125
FINANCIAL STATEMENTS
11 EMPLOYEE BENEFITS continued The number and weighted-average remaining contractual life of outstanding options under the LTIP are as follows:
Year ended 31 December 2020 Number of options
Year ended 31 December 2019 Number of options
15,196,343 17,595,308 8,951,149 4,755,178 (941,906) (2,402,172) (2,261,267) (2,567,282) (1,679,813) (2,184,689) 19,264,506 15,196,343 3,119,248 3,255,678
Outstanding at 1 January
Granted Forfeited Exercised
Expired
Outstanding at 31 December Exercisable at 31 December
0.57 1.36
Weighted-average share price at exercise (£) Weighted-average remaining contractual life (years)
0.54 1.15
The exercise price for options granted under the LTIP is nil.
During the year to 31 December 2020, awards of LTIPs were made on 23 March 2020. In addition, one-off awards with similar features to LTIPs were made on 20 March 2020 to the incoming Group Chief Financial Officer to compensate him for incentive awards forfeited on leaving his previous employer. The weighted-average fair value and assumptions used to determine the fair value of the LTIPs and the buy-out options granted during the year are as follows:
£0.39
Fair value at grant date Option pricing models used Share price at grant date
Black-Scholes, Stochastic, Finnerty
£0.44
Nil
Exercise price
53.20-62.82%
Expected volatility – TSR performance Expected volatility – holding period
60.44%
2-3 years + 2 year holding period
Option life Dividends
Nil
0.05-0.11%
Risk-free interest rate – TSR performance Risk-free interest rate – holding period
0.17%
A Black-Scholes option pricing model is used where vesting is related to an earnings per share target, a Stochastic model is used where vesting is related to a total shareholder return target, and a Finnerty model is used to model the holding period. Deferred share bonus plan (“DSBP”) The DSBP is operated in conjunction with the Group’s short-term incentive plan for Executive Directors and other senior managers of the Company or any of its subsidiaries, as explained in the Directors’ Remuneration Report. Awards are made in the form of nil-cost options which become exercisable on the third anniversary, and until the tenth anniversary, of the grant date.
The options are accounted for as equity-settled schemes.
The number and weighted-average remaining contractual life of outstanding options under the DSBP are as follows:
Year ended 31 December 2020 Number of options
Year ended 31 December 2019 Number of options
4,287,693 3,864,558 1,882,472 1,635,528
Outstanding at 1 January
Granted Forfeited Exercised
(15,004)
(503,412)
(1,060,240) (708,981) 5,094,921 4,287,693 1,716,596 1,656,365
Outstanding at 31 December Exercisable at 31 December
0.54 1.10
Weighted-average share price at exercise (£) Weighted-average remaining contractual life (years)
0.60 0.94
The exercise price for options granted under the DSBP is nil.
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