During the year, the Company operated the Unapproved Share Option Scheme, the Approved Share Option Scheme, the Long Term Incentive Plan and the Save As You Earn (SAYE) Share Option Scheme as described below:

Unapproved and Approved Share Option Schemes

Under these Schemes, options are granted to certain Executives and employees of the Group (excluding Executive Directors) to purchase shares in the Company at a price fixed at the average market value over the three days prior to the date of grant. For the options to vest, there must be an increase in earnings per share of at least 12% above the growth in the UK Retail Prices Index (RPI) over a three year period. Once vested, options must be exercised within ten years of the date of grant.

Long Term Incentive Plan 2008

Vesting is dependent on two performance conditions which must be satisfied over a three year performance period commencing from the start of the financial year within which the award is granted. 50% of the award will vest dependent on the Company's TSR performance against an appropriate comparator group. 50% of the award will vest subject to a performance condition based on annual earnings per share targets. Each of the TSR and EPS elements is subject to an additional ROCE underpin. Unless the Company's ROCE is 10% or more in the final year of the performance period, the award will lapse in full.

SAYE Option Scheme

This scheme is open to all UK employees. Participants save a fixed amount of up to £500 per month for either three or five years and are then able to use these savings to buy shares in the Company at a price fixed at a 20% discount to the market value at the start of the savings period. Prior to 16 October 2012, participants were able to save for a seven year period. The SAYE options must ordinarily be exercised within six months of the completion of the relevant savings period. The exercise of these options is not subject to any performance criteria.

Long Term Incentive Plan 2017

(a) Long Term Incentive Plan Awards

Vesting is dependent on three performance conditions which must be satisfied over a three year performance period commencing from the start of the financial year within which the award is granted. One third of each award is subject to a performance condition based on the Company's TSR performance over the performance period relative to an appropriate comparator over the performance period. Two thirds of each award is subject to a performance condition based on the growth in the Group's underlying diluted EPS over the performance period. Both the TSR element and the EPS element are subject to an additional ROCE performance measure. Unless the Group's ROCE is 10% or more in the final year of the performance period, the awards will lapse in full regardless of TSR and EPS performance. For the purposes of this note they are detailed under the heading Long Term Incentive Plan.

(b) Qualifying LTIP Awards

In addition, awards can be structured as Qualifying LTIP Awards, consisting of a Company Share Option Plan (CSOP) option and a nil-cost LTIP award, with the ordinary award scaled back at exercise to take account of any gain made on exercise of the CSOP option. The Qualifying LTIP Awards are granted to UK Senior Executive Team which includes the UK resident Executive Directors. The performance conditions are the same as those attached to the awards granted under Approved Share Option Schemes and Long Term Incentives Plan 2017. For the purposes of this note they are detailed under the heading Long Term Incentive Plan (Qualifying LTIP Awards).

(c) Market Value Options

Market value options may be granted under the LTIP 2017 as tax-advantaged CSOP options and as Unapproved share options. These options are granted to certain Executives and employees of the Group (excluding Executive Directors) to purchase shares in the Company at a price fixed at the average market value over the three days prior to the date of grant. For the options to vest, there must be an increase in earnings per share of at least 12% above the growth in the UK Retail Prices Index (RPI) over a three year period. Once vested, options must be exercised within ten years of the date of grant. For the purposes of this note they are detailed under the headings Unapproved and Approved Share Option Schemes.

Year ended 30 June 2018

Exercise
Period
Exercise
price
per share
Pence
At
1 July
2017
Number
Exercised
Number
Granted
Number
Lapsed
Number
At
30 June
2018
Number
Unapproved Share Option Scheme
2 April 2008†*2011–2018336.153,266(3,266)
10 October 2008†*2011–2018364.632,7222,722
30 March 2009†*2012–2019381.158,7098,709
1 March 2010†*2013–2020418.812,1772,177
28 February 2011†*2014–2021461.973,2213,221
10 September 2012†2015–2022541.0026,000(13,000)13,000
16 September 2013†2016–2023721.0017,765(11,000)6,765
11 September 2014†2017–2024763.0044,009(25,668)(4,000)14,341
15 September 20152018-2025975.0048,060(2,000)(4,805)41,255
18 March 20162019-20261118.00950950
19 September 20162019-20261369.0088,852(10,500)78,352
2 March 20182020-20282506.00114,113(1,803)112,310
245,731(54,934)114,113(21,108)283,802
Approved Share Option Scheme
2 April 2008†*2011–2018336.151,088(1,088)
1 March 2010†*2013–2020418.81466(466)
28 February 2011†*2014–2021461.9744(44)
16 September 2013†2016–2023721.003,249(2,749)500
11 September 2014†2017–2024763.0010,991(6,332)4,659
15 September 20152018-2025975.0013,44013,440
18 March 20162019-20261118.005,0505,050
19 September 20162019-20261369.009,1489,148
2 March 20182021-20282506.0010,387(1,197)9,190
43,476(10,679)10,387(1,197)41,987
Long Term Incentive Plan
15 September 20142017–2018195,258(195,258)
15 September 20152018–2019155,834155,834
22 March 201620198,7868,786
19 September 20162019–2020149,463149,463
10 October 20162019–20205,3195,319
7 March 2017201821,033(21,033)
7 March 2017201921,03321,033
2 March 20182020–202128,24028,240
556,726(216,291)28,240368,675
Long Term Incentive Plan (Qualifying LTIP Awards)
2 March 20182021-20282506.007,5307,530
2 March 20182020–202174,28174,281
81,81181,811
SAYE Option Scheme
13 December 2010*2013–2017375.644,542(4,542)
16 October 20122015–2018471.007,576(7,576)
7 April 20142017–2019552.0022,383(2,282)20,101
13 October 20142017–2020614.00100,129(82,034)(1,717)16,378
12 October 20152018–2021792.0082,804(997)(2,046)79,761
13 October 20162019–20221095.0049,429(6,945)42,484
12 October 20172020–20231646.0073,108(3,560)69,548
266,863(97,431)73,108(14,268)228,272
Total1,112,796(379,335)307,659(36,573)1,004,547
Weighted average exercise price*430.64p270.69p1405.23p1251.43p759.65

* Adjusted to reflect the bonus element of the Rights Issue — there has been no impact on the overall fair value of options in issue.

† Total share options exercisable at 30 June 2018 are 56,094.

Year ended 30 June 2017

Exercise
Period
Exercise
price
per share
Pence
At
1 July
2016
Number
Exercised
Number
Granted
Number
Lapsed
Number
At
30 June
2017
Number
Unapproved Share Option Scheme
2 April 2008†*2011–2018336.156,649(3,383)3,266
10 October 2008†*2011–2018364.635,444(2,722)2,722
30 March 2009†*2012–2019381.1510,886(2,177)8,709
1 March 2010†*2013–2020418.814,354(2,177)2,177
28 February 2011†*2014–2021461.978,164(4,943)3,221
10 September 2012†2015–2022541.0031,000(5,000)26,000
16 September 2013†2016–2023721.0047,628(29,863)17,765
5 March 2014†2017–2024698.002,000(2,000)
11 September 20142017–2024763.0057,713(9,104)(4,600)44,009
15 September 20152018-2025975.0055,060(1,911)(5,089)48,060
18 March 20162019-20261118.00950950
19 September 20162019-20261369.0096,798(7,946)88,852
229,848(63,280)96,798(17,635)245,731
Approved Share Option Scheme
2 April 2008†*2011–2018336.153,612(2,524)1,088
1 March 2010†*2013–2020418.815,360(4,894)466
28 February 2011†*2014–2021461.974444
10 September 2012†2015–2022541.00500(500)
16 September 2013†2016–2023721.0011,158(7,909)3,249
11 September 20142017–2024763.0012,087(1,096)10,991
15 September 20152018-2025975.0018,940(5,500)13,440
18 March 20162019-20261118.005,0505,050
19 September 20162019-20261369.009,202(54)9,148
56,751(15,827)9,202(6,650)43,476
Long Term Incentive Plan
27 November 20132016–2017267,070(257,052)(10,018)
15 September 20142017–2018266,158(7,046)(63,854)195,258
15 September 20152018–2019220,621(5,170)(59,617)155,834
22 March 20162019–20198,7868,786
19 September 20162019–2020149,463149,463
10 October 20162019–20205,3195,319
7 March 20172018–201942,06642,066
762,635(269,268)196,848(133,489)556,726
SAYE Option Scheme
12 October 2009*2012–2016304.923,418(3,418)
13 December 2010*2013–2017375.647,064(2,431)(91)4,542
17 October 2011*2014–2017365.546,326(6,326)
16 October 20122015–2018471.007,5767,576
7 April 20142017–2019552.0095,043(69,726)(2,934)22,383
13 October 20142017–2020614.00106,577(1,482)(4,966)100,129
12 October 20152018–2021792.0092,162(9,358)82,804
13 October 20162019–20221095.0052,877(3,448)49,429
318,166(83,383)52,877(20,797)266,863
Total1,367,400(431,758)355,725(178,571)1,112,796
Weighted average exercise price*300.46p215.71p570.71p232.47p430.64p

* Adjusted to reflect the bonus element of the Rights Issue — there has been no impact on the overall fair value of options in issue.

† Total share options exercisable at 30 June 2017 are 68,707.


The weighted average exercise price of options eligible to be exercised at 30 June 2018 was 596.85p (2017: 470.86p). For options exercised during the year, the weighted average market price at the date of exercise was 2,142.35p (2017: 1,415p). The weighted average remaining contractual lives of options outstanding at the Consolidated Statement of Financial Position date was 3.8 years (2017: 3.3 years).

Outstanding options on all Long Term Incentive Plan, Approved and Unapproved plans prior to 30 June 2017 were exercisable at 30 June 2018. No options issued under SAYE plans were exercisable at 30 June 2018 (2017: nil).

The fair values for shares granted under the Unapproved, Approved and SAYE Option Schemes have been calculated using the Black–Scholes option pricing model. The fair values of shares awarded under the Long Term Incentive Plan have been calculated using a Monte Carlo simulation model which takes into account the market-based performance conditions attaching to those shares. The assumptions used in calculating fair value are as follows:

Long Term Incentive Plan

Date of grant07/03/1707/03/1710/10/1619/09/1622/03/1615/09/15
Number of shares awarded21,03321,0335,319149,4638,786220,621
Share price at date of grant1652p1652p1389p1379p1200p990p
Exercise priceNilNilNilNilNilNil
Expected life2 years1 year3 years3 years3 years3 years
Risk-free rate0.12%0.12%0.12%0.12%0.46%0.68%
Volatility22%22%22%22%22%22%
Dividend yield1.54%1.54%1.54%1.54%1.61%0.54%
Fair value per share1500p1500p1108p1108p1021p764p

Unapproved and Approved Share Option Schemes

Date of grant19/09/1618/03/1615/09/15
Number of shares awarded106,0006,00074,000
Share price at date of grant1379p1185p990p
Exercise price1369p1188p975p
Expected life6.5 years6.5 years6.5 years
Risk-free rate0.47%1.02%1.47%
Volatility26%26%27%
Dividend yield1.54%1.62%0.54%
Fair value per share305p273p284p

Long Term Incentive Plan 2017

Valuation date02/03/18
Award date02/03/18
Vesting date30/09/20
Expected exercise30/09/20
Type of awardsNil-cost options
(CSOP linked)
Conditional
share awards
Nil-cost options
(CSOP linked and
standalone options)
Market value
options
Holding period restriction2 years2 yearsN/AN/A
Number of awards at grant20,45940,9184,0338,0669,68219,363114,113
Share price at date of grant2506p2506p2506p2506p2506p2506p2506p
Exercise priceNilNilNilNilNilNilNil
Expected lifeyearsyearsyearsyearsyearsyearsyears
Risk-free rate0.82%0.82%0.82%0.82%0.82%0.82%1.20%
Volatility23.21%23.21%23.21%23.21%23.21%23.21%23.21%
Dividend yield1.91%1.91%1.91%1.91%1.91%1.91%1.91%
Fair value per share1979p22.50p19.79p22.50p21.33p24.25p522p

Save As You Earn Option Scheme

Date of grant12/10/1713/10/1612/10/15
Number of shares awarded73,10852,877101,513
Share price at date of grant2175p1370p930p
Exercise price1646p1095p792p
Expected life
— three year scheme3.25 years3.25 years3.25 years
— five year scheme5.25 years5.25 years5.25 years
Risk-free rate
— three year scheme0.54%0.22%0.83%
— five year scheme0.79%0.44%1.17%
Volatility
— three year scheme21.6%22%22%
— five year scheme22.2%24%26%
Dividend yield1.91%1.51%0.53%
Fair value per share
— three year scheme551p302p215p
— five year scheme587p346p283p

Expected volatility was determined by calculating the historical volatility of the Group's share price over its entire trading history.

National Insurance contributions are payable by the Company in respect of some of the share-based payments. These contributions are payable on the date of exercise based on the intrinsic value of the share-based payments and are therefore treated as cash settled awards. The Group had an accrual at 30 June 2018 of £1.4 million (2017: £1.0 million), of which £0.2 million (2017: £0.1 million) related to vested options. The total charge to the Consolidated Income Statement in respect of share-based payments was:

2018
£m
2017
£m
Equity settled share-based transactions2.42.3
Cash settled share-based transactions0.90.5
3.32.8

The above charge to the Consolidated Income Statement is included within administrative expenses.