Annual Report for the year ended 31 December 2008

38. emPloYee sHaRe sCHemes
Movements in the number of share options and their weighted average exercise prices are as follows:
notes to tHe FinanCial statements CONTINuED
FOR THE YEAR ENDED 31 DECEMBER 2008
2008 2007
Average exercise price Outstanding Average exercise price Outstanding
(pence per share) options (pence per share) options
At 1 January 23.20 28,667,197 25.04 27,992,334
Granted 1.00 7,352,362 1.00 8,535,410
exercised 4.38 (6,501,121) 4.15 (4,316,021)
Forfeited 5.72 (1,950,066) 7.75 (3,544,526)
AT 31 DECEMBER 22.93 27,568,372 23.20 28,667,197
The weighted average market price of the shares issued during the year upon exercise was £1.01 (2007: £1.41).
The date range over which the above options may be exercised is described in the relevant scheme details below. The overall weighted average life of the
remaining options is 6.95 years (2007: 7.34 years).
All options in the above table have a life from grant of 10 years.
options under the share incentive schemes are valued using a Black-scholes model adjusted for dividends according to those declared by the company.
The company estimates the number of options likely to vest and expenses that value over the relevant period. volatility has been estimated by taking the
historical volatility in the company’s share price over a three year period.
in the case of awards of call rights, which have an exercise price of 1p per ordinary share, the fair value is based on the market value at the time of grant
discounted by the dividend yield over the expected life.
The number of options and share awards outstanding by issue date and exercise price, together with the vesting periods, the fair values, and the assumptions
used to calculate it, and the actual remaining contractual life as at 31 December 2008 are as follows:
EVG 2006 EVG 2002 EVG 2001 EVG 2000
Performance Share Executive Share Executive Share Executive Share
plan Option Scheme Option Scheme Option Scheme
Grant dates (1) 09/06/06-26/01/07 29/04/02-30/12/08 29/06/01-03/11/06 11/05/01
Weighted average market value at grant date (pence) 144.85 122.46 103.80 58.67
Weighted average exercise price (pence) n/A 1.00 93.42 58.67
number of awards outstanding 25,000,000 19,863,532 4,613,275 3,091,565
vesting period (months) 29-37 4-36 24-36 16-36
expected share price volatility (%) 24.74-38.27 n/A 0-73 n/A
Dividend yield (%) 0.84 1.14 0.48 n/A
Average life remaining (years) n/A 8.00 5.50 2.36
number of options/awards expected to vest n/A 100% 100% 100%
Average fair value per option/award granted (pence) 46.55 118.79 27.32 n/A
income statement charge (£) 436,000 11,180,000 113,000 –
note
(1) represents the period since when the performance condition (as described below) can be met at which point all awards meet the vesting criteria.
in the above table evG refers to The evolution Group plc.
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