This excerpt taken from the ICI 6-K filed Mar 21, 2007.
2004 Executive Share Option Plan
Options granted under this scheme are principally made to Executive Directors and members of the Executive Management Team. This scheme grants options that vest and become exercisable providing earnings per share targets over a three-year period are satisfied. Vesting levels will vary based on earning per share levels achieved. There is no retesting after the three-year performance period. Options under the plan must be held for a minimum of three years from date of grant before they can be exercised and lapse if not exercised within ten years. The prices at which options are granted under the 2004 Executive Share Option Plan must not be less than the nominal value of an Ordinary Share nor less than the average of the middle market quotation of an ICI Ordinary Share on the London Stock Exchange on the three business days immediately preceding the date on which the option is granted. For US participants the awards are made as Stock Appreciation Rights (SARs) denominated in American Depository Receipts (ADRs).
This excerpt taken from the ICI 6-K filed Mar 16, 2005.
Executive Share Option Plan
Share Option grants are made under a plan approved by shareholders in 2004. The Plan grants options that vest and become exercisable provided demanding Earnings per Share (EPS) performance conditions are met. EPS has been selected because it is the quantifiable outcome of the key targets set by the Board in the areas of sales growth, trading profit margin and Return on Capital Employed. For the awards to be made in 2005, these targets and corresponding vesting levels will be defined relative to the achievement of specific EPS amounts in 2007.
The numbers of shares vesting will be pro-rated, on a straight-line basis, between points on the above scale. There will be no retesting of these conditions after the three-year performance period.
ICI ANNUAL REPORT AND ACCOUNTS 2004
The performance target for option vesting continues to be challenging and is in line with the commitment in the strategic update announced during 2003 to targets which, if achieved, should result in double digit compound annual growth rate for four years from a baseline EPS of 18.5p for 2003. The minimum performance threshold of 27.1p EPS in 2007 will require 23.7% growth from the EPS for 2004 of 21.9p (see page 121 note 5). This continues to be ahead of market practice for comparable companies and takes account of ongoing EPS benefits arising from ICIs restructuring programme announced in 2003. Such growth levels are therefore unlikely to be sustainable for subsequent grants, though the Remuneration Committee will continue to set targets that remain demanding.
The Committee may reduce the awards that vest having regard to the underlying performance of ICI and the extent to which EPS performance reflects progress towards the financial targets contained in the 2003 strategic update.
Options under the Plan must be held for a minimum of three years from date of grant before they can be exercised and lapse if not exercised within ten years. The shares to meet options exercised will be either bought in the market or provided by a new issue of shares.
It is intended to make option grants to Executive Directors at the levels set out on page 44 and in accordance with these criteria in the 42 day period following the announcement of the 2004 full year results.