26 Share-based payments continued Deferred share scheme – equity settled
2021 Number outstanding
Expected term of options
Exercisable between
Exercise price
Date of grant
61,694 18,937
September 2019
2 years 2 years
June 2021–August 2029 August 2022–April 2031
£nil *
May 2021
£nil
* The option exercise price is £nil; however, £1 is payable on each occasion of exercise. Phantom schemes – cash settled
Phantom schemes are used to allow the grant of LTIPs to members of the Executive Committee based in certain overseas locations at a time when the Group’s option scheme rules were not structured to allow overseas grants. The vesting conditions for the award of the phantom schemes, related to options granted in August 2016, relate to growth in the Group’s EPS over the performance period. If growth is equal to 25% or more per annum then 100% of the award will vest. If, however, growth is less than 10% per annum, none of the award will vest. Between these two points, vesting is determined on a straight-line basis. Options granted in October 2017 and November 2017 have three separate vesting conditions as set out below: • 60% will vest based on achieving an increase in Group EPS of 9%. If growth is equal to 20% or more per annum then 100% of the award will vest. If, however, growth is less than 9% per annum, none of the award will vest. Between these two points, vesting is determined on a straight-line basis • 30% will vest based on achieving a cash conversion ratio ¹ expressed as a percentage over the measurement period of greater than 70% per annum on average. If cash conversion ¹ is greater than or equal to 80% per annum then 100% of the award will vest. If, however, cash conversion is less than 70% per annum, none of the award will vest. Between these two points, vesting is determined on a straight-line basis • 10% will vest based on the Group’s total shareholder return (TSR) ranking when measured against the FTSE 250 (excluding investment trusts). If the Group’s TSR is consistent with the median group 20% of the award will vest; below this level, none of the award will vest. If the TSR is within the upper quartile or above, 100% of the award will vest; between the median and upper quartile, vesting is determined on a straight-line basis Options granted in September 2019 do not have any performance criteria.
2021 Number outstanding
Expected term of options
Exercisable between
Exercise price
Date of grant
113,120
October 2017 November 2017 September 2019
3 years 3 years 3 years
June 2020–October 2021 June 2020–November 2021
£nil * £nil * £nil *
8,189
67,036
September 2022–September 2023
* The option exercise price is £nil; however, £1 is payable on each occasion of exercise. Measurement of fair values
The fair value of services received in return for share options is calculated with reference to the fair value of the award on the date of grant. The fair value is spread over the period during which the employee becomes unconditionally entitled to the award, adjusted to reflect actual and expected levels of vesting. Black Scholes and binomial models have been used to calculate the fair values of options on their grant date for all options issued after 7 November 2002, which had not vested by 1 January 2005. The assumptions used in the model are illustrated in the table below:
Fair value at measurement date
Expected volatility
Option expected term
Risk free interest rate
Grant date
Exercise price
CSOP scheme
July 2012–September 2019
£0.35–£0.63 £1.36–£2.20 35.0–48.0% 7 years 0.35–2.75% £0.67–£0.88 £0.99–£2.15 39.7–53.2% 3 years 0.50–2.20%
Sharesave scheme August 2017–May 2021
ESPP scheme ISO scheme LTIP scheme RSU scheme RSP scheme Deferred shares
February 2020–May 2021 August 2018–September 2019 November 2017–May 2021 August 2018–May 2021
£0.55–£0.68 £1.93–£2.15
37.60% 1 year
0.50%
£0.54–£0.65 £1.82–£2.22 40.7–48.4% 7 years 0.38–1.50%
£1.61–£2.87
£nil * 37.4–51.5% 3 years 0.21–2.00%
£1.60–£2.87 £nil *–£0.01 47.6–51.5% 3 years 0.32–2.00%
May 2021
£2.85
£nil *
N/A 10 years
N/A
September 2019–May 2021
£1.84–£2.91
£nil * 40.4–55.0% 2 years 0.35–1.50% £nil * 31.0–47.6% 3 years 1.81–1.96%
Phantom schemes October 2017–September 2019 £1.84–£2.75
* The option exercise price is £nil; however, £1 is payable on each occasion of exercise. The expected volatility has been based on an evaluation of the historical volatility of the Company’s share price, particularly over the historical period commensurate with the expected term. The expected term of the instruments has been based on historical experience and general option holder behaviour. For the options granted in the year ended 31 May 2021, dividend yield assumed at the time of option grant is 2.5% (2020: 2.7%).
NCC Group plc — Annual report and accounts for the year ended 31 May 2021
179
Made with FlippingBook Converter PDF to HTML5