Annual Report for the year ended 31 December 2008

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19. 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 94 The evoluTion Group plc AnnuAl reporT & AccounTs 2008 2008 2007 Average exercise price Outstanding Average exercise price Outstanding (pence per share) options (pence per share) options At 1 January 39.30 7,191,565 33.39 8,504,065 Granted 1.00 500,000 – – exercised 41.40 (500,000) 1.00 (1,312,500) employee relocated to another group company 1.00 550,000 – – At 31 December 33.97 7,741,565 39.30 7,191,565 The weighted average market price of the shares issued during the year upon exercise was £1.02 (2007: £1.43). The date range over which the above options may be exercised is described in the relevant scheme detailed below. The overall weighted average life of the remaining options is 4.04 years (2007: 4.28 years). All options in the above table have a life from grant of 10 years. in the below tables evG refers to The evolution Group plc. The company currently operates one share trust. The evolution Group plc employees’ share Trust (the “Trust”) administers The evolution Group plc share schemes and is managed by the sanne Trust. 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) 22/12/06 14/11/03-30/12/08 29/06/01 11/05/01 Weighted average market value at grant date (pence) 125.50 101.94 58.11 58.67 Weighted average exercise price (pence) n/A 1.00 52.30 58.67 number of awards outstanding 6,000,000 3,150,000 1,500,000 3,091,565 vesting period (months) 30 22-36 36 36 expected share price volatility (%) 24.74 - 38.27 n/A 0-73 n/A Dividend yield (%) 0.96 0.63 0.00 n/A Average life remaining (years) n/A 6.41 2.49 2.36 number of options/awards expected to vest – 100% 100% 100% Average fair value per option/award granted (pence) 40.00 103.35 – n/A income statement charge (£) 395,000 295,000 – – note (1) represents the period over which the performance condition (as described below) can be met at which point all awards meet the vesting criteria.
19. emPloYee sHaRe sCHemes (CONTINuED) The share options outstanding at the end of the year have a weighted average exercise price and expected remaining life as follows: 2008 2007 Weighted Weighted Weighted Weighted Number average average Number average average Range of exercise prices of share exercise price expected of share exercise price expected (pence) options (pence) remaining life options (pence) remaining life 1.00 3,150,000 1.00 6.41 2,100,000 1.00 6.01 52.3 1,500,000 52.30 2.49 2,000,000 49.58 3.89 58.67 3,091,565 58.67 2.36 3,091,565 58.67 3.36 7,741,565 7,191,565 The Evolution Group Plc 2006 Performance Share Plan (“PSP”) This plan was approved by shareholders of the parent company on the 25 May 2006 at its Annual General Meeting. Eligibility Any Director of the company, or a Group company, and any employee of the company, or a Group company, may be invited to participate in the plan. Nature of Plan The plan provides for participants to be awarded free shares in the parent company subject to achievement of specific performance criteria. Performance criteria The performance conditions determine the number of shares with reference to the average mid-market share price as derived from the Daily official list of the london stock exchange on all dealing days over any period of 60 consecutive days during the performance period, which is from 1 April 2006 to 31 March 2009. The prescribed performance growth is derived from a base share price of £1.42 at 31 December 2005. if the average share price equals or exceeds £2.13 (an increase of 50% from base price) within the performance period then an award may be exercised over one-third of the shares granted. however if the average share price equals or exceeds £2.84 (an increase of 100% from base price) then the full award of the shares granted may take place. Additionally, the satisfactory employment by the individual within a Group company throughout the period following grant of an award is required. The earliest exercise date is 30 June 2009. Scheme Limits The number of shares, which may be issued to satisfy awards under this plan is limited 25,000,000 shares. The scheme additionally restricts the maximum number of shares available to Directors of the company to 10,000,000 shares. individuals who fall within the definition of a Director of the company before 31 December 2006 are not eligible for awards after 31 December 2006. An amount of 2,000,000 shares not awarded to Directors of the company before 31 December 2006 up to the 10,000,000 share limit have become available to award to employees or to future Directors of the company. Awards granted At 31 December 2008, awards of 6,000,000 shares were outstanding. Following vesting the shares can be exercised between 30 June 2009 and 30 June 2016 subject to achievement of relevant performance conditions. The Evolution Group Plc 2002 Executive Share Incentive Plan This plan was approved by the Board on 13 March 2002 and it was approved by shareholders on 10 october 2003. Eligibility Any Director of the company, or a Group company, and any employee of the company, or a Group company, may be invited to participate in the plan. Nature of Plan The plan provides for participants to be awarded shares in the company at their nominal cost. subject to achievement of performance criteria, awards of shares convert into call rights over such shares. The plan is operated in conjunction with an employee benefit trust on three levels. it is operated as a standalone plan and it is also used as the framework for the Key performers share incentive plan (“Kpsip”) introduced for employees of evolution securities limited in January 2003, and the Market Making and Trading share incentive plan (“MMTsip”), which was introduced for the market making team of esl in January 2005, where it forms the method of delivery of such awards made within the Kpsip framework. notes to tHe FinanCial statements CONTINuED FOR THE YEAR ENDED 31 DECEMBER 2008 95
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Yesterday Today Tomorrow... ANNUAL
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FINANCIAL ANd OPERATIONAL HIGHLIGHT
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Balance Sheet strength and cash bal
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evolution securities Evolution secu
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Corporate Finance Evolution securit
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Wdb capital The Group’s investmen
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EARNINGS PER SHARE ON TOTAL OPERATI
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evolution securities’ income anal
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other activities The Group’s othe
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Lord macLaurin of Knebworth, dL (72
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principal risks and uncertainties T
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share capital Details of the change
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The Directors consider that in prep
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The Chief Executive, Alex snow, is
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The Committee observed that during
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appropriate and comprehensive proce
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The Board has delegated to the Remu
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The concept of a bonus ceiling does
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non-executive directors Non-executi
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On 8 April 2009, Alex snow was awar
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We have audited the Consolidated Fi
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ASSETS 2008 2007 Note £’000 £
Page 45 and 46: 2008 2007 £’000 £’000 (loss)/
Page 47 and 48: shareholding of more than one half
Page 49 and 50: ) Distribution channels and custome
Page 51 and 52: (b) Share-based plans The Group’s
Page 53 and 54: Risk Reporting The Group Board rece
Page 55 and 56: Neither past Past due but not impai
Page 57 and 58: By business segment (continued) The
Page 59 and 60: 6. otHeR inCome Restated 2008 2007
Page 61 and 62: 11. aUditoRs’ RemUneRation During
Page 63 and 64: 14. inCome taX eXPense (CONTINuED)
Page 65 and 66: 18. intanGiBle assets notes to tHe
Page 67 and 68: 20. deFeRRed inCome taX (CONTINuED)
Page 69 and 70: 24. tRadinG PoRtFolio assets notes
Page 71 and 72: 31. Consolidated moVement in sHaReH
Page 73 and 74: 33. CasH FloW FRom oPeRatinG aCtiVi
Page 75 and 76: 38. emPloYee sHaRe sCHemes Movement
Page 77 and 78: 38. emPloYee sHaRe sCHemes (CONTINu
Page 79 and 80: THE EVOLuTION GROuP PLC PARENT COMP
Page 81 and 82: ASSETS ComPanY BalanCe sHeet AS AT
Page 83 and 84: statement oF ReCoGnised inCome and
Page 85 and 86: 1. aCCoUntinG PoliCies (CONTINuED)
Page 87 and 88: 2. FinanCial instRUments and RisK m
Page 89 and 90: 2. FinanCial instRUments and RisK m
Page 91 and 92: 5. inVestment in sUBsidiaRies notes
Page 93 and 94: 10. CasH and CasH eQUiValents 2008
Page 95: 17. Post BalanCe sHeet eVents There
Page 99 and 100: 19. emPloYee sHaRe sCHemes (CONTINu
Page 101 and 102: FoR YoUR notes 99
Page 103 and 104: DesiGneD AnD proDuceD BY BesT&co. l
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Annual Report for the year ended 31 December 2008

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