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368 NEDBANK GROUP Limited INTEGRATED REPORT 201051 SHARE-BASED PAYMENTSNedbank Group Limited shares, share options over Nedbank Group Limited shares and equity instruments in respect of Nedbank Group Limitedshares are granted to employees as part of their remuneration package as services are rendered, as well as to clients, business partners and affinitygroups as an incentive to retain business and develop growth within the group. The following are the share and share option schemes that havebeen in place during the year. All schemes are equity-settled at group level, except the UK long-term incentive scheme, which is cash-settled.As the group cannot estimate reliably the fair value of services received nor the value of additional business received, the group rebuts thepresumption that such services and business can be measured reliably. The group therefore measures their fair value by reference to the fair valueof the shares, share options or equity instruments granted, in line with the group’s accounting policy. The fair value of such shares, share optionsand equity instruments is measured at the grant date utilising the Black-Scholes valuation model.51.1 Description of arrangementsSchemeTraditional employee schemesTrust/Special purposevehicle (SPV)DescriptionNedbank Group (1994)Share Option SchemeNedbank Group (2005)Share Option and RestrictedShare SchemeNedbank Group (2005)Matched Share SchemeOld Mutual UK SharesaveSchemeNedbank UK Long-termIncentive Plan (LTIP)Nedbank EmployeeShare TrustNedbank Group (2005)Share Scheme TrustNedbank Group (2005)Share Scheme Trustn/aNedbank Group (2005)Share Scheme Trust amendedto accommodate the UKparticipantsShare options were granted to key personnel to motivate senior employeesto remain with the group. The granting of share options was based on joblevel, merit and performance, and was entirely at the discretion of thetrustees acting on recommendations of executive management. Grantswere made twice a year for new appointments and annually for existingstaff, on a date determined by the trustees. The scheme is now closed tonew participants and no further shares will be granted.Share options are granted to key personnel to motivate senior employeesto remain with the group. The granting of share options is based on joblevel, merit and performance, and is entirely at the discretion of thetrustees acting on recommendations of executive management. Grants aremade twice a year for new appointments and annually for existing staff, ona date determined by the trustees.All employees of the group are eligible to participate in the scheme. Anamount of not more than 50% of their after-tax bonus can be invested,which will be matched by the group with shares.All eligible employees of Fairbairn Private Bank (Jersey) Limited, FairbairnPrivate Bank (Isle of Man) Limited and Fairbairn Trust Company Limited(Guernsey) are entitled to participate in the Old Mutual UK Sharesave Plan,which allows them to elect to save between £5 and £250 per month overa three- or five-year period, and receive an option to purchase Old Mutualplc shares in the future at an exercise price that is set at the start of theplan. Invitations to participate in the plan are issued annually.Employees who perform services in the United Kingdom on behalf ofthe group will be considered for participation in the UK LTIP. Selectedemployees will be granted share appreciation rights (SARs). SARs aresimilar to options in that SARs are granted at a predetermined exercisedprice and vesting and expiry date. When the participant elects to exerciseSARs, the employer settles the difference between the current market priceand the exercise price in cash.