Peachtree 2012 Annual Report Download - page 114

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Net debt and capital structure continued
14 Equity continued
14.2 Share-based payments continued
A reconciliation of option movements over the year is shown below:
2012 2011
Number
’000s
Weighted
average
exercise
price
£
Number
’000s
Weighted
average
exercise
price
£
Outstanding at 1 October 10,766 2.17 22,888 2.13
Forfeited (380) 2.36 (8,348) 2.18
Exercised (3,568) 2.07 (3,774) 1.90
Outstanding at 30 September 6,818 2.21 10,766 2.17
Exercisable at 30 September 6,818 2.21 10,486 2.17
2012 2011
Weighted
average
exercise
price
£
Number
of shares
’000s
Weighted average
remaining life years
Weighted
average
exercise
price
£
Number
of shares
’000s
Weighted average
remaining life years
Range of exercise prices
£ Expected Contractual Expected Contractual
1.34 – 2.70 2.21 6,818 – 2.8 2.17 10,766 – 3.7
The weighted average share price during the period for options exercised over the year was 294.05p (2011: 282.20p).
The Sage Group Performance Share Plan
The Performance Share Plan (the “Plan”) was approved by shareholders at the Annual General Meeting in 2005 and amended at the Annual General Meeting in
2009. Annual grants of performance shares will normally be made to executive directors and senior executives across the Group after the preliminary declaration
of the annual results.
Following the amendments to the scheme, annual awards under the Plan are limited to shares worth up to 300% of base salary. In practice, annual grants to
executive directors are limited to shares with a maximum value on award of 210% of base salary except in exceptional circumstances, such as a promotion or
recruitment or to reflect local market practice.
The performance shares are subject to performance conditions on a sliding scale based on EPS. 25% of the award will vest at the end of the period if the
increase in EPS exceeds RPI by 9% (an average of 3% per year); 100% of the award will vest at that time only if RPI is exceeded in that period by 27% (an
average of 9% per year). Between those targets, awards will vest on a straight-line basis, and if those targets are not met there is no opportunity for re-testing.
Awards are then subject to a TSR “multiplier” whereby the level of vesting based on EPS achievement will be adjusted according to TSR performance over the
same three-year period compared with a group of international software and computer services companies.
The comparator group for awards made in 2012 comprised the following companies:
− Adobe Systems − Cegid − Logica − Salesforce.com
− ARM Holdings − Dassault Systèmes − Micro Focus International − SAP
− Blackbaud − Exact − Microsoft − Software AG
− Cap Gemini − Intuit − Oracle
If Sage’s TSR is ranked at lower quartile in the group, the multiplier is 0.75. If Sage’s TSR is ranked at median in the group, the multiplier is 1. If Sage’s TSR is
ranked at upper quartile in the group, then the multiplier is 1.5. Straight-line pro-rating applies between 0.75 and 1, and between 1 and 1.5, but the multiplier
cannot be higher or lower than these figures.
Awards were valued using the Monte Carlo option-pricing model. Performance conditions were included in the fair value calculations. The fair value per award
granted and the assumptions used in the calculation are as follows:
112