7. Share-based payments

No share options were exercised during the period. The following information applies to options outstanding at the end of the period:

Arrangement 1: Replacement Share Options granted to Directors 2: New Share Options granted to Non-Executive Directors 3: Replacement Share Options granted to Non-Executive Directors 4: Share Options granted to Employees under Long Term Incentive Plan 5: Share Options granted to Director under Long Term Incentive Plan 6: Share Options granted under Long Term Incentive Plan
Date of grant 20 July 2006 20 July 2006 20 July 2006 3 Aug 2006 22 Sept 2006 5 Feb 2008
Number of options granted 157,520 297,000 226,677 2,103,964 68,500 27,777
Contractual life at grant date (years) 10 10 10 10 10 10
Vesting conditions Listing of the company Continuous service following 27 April 2008 Continuous service following 27 April 2008 Continuous service until 28 April 2008 and share price to average at least 401.5p for at least 30 dealing days prior to exercise Continuous service until 28 April 2008 and share price to average at least 401.5p for at least 30 dealing days prior to exercise Continuous service until 28 April 2008 and share price to average at least 401.5p for at least 30 dealing days prior to exercise
Risk-free interest rate 4.76% 4.76% 4.76% 4.86% 4.78% N/A
Fair value per granted instrument determined at the grant date 310.14 pence 50.56 pence 111.19 pence 308.98 pence 309.86 pence 317.5 pence


Weighted average remaining life (years)
Range of exercise prices (pence) Weighted average exercise price (pence) Number of options (‘000) Expected Contractual
0-100 3 2,357 1 7
101-200 N/A – N/A N/A
201-300 242 pence 227 1 7
301-400 365 pence 297 1 7


Reconciliation of movements in the number of share options as follows: Number of Options Weighted average exercise price (pence)
Outstanding at 1 August 2008 3,054,894 56.4
Granted 1,777 3
Forfeited (175,233) 3
Exercised - -
Outstanding at 31 July 2009 2,881,438 59.7
Exercisable at 31 July 2009 681,197 242.6


The nature of all arrangements is the grant of share options and these have an expected option life at grant date of three years. Expected dividend (dividend yield) in all cases is 0%. For option sets one to five the binomial model has been used for valuation purposes. The share options granted on 5 February 2008 have been fair valued using the share price at grant date as it is not considered materially different to the fair option value calculated under the binomial model. All options are expected to be settled in shares. The expected volatility in all cases is 25% based upon review of comparators and analysis of movements to the share price since the Company’s listing. Expected departures at grant date are two per year for set four share options granted to employees under Long Term Incentive Plan and nil for all other arrangements above.

The Replacement Share Options granted to Directors (1) refer to the options described more fully in Part 1 of the Audited Information of the Directors’ Remuneration Report.

The Replacement Share Options granted to Non-Executive Directors (3) and The New Share Options granted to Non-Executive Directors (2) refer to the options described more fully in Part 2 of the Audited Information of the Directors’ Remuneration Report.

The Long Term Incentive Plan (LTIP) is a share option plan with options exercisable following 27 April 2008. Grants are subject to performance conditions which state that the options will vest only if the Group’s shares reach a price of 401.5 pence per share. The options will be subject to forfeiture among other factors if the holder ceases employment before the vesting date unless the holder is a ‘good leaver’ as defined in the rules of the LTIP. LTIP options were issued at an exercise price of three and 1/33 pence per share (3 1/33 & pence per share).

The share-based payment charge for the year ended 31 July 2009 is Nil (2008: £3,202,000).