Peachtree 2013 Annual Report Download - page 130

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Net debt and capital structure continued
124 The Sage Group plc | Annual Report & Accounts 2013
14 Equity continued
14.2 Share-based payments continued
The final third of the award is the performance target relating to TSR. Where the Company’s TSR is between median and upper quartile, the TSR
vesting percentage will be calculated on a straight-line pro-rata basis between 6.7% and 26.7% and where the Company’s TSR is between upper
quartile and upper decile, the TSR vesting percentage will be calculated on a straight-line pro-rata basis between 26.7% and 33.3% The TSR vesting
percentage may only exceed 26.7% (“Stretch” level) if performance against either the EPS target or the organic revenue growth target is also at
“Stretch” level.
The comparator group for awards in 2013 is the companies comprised in the FTSE100 Index at the start of the performance period, excluding
financial services and extraction companies.
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:
Grant date
March
2012
March
2012
June
2012
March
2013
March
2013
June
2013
August
2013
August
2013
Share price at grant date £2.98 £2.98 £2.60 £3.46 £3.46 £3.34 £3.52 £3.52
Exercise price £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00
Number of employees 8 154 1101 147 1 1 1
Shares under award 2,083,735 2,067,290 12,538 5,248,868 801,480 186,400 23,619 4,724
V
esting period (years) 3 3 3 3 3 3 3 3
Expected volatility 24% 24% 24% 23% 23% 23% 22% 22%
A
ward life (years) 3 3 3 3 3 3 3 3
Expected life (years) 3 3 3 3 3 3 3 3
Risk free rate 0.47% 0.47% 0.47% 0.26% 0.26% 0.59% 0.66% 0.66%
Expected dividends expressed as a
dividend yield 0.0% 0.0% 0.0% 0.00% 0.00% 0.00% 0.00% 0.00%
Fair value per award £2.415 £2.979 £2.979 £2.753 £3.460 £2.637 £2.737 £3.520
The expected volatility is based on historical volatility over the last three 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 award life.
A reconciliation of award movements over the year is shown below:
2013 2012
Number
’000s
Weighted
average
exercise
price
£
Number
’000s
Weighted
average
exercise
price
£
Outstanding at 1 October 19,128 – 27,304 –
A
warded 6,265 – 4,363 –
Forfeited (8,654) – (6,694) –
Exercised – – (5,845) –
Outstanding at 30 September 16,739 – 19,128 –
Exercisable at 30 September – – ––
2013 2012
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 – 16,739 1.4 1.4 – 19,128 1.3 1.3
128 The Sage Group plc | Annual Report & Accounts 2013