132
IMI plc
4.7.2
Schemes under which options
are outstanding
The options in the above table relate to the following share-based
payment schemes:
IMI Sharesave Scheme (‘SAYE’)
This scheme has now expired but options are still outstanding under it. This
scheme was open to the majority of the Group’s UK employees, including the
executive directors, and allowed the grant of options to all participants at a
discount of up to 20% below the market price. Such schemes are not subject
to performance conditions and offer tax incentives to encourage employees to
use their own money to purchase IMI shares. SAYE options may be exercised
within six months of the date they first become exercisable. Shareholder
approval will be sought for a new sharesave scheme to enable IMI to
continue to grant sharesave options on the same basis.
Global Employee Share Purchase Plans (‘GESPP’)
These plans were introduced in 2011 for the USA and Germany. The German
and USA GESPP’s offer the opportunity to buy shares in IMI at a fixed price at
a future date. The German GESPP mirrors the UK Sharesave scheme, with a
minimum/maximum savings limit per month and contract duration of three to
five years. The USA GESPP also operates in a similar way to the UK Sharesave
Scheme, with a minimum/maximum savings limit per month, but the contract
duration is for a fixed period of two years and different taxation conditions
apply for the exercise period.
Executive Share Option Scheme
This scheme is no longer operated, but options are still outstanding under it.
Executive share options were last awarded to executive directors in 2004 and
to certain other employees in 2005. All outstanding options granted under
this scheme were granted subject to stretching tiered performance conditions
related to growth in EPS above inflation over a fixed period of three financial
years. Executive share options expire if not exercised or lapsed within the
periods shown in section 4.7.1.
IMI 2005 Long-term Incentive Plan (also known as Performance
Share Plan (‘PSP’))
The PSP is open to the Company’s executive directors and selected senior
managers within the Group. Awards are granted subject to stretching
performance targets the nature of which differ depending upon the
year in which the award was granted.
IMI Share Option Plan (‘SOP’)
Awards have been granted to the Company’s executive directors and selected
senior managers within the Group. Awards have been granted subject to
stretching performance targets the nature of which differs depending upon
the year in which the award was granted.
4.7.3
Other share-based payment arrangements
The Group also operates the following employee share plans:
Share Matching Plan (‘SMP’)
The delivery of the executive directors’ and selected senior managers’ annual
bonuses is governed by the individual’s achievement of a Share Ownership
Guideline (‘SOG’). The SOG is a requirement to hold a percentage of salary
as IMI shares and, if achieved, any bonus is paid in cash. The SMP has been
operated on the basis that if the SOG is not achieved a proportion of any annual
bonus will be mandatorily deferred for three years and delivered in IMI shares
under the SMP. This mandated investment (if the SOG is not achieved) has
been matched from 75% up to a maximum of 200%. These matching shares
can be earned if performance conditions over the three-year vesting period
are met.
Qualifying employees have also been able to elect voluntarily to defer all or part
of the remainder of their bonus, and invest personal funds, up to a maximum
of 100% of their annual bonus opportunity. Additional shares, in the form
of a matching award, may be earned (to a maximum of 200% of the ‘gross
equivalent’ number of shares invested in the SMP) if performance conditions
over the three-year vesting period are met.
The performance measures for SMP matching awards differ depending upon
the year in which the award was granted. No further awards will be granted
under the SMP. Refer to the Remuneration Report for information on the
proposed new schemes.
Share Incentive Plan (‘SIP’)
The SIP is open to the majority of the Group’s UK employees, including
the executive directors. This scheme covers two separate opportunities for
employees to share in IMI’s success as follows:
• Partnership shares – allow employees to invest up to the statutory maximum
from pre-tax pay, which is used to buy IMI shares.
• Free shares – allows a grant of shares to employees each year, up to the
statutory maximum.
Shares acquired or awarded under the SIP are not subject to performance
conditions and offer tax incentives to encourage employees to build up their
shareholdings with the Company.
SECTION 4 – CAPITAL STRUCTURE AND FINANCING COSTS
Continued
