Peachtree 2013 Annual Report Download - page 128

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Net debt and capital structure continued
122 The Sage Group plc | Annual Report & Accounts 2013
14 Equity
14.1 Ordinary shares
Issued and fully paid
2013
shares
2013
£m
2012
shares
2012
£m
A
t 1 October 1,329,517,570 13.3 1,323,837,836 13.2
Proceeds from shares issued 3,792,153 – 5,679,734 0.1
Share cancelled (159,525,800) (1.6) ––
Share consolidation (59,648,503) – ––
A
t 30 September 1,114,135,420 11.7 1,329,517,570 13.3
Further to the approval by shareholders, the share consolidation became effective on 10 June 2013. The share consolidation replaced every
81 existing ordinary shares of 1 pence each with 77 new ordinary shares of 14/77 pence each.
Potential issues of ordinary shares
Executive Share Option Scheme
Certain senior executives hold a total of 3,492,263 (2012: 6,817,850) options to subscribe for shares in the Company at prices ranging from 134.00p
to 270.00p under the share option schemes approved by shareholders.
Under the above scheme, 3,231,257 1p ordinary shares were issued during the year for aggregate proceeds of £6.7m.
Performance Share Plan
Under the Group’s Performance Share Plan 6,265,091 (2012: 4,362,550) awards were made during the year.
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. During the year no
awards were made.
Savings-related Share Option Scheme
In addition, 757,980 (2012: 1,438,132) options were granted under the terms of the Savings-related Share Option Scheme.
Under the above scheme, 560,896 1p ordinary shares were issued during the year for aggregate proceeds of £1.0m.
14.2 Share-based payments
The total charge for the year relating to employee share-based payment plans was £2.9m (2012: £1.3m), all of which related to equity-settled
share-based payment transactions. After deferred tax, the total charge was £3.0m (2012: £3.0m). A reconciliation of share movements for options
granted after 7 November 2002 to which IFRS 2, “Share-based Payment” is applicable is shown on the following pages.
Executive Share Option Scheme
There have been no grants of executive share options under the 1999 Executive Share Option Scheme (“ESOS”) since June 2008. Long-term
incentive awards are made under The Sage Group plc Performance Share Plan.
The performance targets governing the vesting of options are based on stretching EPS growth measured over a fixed three-year period from
the start of the financial year in which the grant is made. 30% of options will vest at the end of the period if the increase in EPS exceeds the Retail
Prices Index (“RPI”) by 15% (an average of 5% per year) and 100% of those options will vest at that time only if the RPI is exceeded in that period
by 27% (an average of 9% per year). Between those targets, options will vest on a straight-line basis. If those targets are not met at the end of the
three-year period, then no further retesting of the performance criteria will be undertaken and the options will lapse.
Options were valued using the Black-Scholes option-pricing model. The expected volatility is based on historical volatility over the last four years.
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 option life.
126 The Sage Group plc | Annual Report & Accounts 2013