Jupiter Annual Report 2010 - Jupiter Asset Management

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Financial statements – continuation | Notes to the financial statements 32. Earnings per share continued After the Listing the number of ordinary shares in issue is 457.7m. For the purposes of calculating EPS, the share capital of the Company is calculated as the weighted average number of ordinary shares in issue over the periods reported. The weighted average number of ordinary shares outstanding during the period used for the purposes of calculating EPS is as follows: Weighted average: 2010 Number m 2009 Number m Issued share capital 368.7 268.8 Less own shares held (conditional awards) (164.2) (187.5) Weighted average number of ordinary shares after share restructuring for the purpose of basic earnings per share 204.5 81.3 Add back weighted average number of dilutive shares 88.2 187.5 Weighted average number of ordinary shares after share restructuring for the purpose of diluted earnings per share 292.7 268.8 The weighted average number of own shares is deducted from the weighted average number of ordinary shares. Own shares are shares held in an employee benefit trust for the benefit of employees under the vesting, lock-in and other incentive arrangements in place. 2010 Pence 2009 Pence Basic 10.8 10.6 Diluted 7.6 3.2 33. Share based payments Group The Group engages in equity settled share based payment transactions in respect of services receivable from certain employees, granting employees the right to acquire either shares or options over shares, subject to certain vesting conditions. Prior to the Listing in June 2010, these transactions were in respect of B shares, which were then converted into ordinary shares at a ratio of one to fifty. Following the Listing the transactions were in respect of ordinary shares. Shares and options vest on the occurrence of a specified event under the rules of the plan. Certain shares and options are subject to performance conditions. The share based payment arrangements shown within these accounts are: ■■Options granted over B shares These options were granted to certain employees prior to Listing in June 2010 and allow them to acquire shares at nominal value subject to satisfying certain vesting and performance conditions. The terms of the options allow individuals to make a payment to the Company entitling them to take up rights to shares between one and five years after the grant date, depending on the individual award. The expense, excluding national insurance, recognised in the Group’s accounts in respect of 2010 is £5.8m (2009: £nil). ■■Sharesave Plan 2010 All eligible UK employees may participate in the Group’s Sharesave Plan, which was introduced in 2010. Under the terms of this scheme, employees may enter into contracts to save up to £250 per month and, at the expiry of a fixed three or five year term, have the option to use these savings to acquire shares in the Company at a discounted price, calculated under the rules of the scheme (currently 20 per cent. discount to the market price at the date of award). Participants in the scheme have six months from the date of vesting to exercise their option. The expense, excluding national insurance, recognised in the Group’s accounts in respect of 2010 is £0.1m (2009: £nil). ■■Share awards Certain employees were awarded rights to shares during 2010, which subject to certain performance conditions, vest over the three years following the date of grant. The expense, excluding national insurance, recognised in the Group accounts in respect of 2010 is £0.4m (2009: £0.3m). ■■Deferred Bonus Plan All employees of the Group who are eligible for a bonus over a certain level, as determined by the Remuneration Committee, are required to participate in the Deferred Bonus Plan which, for retention purposes, provides for compulsory deferral of a proportion of bonus. The deferred award is granted on nil cost options over the Company’s shares, at a price calculated as the market price immediately prior to the date of the award. The awards in respect of this plan will be granted after the year end and, as such, there are no options shown in the below tables as being in existence at the balance sheet date. The expense, excluding national insurance, recognised in the Group’s accounts in respect of 2010 is £1.5m (2009: £nil). Annual Report & Accounts 2010 94 Jupiter Fund Management plc
Financial statements – continuation | Notes to the financial statements 33. Share based payments continued ■■The weighted average fair value per option granted/share award during the year is calculated as follows: The options granted over B shares were granted at the nominal price of the B shares which gives them the characteristics of nil cost options and therefore the fair value of these awards is based on the derived market price as at the date of the award. The fair value recognised in the results for the Sharesave Plan 2010 has been calculated at the date of grant using a Black-Scholes model with inputs as at that date, making reasonable assumptions over the proportion of options not vesting due to leaver conditions not being satisfied. The fair value recognised in the results for the Deferred Bonus Plan has been estimated using a Black-Scholes model with inputs as at 31 December 2010, in advance of the options being granted, making reasonable assumptions over the proportion of options not vesting due to leaver or performance conditions not being satisfied. This estimate will be revised in the following year’s results following the actual grant date, and any adjustment required will be applied to that year’s result. The fair value recognised in the results for the share awards in 2010 has been calculated at the date of grant using a European barrier and vanilla option model with inputs as at that date, making reasonable assumptions over the proportion of options not vesting due to leaver and/or performance conditions not being satisfied. ■■The movement in the number of share options outstanding and their relative weighted average exercise prices are as follows: ■■Options granted over B shares Group The following table illustrates the number and weighted average exercise price of, and movement in, share options during the year: 2010 Number WAEP £ 2009 Number WAEP £ Outstanding at 1 January 16,569 1.00 15,384 1.00 Granted prior to Listing 329,600 1.00 2,345 1.00 Forfeited prior to Listing (1,325) 1.00 (1,160) 1.00 Total prior to Listing 344,844 1.00 16,569 1.00 Conversion on Listing to ordinary shares 17,242,200 0.02 – – Exercised post Listing* (342,100) 0.02 – – Forfeited post Listing (17,000) 0.02 – – Outstanding at 31 December 16,883,100 0.02 16,569 1.00 Exercisable at 31 December 91,000 0.02 – – *The weighted average share price at the date of exercise of these options was £1.92 per ordinary share. The weighted average fair value of options granted during the year was £1.50 per ordinary share (2009: £2.72 per B share). The weighted average remaining contractual life for the share options outstanding as at 31 December 2010 is 2.5 years (2009: 1 year). The weighted average fair value of shares and options granted during the year was £29.0m (2009: £0.6m) to be charged over the vesting period. The exercise price for options outstanding at the end of the year was £nil per ordinary share (2009: £nil per B share). ■■Sharesave Plan 2010 Group The following table illustrates the number and weighted average exercise price of, and movement in, share options during the year: 2010 Number WAEP £ 2009 Number WAEP £ Outstanding at 1 January – – – – Granted post Listing 1,164,528 1.93 – – Outstanding at 31 December 1,164,528 1.93 – – Exercisable at 31 December – – – – The weighted average fair value of options granted during the year was £0.96 per ordinary share. Annual Report & Accounts 2010 95 Jupiter Fund Management plc
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Introduction 01-06 Highlights Chair
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Jupiter Annual Report 2010 - Jupiter Asset Management

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