Peachtree 2012 Annual Report Download - page 116

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Net debt and capital structure continued
14 Equity continued
14.2 Share-based payments continued
The Sage Group Restricted Share Plan
The Group’s Restricted Share Plan is a long-term incentive plan used in limited circumstances and usually on a one-off basis, under which contingent share
awards are made, usually with specific performance conditions. Executive Directors are not permitted to participate in the plan and shares are purchased in the
market to satisfy vesting awards.
Grant date
December
2011
June
2012
Share price at grant date £2.87 £2.66
Exercise price £0.00 £0.00
Number of employees 1 1
Shares under award 369,818 350,018
Vesting period (years) 2 3
Expected volatility 23% 23%
Award life (years) 2 3
Expected life (years) 2 3
Risk free rate 0.4% 0.4%
Expected dividends expressed as a dividend yield 0.0% 0.0%
Fair value per award £2.874 £2.655
Options were valued using the Black-Scholes option-pricing model. The expected volatility is based on historical volatility over the last two or three years,
consistent with the award life. The expected life is the average expected period to exercise. The risk free rate of return is the yield on zero-coupon UK
government bonds of a term consistent with the assumed award life.
A reconciliation of award 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 – – ––
Awarded 720 – ––
Outstanding at 30 September 720 – ––
Exercisable at 30 September – – ––
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
N/A – 720 1.9 1.9 – – – –
The Sage Group Savings-related Share Option Plan (the “SAYE Plan”)
In February 1996, the Company introduced a HM Revenue & Customs (“HMRC”) approved savings-related share option scheme allowing all UK employees to
apply for an option to acquire ordinary shares in the Company (“Shares”) at a price per Share which was not less than 80% of the market value of those Shares
when invitations for options were made. The acquisition of the Shares was funded by the proceeds of a savings account with a bank or building society. The
original scheme adopted in 1996 continued in accordance with its terms for 10 years and expired in February 2006. A new scheme was approved by the
members at the Annual General Meeting held on 2 March 2006.
Eligibility
All UK employees, including executive directors, of the Company and its participating subsidiaries who have completed at least one year’s continuous service
and are assessable for employment income tax are eligible to participate in the SAYE Plan. The directors may offer participation to other employees and may
alter the length of service required to qualify to a different period, not exceeding seven years.
114