Full Annual Report - Inchcape

Section
Three
Financial
statements
4 Share-based payments
The terms and conditions of the Group’s share-based payment plans are detailed in the Board report on remuneration.
The charge arising from share-based payment transactions during the year is £3.8m (2008 – credit of £0.9m), all of which
is equity-settled.
The Other Share Plans disclosures below include other share-based incentive plans for senior executives and employees.
The following table sets out the movements in the number of share options and awards during the year:
Weighted average exercise price* Executive Share Option Plan Save As You Earn Plan Other Share Plans
2009 2008 2009 2008 2009 2008 2009 2008
Outstanding at 1 Jan £3.97 £4.04 11,820,309 8,627,181 2,424,699 2,244,154 1,550,122 964,976
Granted – £3.50 – 4,256,371 – 2,409,067 – 947,752
Exercised – £2.83 – (740,925) – (309,778) (507) (346,301)
Lapsed £4.17 £3.44 (2,888,972) (322,318) (575,934) (1,918,744) (260,306) (16,305)
Outstanding at 6 April £3.90 8,931,337 1,848,765 1,289,309
Outstanding following
Rights Issue £0.67 52,982,611 10,990,010 12,893,090
Granted £0.21 86,337,398 32,295,387 2,445,747
Exercised £0.58 (154,368) – (1,181,178)
Lapsed £0.58 (9,706,442) (7,569,130) (1,568,961)
Outstanding at 31 Dec £0.35 £3.97 129,459,199 11,820,309 35,716,267 2,424,699 12,588,698 1,550,122
Exercisable at 31 Dec £0.50 14,660,414 479,911 19,200
* The weighted average exercise price excludes awards made under the Deferred Bonus Plan as there is no exercise price attached to these share awards.
Included in the table above are 943,008 (2008 – 1,097,371 restated for Rights Issue) share options outstanding at 31 December
granted before 7 November 2002 which have been excluded from the share-based payments charge in accordance with the IFRS 2
transitional provisions.
The weighted average remaining contractual life for the share options outstanding at 31 December 2009 is 6.9 years (2008 – 6.4 years).
The range of exercise prices for options outstanding at the end of the year was £0.08 to £0.97 (2008 – £0.08 to £0.97 restated for Rights
Issue). See note 24 for further details.
The fair value of equity-settled share options granted is estimated as at the date of grant using a binomial model, taking into account
the terms and conditions upon which the options were granted. The following table lists the main inputs to the model for shares granted
during the years ended 31 December 2009 and 31 December 2008:
Executive Share Option Plan Save As You Earn Plan Other Share Plans
2009 2008 2009 2008 2009 2008
Weighted average share price at grant date £0.20 £4.12 £0.29 £2.99 £0.25 £4.10
Weighted average exercise price * £0.20 £0.69 £0.23 £0.40 n/a n/a
Vesting period 3.0 years 3.0 years 3.0 years 3.0 years 3.0 years 3.0 years
Expected volatility 80.0% 25.8% 80.0% 31.7% n/a n/a
Expected life of option 3.5 years 4.0 years 3.2 years 3.2 years 3.0 years 3.0 years
Weighted average risk free rate 2.1% 4.0% 1.9% 4.3% n/a 4.0%
Expected dividend yield 1.0% 3.0% 1.0% 3.0% n/a 3.0%
Weighted average fair value per option £0.11 £0.82 £0.13 £0.61 £0.25 £4.30
* The weighted average exercise prices for 2008 have been restated for Rights Issue.
The expected life and volatility of the options are based upon historical data.
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