confidence - Investing In Africa

Financial StatementsNotes to the Accounts for the year ended 30 June 2005 (cont’d)30. PHANTOM SHARE OPTIONSThe Bank has in place a “Compensation based on Performance Scheme” for senior executives including an element ofat-risk pay. The at-risk pay is in the form of options for Phantom shares. Under this scheme, senior executives are allocateda number of Phantom share options based on individual, team and Bank performance. The option price is the marketprice of the share at a discount. Options are exercisable after three years and within ten years of the date of allocationof the options subject to certain conditions including the following:(i) At the end of the tenth year, all outstanding options lapse.(ii) In any one year, not more than 15% of the options can be exercised.On the exercise of an option for a Phantom share, applicants receive in cash the increase in value of a notional share,based on the difference between the Bank’s quoted share price at the time of exercise and the option price.Movements in the number of Phantom share options:GROUP AND BANK2005 2004 2003MRs' 000 MRs' 000 MRs' 000Outstanding at beginning of the year 622,595 755,475 668,330Allocated during the year 279,000 - 250,000Lapsed during the year -) (63,305) (52,855)Exercised during the year (75,630) (69,575) (110,000)Outstanding at end of the year 825,965 622,595 755,475Included in staff costs (Note 24) is an amount of MRs1,027,200 (2004: MRs494,775) (2003: MRs402,000) paid on the exerciseof Phantom share options during the year.60Terms of the phantom share options outstanding as at 30 June 2005:Expiry DateGROUP AND BANKOptionNumber Price(MRs)June 30, 2008 53,415 18.00June 30, 2009 49,800 13.00June 30, 2010 85,750 10.00June 30, 2011 153,000 10.00June 30, 2012 205,000 10.00June 30, 2014 279,000 20.00825,965As at 30 June 2005, the potential liability was not significant.