Annual Report 2010 in PDF - BBA Aviation

21. Share capital and reserves – continued
Rights of non-equity interests
5% Cumulative preference £1 shares:
i. entitle holders, in priority to holders of all other classes of shares, to a fxed cumulative preferential dividend at a rate of 5.0% per annum per
share payable half yearly in equal amounts on 1 February and 1 August.
ii. on a return of capital on a winding up, or otherwise, will carry the right to repayment of capital together with a premium of 12.5p per share
and a sum equal to any arrears or defciency of dividend; this right is in priority to the rights of the ordinary shareholders;
iii. carry the right to attend and vote at a general meeting of the Company only if, at the date of the notice convening the meeting, payment of
the dividend to which they are entitled is six months or more in arrears, or if a resolution is to be considered at the meeting for winding-up the
Company or reducing its share capital or sanctioning the sale of the undertakings of the Company or varying or abrogating any of the special
rights attaching to them.
Rights of equity interests
29 16 /21p Ordinary shares:
i. carry no right to fxed income;
ii. on a return of capital on a winding-up, or otherwise, will carry the right to repayment of capital; this right is subordinate to the rights of the
preference shareholders;
iii. carry the right to attend and vote at a meeting of the Company.
22. Share-based payments
Equity-settled share-based payments
(i) Share options
The Group plan provides for a grant price equal to the average of the middle market price of a BBA Aviation share up to fve dealing days prior to
the date of grant. The vesting period is generally three to four years. If the options remain unexercised after a period of 10 years from the date of
grant, the options expire. Furthermore, options are forfeited if the employee leaves the Group before the options vest.
Details of the share options outstanding during the year are as follows:
2010 2009
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Lapsed during the year
Number
of share
options
12,744,907
201,916
(880,129)
(1,377,959)
Weighted
average
exercise
price
149p
163p
145p
244p
Number
of share
options
8,003,784
7,248,294
(96,297)
(2,410,874)
Outstanding at the end of the year 10,688,735 137p 12,744,907 149p
Weighted
average
exercise
price
Exercisable at the end of the year 4,089,015 260p 5,728,409 257p
The weighted average share price at the date of exercise for share options exercised during the period was 145p. The options outstanding at
31 December 2010 had weighted average remaining contractual life of 33 months and an exercise price range of £1.53 to £2.99. Options over
201,916 shares were granted under the BBA 2006 UK Share Option Plan in the year.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted and calculated
using the valuation technique most appropriate to each type of award. These include Black-Scholes calculations and Monte Carlo simulations.
The inputs into the models were as follows:
253p
57p
224p
205p
Issued in Issued in
March 2010 March 2009
Weighted average share price (pence) 170 68
Weighted average exercise price (pence) 163 57
Expected volatility 47.6% 36.6%
Expected life (months) 36 36
Risk-free rate 1.9% 2.2%
Expected dividends 4.8% 4.6%
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the the period of time equivalent to the
remaining contractual life of the option. The expected life used in the model has been adjusted, based on management’s best estimate, for the
efects of non-transferability, exercise restrictions, and behavioural considerations.
Consolidated Financial Statements — 121