Annual Report and Accounts 2012 - Scapa

Notes on the Accounts continued
27. Share options
70 Scapa Group plc Annual Report and Accounts 2012
Number of shares
2012
Weighted average
exercise price Number of shares
2011
Weighted average
exercise price
Outstanding at the beginning of the year 7,535,146 10.2p 6,667,827 32.9p
Granted during the year 1,992,418 17.6p 4,000,000 –
Exercised during the year 911,096 13.2p 333,015 23.2p
Forfeited and lapsed during the year 1,642,724 21.6p 2,799,666 48.2p
Outstanding at the end of the year 6,973,744 9.2p 7,535,146 10.2p
There are no outstanding share options exercisable at the end of the year. The weighted average exercise price includes nil cost
options.
Share options were granted during the year under the 2011 Performance Share Plan to the two Executive Directors and to certain
senior employees. The inputs into the Black Scholes model are as follows:
1 Dec 2011
(Employees)
27 Jun 2011
(Employees)
27 Jun 2011
(Directors)
8 Jun 2010
(Employees)
8 Jun 2010
(Directors)
29 Nov 2010
(Employees)
29 Nov 2010
(Directors)
Number of share options granted 300,000 420,000 450,000 1,500,000 1,000,000 750,000 750,000
Number of share options outstanding at
31 March 2012 300,000 305,000 450,000 775,000 1,000,000 750,000 750,000
Weighted average share price 49.5p 58.3p 58.3p 13.0p 13.0p 28.0p 28.0p
Weighted average exercise price – – – – – – –
Expected life 36 months 36 months 36 months 36 months 36 months 36 months 36 months
For zero exercise price share options, the fair value of the share options approximates to the share price at the date of grant.
During the year 822,418 share options were issued under the Sharesave Option Plan. The inputs into the Black Scholes model
are as follows:
3-Year Plan
(Employees)
3-Year Plan
(Directors)
5-Year Plan
(Employees)
Number of share options 591,437 42,252 188,729
Weighted average share price 54.5p 54.5p 54.5p
Weighted average exercise price 42.6p 42.6p 42.6p
Expected volatility 54.3% 54.3% 54.3%
Expected life 36 months 36 months 60 months
Risk-free rate 0.56% 0.56% 1.03%
The Group recognised total expenses of £0.4m (2011: £0.2m) related to equity-settled share-based payment transactions. This
expense includes the charge for the new options granted during the year net of the release of charge for the options for which it
has been concluded that vesting criteria will not be met.
Executive Share Options (2004 Plan)
The Company operates an Executive Share Option plan for senior executives in the UK and overseas, namely the Scapa Group plc
2004 Executive Share Option Plan which was approved by shareholders at the Company’s Annual General Meeting on 22 July 2004.
The 2004 Plan provides a potential reward in shares for improvement in Company performance reflected in the share price.
The option provides the opportunity to purchase shares at a fixed exercise price dependent on achievement of predetermined
performance targets.
The 2004 Plan has two parts: an Unapproved Discretionary Share Option Plan (the ‘Unapproved Part’) and an addendum containing
an Inland Revenue approved Discretionary Share Option Plan (the ‘Approved Part’). The Approved Part of the 2004 Plan can be used
to grant options to UK residents with an aggregate value not exceeding £30,000. All other grants of options over and above the
£30,000 threshold and those made to overseas employees are granted under the Unapproved Part of the 2004 Plan. Options
only become exercisable, in normal circumstances, three years after the date of grant and then may only be exercised if certain
performance criteria are met. Options remain exercisable until the tenth anniversary of their date of grant, after which they lapse.
The ability to exercise the option is dependent upon the achievement of predetermined performance targets based on growth
in adjusted earnings per share (EPS) over changes in the retail price index (RPI).