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Overview Business Review Governance Financial statements
ITE Group plc Annual Report and Accounts 2012 97
26 Share-based payments
The Company operate two share option schemes.
Share option plans
The Company operates a share option plan for all employees of the Group. Options are exercisable at a price equal to the
average quoted market price of the Company’s share on the date of grant. The vesting period is either three or five years
and are exercisable up to ten years from granting. The options are forfeited if the employee leaves the Group before the
options vest.
Performance share plans
The Company operated a Performance Share Plan (‘PSP’) for executives and staff. Awards under the PSP are at an exercise
value of either 1p or nil. Awards can be made to an employee over shares up to a maximum of 100% of base salary each
year based on market value. The vesting period is three years and awards are exercisable up to ten years from the date of
grant. For conditional awards the vesting is automatic on the satisfaction of performance targets. The options are forfeited
if the employee leaves the Group before the options vest. The awards are also subject to a performance target. Further
details of the performance targets can be found in the Report on Remuneration on pages 57 to 58.
Details of the share options outstanding as at 30 September 2012 are as follows:
Number of
share options
2012
Weighted
average
exercise
price (p)
2012
Number of
share options
2011
Weighted
average
exercise
price (p)
2011
Share option plans
Outstanding at beginning of period 4,086,400 132.6 3,754,850 88.5
Granted during the period 361,000 206.0 1,726,500 231.5
Lapsed during the period (213,500) (199.6) (216,500) (139.7)
Exercised during the period (1,669,500) 52.6 (1,178,450) 117.8
2,564,400 189.4 4,086,400 132.6
Performance share plans
Outstanding at beginning of period 4,579,674 1.0 4,755,620 1.0
Granted during the period 1,063,000 1.0 915,850 1.0
Lapsed during the period (21,000) (1.0) (196,500) (1.0)
Exercised during the period (1,361,123) 1.0 (895,296) 1.0
4,260,551 1.0 4,579,674 1.0
The total amount of exercisable options in the share option plans is 433,400 and in the performance share plans is 315,000.
The weighted average share price at the date of exercise for share options exercised during the period was 223p.
The options outstanding at 30 September 2012 had a weighted average exercise price of 72p, and a weighted average
remaining contractual life of 410 days. In 2012, Share Options and Performance Share Plan options were granted on
10 January 2012. The aggregate of the estimated fair value of these options is £0.2 million and £2.0 million respectively.
The inputs into the Black-Scholes model for the instruments issued during the year are as follows:
Performance
share plan
2012
Share
options plan
2012
Performance
share plan
2011
Share
options plan
2011
Weighted average share price 1p 206p 1p 231p
Weighted average exercise price 1p 206p 1p 231p
Expected volatility 43.0% 43.0% 40.4% 40.4%
Expected life 4 years 4 years 4 years 4 years
Risk free rate 0.82% 0.82% 2.21% 2.21%
Dividend yield 2.7% 2.7% 2.6% 2.6%
The Group recognised a total expense of £2.1 million (2011: £1.7 million) related to equity-settled share-based
payment arrangements.