June 1999 –98,880 – 0.3 358p
2000 Scheme
September 2000 –232 – 1.5 215p
June 2001 65,581 135,989 1.3 2.3 256p
December 2001 18,087 18,087 1.8 2.8 350p
2002 Scheme
June 2002 421,031 579,237 2.3 3.3 350p
November 2002 14,042 47,150 2.7 3.7 353p
June 2003 1,103,230 1,398,584 3.3 4.3 297p
November 2003 11,390 36,109 3.7 4.7 270p
February 2004 33,111 33,111 3.9 4.9 270p
July 2004 3,443,824 4,417,613 4.3 5.3 347p
November 2004 533,164 806,193 4.7 5.7 337p
June 2005 753,801 1,061,598 5.3 6.3 352p
6,397,261 8,632,783 4.1 5.0 337p
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 63. Awards under this scheme
have been made in each year since 2005.
During the year, 7,617,094 shares (last year 6,835,938) were awarded under the plan. The weighted average fair value of the shares awarded
was 290.8p (last year 368.9p).