Marks and Spencer 2010 Annual Report Download - page 101

Directors’ report p01 
Financial statements 
Other information p117 
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12 Share-based payments continued
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, 98,515 shares (last year 288,656) have been awarded under the plan in relation to the annual bonus. The fair value of
the shares awarded was 286.1p (last year 381.6p). As at 3 April 2010, 307,309 shares (last year 3,084,935) were outstanding under
the scheme.
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, 342,600 shares (last year 1,755,667) have been awarded under the plan. The weighted average fair value of the shares
awarded was 348.6p (last year 337.8p).
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. As at 3 April 2010, 22,000 shares (last year 53,000) were
outstanding under the scheme.
H. Republic of Ireland Save As You Earn Scheme
Sharesave, the Company’s Save As You Earn Scheme was introduced in 2009 to all employees in the Republic of Ireland for a 10 year
period, after approval by shareholders at the 2009 AGM. The scheme is subject to Irish Revenue rules which limit the maximum monthly
saving to €500 per month. The Company chose in 2009 to set a monthly savings cap of €320 per month to align the maximum savings
amount allowed within the UK scheme. When the savings contract is started, options are granted to acquire the number of shares that the
total savings will buy when the contract matures, at a discounted price set at the start of the scheme. The price at which the options may be
offered is 80% of the average mid-market price for three consecutive days preceding the offer date. Options cannot normally be exercised
until a minimum of three years has elapsed.
During the year, 287,235 options were granted, at a fair value of 113.1p.
I. Marks and Spencer Employee Benefit Trust
The Marks and Spencer Employee Benefit Trust (the Trust) holds 7,299,755 (last year 4,203,250) shares with a book value of £24.1m
(last year £27.8m) and a market value of £27.1m (last year £11.1m). These shares were acquired by the Trust in the market. 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.