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Notes 26-31

26. Authorised and issued share capital

  Equity
ordinary
shares
Nominal
value
£m
Authorised
At 1 January 2006 1,750,000,000 175.0
At 31 December 2006 1,750,000,000 175.0
At 31 December 2007 1,750,000,000 175.0
 
Issued and fully paid
At 1 January 2006 1,252,899,372 125.3
Exercise of share options 20,984,083 2.1
Share cancellations (33,157,108) (3.3)
Other (121,160) (0.0)
At 31 December 2006 1,240,605,187 124.1
Exercise of share options 7,773,345 0.7
Share cancellations (57,193,623) (5.7)
Acquisitions 305,354 0.1
Other 1,000 0.0
At 31 December 2007 1,191,491,263 119.2

Fully paid ordinary shares, which have a per value of 10p, carry one vote per share and the right to dividends.

Share options
WPP Executive Share Option Scheme

As at 31 December 2007, unexercised options over ordinary shares of 12,379,801 and unexercised options over ADRs of 3,870,415 have been granted under the WPP Executive Share Option Scheme as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
493,629 2.930 2001-2008
5,022 3.030 2001-2008
10,950 3.270 2001-2008
7,973 3.763 2006-2013
42,899 3.763 2006-2013
4,239 3.763 2006-2013
110,667 4.210 2005-2012
1,383,200 4.210 2005-2012
53,652 4.210 2006-2012
30,658 4.210 2005-2013
3,832 4.210 2005-2012
32,385 4.210 2005-2012
4,597 4.210 2005-2012
3,832 4.210 2005-2012
77,552 4.438 2005-2012
6,759 4.438 2005-2012
41,170 4.615 2006-2013
51,247 4.615 2007-2013
68,817 4.865 2004-2011
1,071,242 4.865 2004-2011
31,558 4.865 2005-2011
38,543 5.185 2002-2009
2,000,000 5.490 2007-2014
27,288 5.520 2008-2014
197,094 5.535 2007-2014
1,141,935 5.535 2007-2014
942,601 5.535 2007-2014
38,524 5.535 2008-2014
28,942 5.535 2007-2008
6,124 5.535 2007-2015
987 5.535 2007-2014
24,390 5.535 2007-2014
2,469 5.535 2007-2014
240,293 5.535 2007-2014
235,976 5.595 2006-2013
1,807,700 5.595 2006-2013
17,194 5.595 2006-2014
39,698 5.595 2007-2013
18,709 5.595 2006-2013
47,660 5.595 2006-2013
29,636 5.595 2006-2013
291,465 5.595 2006-2013
235,251 5.700 2002-2009
7,740 5.725 2007-2014
9,676 5.725 2007-2014
11,423 5.775 2009-2015
14,826 5.818 2008-2015
2,964 5.818 2008-2015
8,940 5.895 2008-2015
11,175 5.895 2008-2015
2,235 5.895 2008-2015
11,980 5.895 2008-2015
8,778 6.105 2008-2015
25,510 6.105 2008-2015
9,828 6.105 2008-2015
8,830 6.228 2010-2017
7,876 6.228 2011-2017
4,280 6.718 2009-2016
10,700 6.718 2009-2016
4,280 6.718 2009-2016
23,480 6.718 2009-2016
69,369 6.718 2009-2016
19,566 6.718 2011-2016
2,062 6.938 2009-2016
49,906 7.180 2005-2012
33,099 7.550 2005-2012
30,294 7.550 2005-2012
66,189 7.550 2005-2012
317,846 7.550 2005-2012
3,741 7.550 2006-2012
15,870 7.723 2010-2017
22,396 8.110 2004-2011
38,566 8.110 2004-2011
6,544 8.193 2004-2011
19,630 8.193 2004-2011
394,774 9.010 2003-2010
11,575 9.010 2004-2010
115,590 9.010 2003-2010
19,428 10.770 2003-2010
10,476 10.770 2003-2010
Number of ADRs
under option
Exercise price
per ADR ($)
Exercise
dates
12,457 30.080 2006-2013
2,692 30.080 2006-2013
535,364 33.200 2005-2012
8,732 33.200 2005-2012
2,881 34.702 2005-2012
368,031 35.380 2004-2011
195,194 46.475 2002-2009
975,375 47.410 2006-2013
30,471 47.410 2006-2013
630 47.410 2006-2013
44,222 47.410 2006-2013
3,163 47.410 2006-2013
1,548 48.450 2007-2014
17,459 50.670 2008-2015
197 50.670 2008-2015
982,954 50.800 2007-2014
196 50.800 2007-2014
18,597 50.800 2007-2014
2,952 50.800 2007-2014
42,460 50.800 2007-2014
38,401 51.220 2007-2014
15,222 53.030 2005-2012
15,096 54.050 2005-2012
133,837 54.050 2005-2012
18,439 54.230 2008-2015
458 54.570 2008-2015
4,581 54.570 2008-2015
8,973 55.740 2008-2015
898 55.740 2008-2015
898 55.740 2008-2015
2,691 57.020 2008-2015
21,992 57.020 2008-2015
6,976 57.338 2003-2010
20,096 58.238 2004-2011
856 58.460 2009-2016
22,666 58.460 2009-2016
856 58.460 2009-2016
10,159 58.886 2004-2010
7,249 61.290 2009-2016
7,249 61.290 2010-2016
7,248 61.290 2011-2016
16,210 61.690 2009-2016
49,544 62.110 2003-2010
2,415 62.110 2005-2010
187,950 62.263 2003-2010
796 62.810 2010-2017
468 63.900 2009-2016
2,423 63.900 2009-2016
2,007 74.720 2010-2017
5,594 75.940 2010-2017
12,592 84.485 2003-2010

WPP Worldwide Share Ownership Program

As at 31 December 2007, unexercised options over ordinary shares of 5,838,150 and unexercised options over ADRs of 804,232 have been granted under the WPP Worldwide Share Ownership Program as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
3,000 3.400 2001-2008
235,800 3.903 2006-2013
1,400 3.903 2006-2013
3,000 3.903 2006-2013
6,000 3.903 2007-2013
9,275 4.210 2005-2012
1,625 4.210 2005-2013
1,000 5.210 2004-2011
98,675 5.315 2002-2009
1,400 5.315 2003-2009
12,000 5.435 2008-2014
7,125 5.435 2007-2008
1,875 5.435 2007-2011
385,500 5.435 2007-2014
10,375 5.435 2007-2014
8,125 5.775 2008-2015
3,250 5.990 2004-2011
13,375 6.195 2008-2015
972,175 6.195 2008-2015
8,875 6.195 2009-2015
4,500 6.195 2008-2012
15,420 6.668 2009-2017
109,159 6.740 2009-2016
1,010,323 6.938 2009-2016
109,270 6.938 2010-2016
9,039 6.938 2010-2016
5,000 6.938 2009-2013
43,500 7.005 2010-2017
422,350 7.180 2005-2012
8,875 7.180 2006-2012
130,875 7.478 2011-2017
1,411,714 7.718 2010-2017
16,650 7.718 2010-2014
10,875 7.718 2011-2017
17,750 7.718 2010-2017
400,025 7.790 2003-2010
5,500 7.790 2004-2010
317,600 7.960 2004-2011
5,875 7.960 2005-2011
Number of ADRs
under option
Exercise price
per ADR ($)
Exercise
dates
54,510 30.800 2006-2013
64,605 49.880 2007-2014
35,710 53.030 2005-2012
33,780 56.480 2004-2011
144,995 59.520 2008-2015
201,594 60.690 2009-2016
269,038 75.760 2010-2017

Young & Rubicam Inc 1997 Incentive Compensation Plan
As of 31 December 2007, unexercised options over ordinary shares of 581,929 and unexercised options over ADRs of 479,920 have been granted under the Young & Rubicam Inc 1997 Incentive Compensation Plan as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
83,500 4.705 2000-2008
208,751 6.163 2000-2009
41,750 6.328 2000-2009
227,053 7.052 2000-2010
10,437 7.569 2000-2009
10,438 8.996 2000-2010
Number of ADRs
shares under option
Exercise price
per Adr ($)
Exercise
dates
124,437 44.611 2000-2009
10,985 46.557 2000-2009
11,481 48.204 2000-2010
174,156 51.048 2000-2010
25,050 53.443 2000-2009
83,500 54.042 2000-2009
33,400 56.287 2000-2009
1,963 59.656 2000-2010
6,263 60.479 2000-2010
2,923 63.772 2000-2010
1,670 71.781 2000-2010
1,587 72.605 2000-2010
2,505 84.731 2000-2010

Tempus Group plc 1998 Long Term Incentive Plan
As at 31 December 2007, unexercised options over ordinary shares of 106,295 have been granted under the Tempus Group plc 1998 Long Term Incentive Plan as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
49,827 2.260 2001-2008
24,306 4.920 2001-2011
12,153 5.580 2001-2011
20,009 6.000 2001-2010

The Grey Global Group, Inc 1994 Stock Incentive Plan
As at 31 December 2007, unexercised options over ordinary shares of 54,365 and unexercised options over ADRs of 147,394 have been granted under the Grey Global Group, Inc 1994 Stock Incentive Plan as follows:

Number of ADRs under option Exercise price
per ADR ($)
Exercise
dates
54,365 3.499 2007-2011
Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
11,525 14.370 2005-2009
20,810 19.540 2005-2010
2,914 27.290 2005-2011
7,089 28.210 2006-2013
1,827 28.300 2005-2012
4,545 29.410 2005-2011
7,046 32.270 2007-2011
5,807 30.830 2005-2012
5,785 31.220 2005-2012
6,371 31.420 2005-2012
21,745 31.750 2008-2011
6,264 31.940 2007-2011
10,874 33.500 2007-2011
21,745 34.120 2007-2011
13,047 36.110 2008-2010

24/7 Real Media, Inc 2002 Stock Incentive Plan
As at 31 December 2007, unexercised options over ADRs of 236,822 have been granted under the 24/7 Real Media, Inc 2002 Stock Incentive Plan as follows:

Number of ADRs
under option
Exercise price
per ADR ($)
Exercise
dates
8 1.340 2007-2013
2,988 15.880 2007-2014
427 17.150 2007-2014
434 18.230 2007-2015
109 18.420 2007-2015
114 19.250 2007-2015
76 19.310 2007-2015
147 19.370 2007-2015
296 19.440 2007-2015
1,574 19.950 2007-2015
69 20.010 2007-2015
187 20.070 2007-2015
414 20.330 2007-2015
137 20.640 2007-2015
46 20.770 2007-2014
28 20.840 2007-2014
250 20.960 2007-2015
112 21.030 2007-2014
42 21.220 2007-2014
89 21.600 2007-2014
132 22.490 2007-2015
99 22.550 2007-2015
66 22.870 2007-2015
79 23.180 2007-2015
167 23.440 2007-2015
289 23.820 2007-2014
16 23.950 2007-2014
654 24.200 2007-2014
246 24.330 2007-2014
161 25.150 2007-2015
177 25.410 2007-2014
118 25.600 2007-2015
118 25.660 2007-2015
315 25.920 2007-2015
157 25.980 2007-2015
553 26.110 2007-2015
400 26.870 2007-2015
1,023 27.120 2007-2015
79,771 27.500 2007-2015
374 28.520 2007-2014
148 28.770 2007-2015
170 34.620 2007-2015
170 34.680 2007-2015
102 34.930 2007-2015
205 35.060 2007-2015
629 37.730 2007-2015
92 37.850 2007-2015
89 38.870 2007-2015
114,820 40.650 2007-2015
110 41.470 2007-2015
2,017 44.710 2007-2015
533 45.290 2007-2016
594 45.410 2007-2016
143 45.730 2007-2015
341 46.050 2007-2016
1,903 46.170 2007-2015
190 46.300 2007-2015
69 46.620 2007-2016
157 46.750 2008-2017
95 47.000 2007-2015
393 48.270 2008-2017
345 48.330 2007-2016
597 48.590 2007-2016
157 48.650 2007-2016
235 48.970 2008-2017
143 49.100 2007-2015
157 49.540 2007-2016
115 49.600 2007-2016
314 49.670 2007-2016
89 50.490 2007-2016
785 50.680 2007-2016
393 50.750 2008-2017
78 51.000 2008-2017
236 51.130 2007-2016
550 51.380 2008-2017
156 52.400 2007-2016
234 52.590 2008-2017
99 52.910 2007-2016
157 53.030 2008-2017
70 53.410 2007-2016
157 53.480 2008-2017
78 53.670 2008-2017
701 53.790 2007-2016
314 54.110 2007-2016
1,258 54.240 2007-2016
974 54.560 2007-2016
158 54.680 2007-2016
157 54.870 2007-2016
393 55.130 2007-2016
1,022 55.260 2007-2016
78 55.380 2007-2016
115 55.450 2007-2016
157 55.570 2007-2016
179 55.640 2007-2016
472 55.760 2007-2016
105 55.890 2007-2016
549 56.270 2007-2016
392 56.340 2007-2016
148 56.650 2007-2016
574 56.720 2007-2016
138 56.910 2007-2016
235 57.480 2008-2017
157 57.670 2007-2016
262 57.730 2007-2016
157 58.110 2007-2016
354 58.680 2007-2016
863 58.940 2007-2017
314 59.070 2007-2016
157 59.190 2007-2016
393 60.020 2007-2016
156 61.230 2008-2017
78 61.800 2008-2017
324 61.920 2007-2016
471 62.050 2007-2016
157 62.240 2008-2017
472 62.810 2008-2017
45 62.880 2007-2014
786 62.940 2008-2017
314 63.130 2008-2017
157 63.320 2008-2017
314 63.640 2008-2017
708 63.890 2008-2017
112 64.270 2007-2016
54 64.650 2007-2016
56 64.850 2007-2016
156 64.970 2007-2016
78 65.540 2007-2016
212 66.430 2007-2016
112 67.580 2007-2016
157 70.500 2008-2017
550 74.240 2008-2017

The aggregate status of the WPP Share Option Schemes during 2007 was as follows:
Movement on options granted (represented in ordinary shares)

  Outstanding   Exercisable
  1
January
2007
number
Granted
number
Exercised
number
Lapsed
number
31
December
2007
number
  Exercisable
31
December
2007
number
WPP 37,198,388 76,206 (3,499,794) (2,042,924) 31,731,876   30,641,052
WWOP 10,380,987 3,589,375 (1,682,202) (2,428,850) 9,859,310   2,872,550
Y&R 4,823,489 (1,740,866) (101,094) 2,981,529   2,981,529
Tempus 273,196 (166,901) 106,295   106,295
Grey 1,376,015 (584,680) 791,335   404,478
24/7 1,543,8801 (305,620) (54,150) 1,184,110   291,985
  54,052,075 5,209,461 (7,813,162) (4,793,919) 46,654,455   37,297,889

Note
1 Granted as consideration for acquisition of 24/7.

Weighted-average exercise prie for options over:

  Outstanding   Exercisable
  1
January
2007
Granted Exercised Lapsed 31
December
2007
  Exercisable
31
December
2007
Ordinary shares (£)
WPP 5.298 6.956 3.844 5.805 5.454   5.431
WWOP 6.228 7.681 4.822 6.457 6.875   6.532
Y&R 5.658 n/a 4.321 6.845 6.389   6.389
Tempus 3.332 n/a n/a 2.938 3.952   3.952
Grey 2.279 n/a 1.616 n/a 3.499   3.499
ADRs ($)
WPP 46.402 71.338 40.852 40.127 46.940   46.485
WWOP 54.042 75.760 48.002 62.245 62.109   46.144
Y&R 42.743 n/a 30.594 14.453 50.774   50.774
Grey 28.124 n/a 26.746 n/a 29.024   25.439
24/7 n/a 37.169 38.094 41.030 36.753   34.789

Options over ordinary shares

  Outstanding   Exercisable
  Range of
exercise
prices
£
Weighted
average
exercise
price
£
Weighted
average
contractual
life
Months
  Weighted
average
contractual
life
Months
Aggregate
intrinsic
value
£m
  2.260-10.770 5.906 84   85 12.5

Options over ADRs

  Outstanding   Exercisable
  Range of
exercise
prices
$
Weighted
average
exercise
price
$
Weighted
average
contractual
life
Months
  Weighted
average
contractual
life
Months
Aggregate
intrinsic
value
$m
  1.340-84.731 48.562 86   87 80.7

As at 31 December 2007 there was £7.7 million (2006: £12.7 million) of total unrecognised compensation cost related to share options. That cost is expected to be recognised over a weighted average period of 17 months (2006: 16 months).

Share options are satisfied out of newly issued shares.

The weighted average fair value of options granted in the year calculated using the Black-Scholes model, was as follows:

  2007 2006 2005
Fair value of UK options (shares) 188.3p 203.5p 209.3p
Fair value of US options (ADRs) $17.85 $20.15 $18.42
Weighted average assumptions:
UK Risk-free interest rate 5.26% 4.72% 4.77%
US Risk-free interest rate 4.53% 4.47% 4.06%
Expected life (months) 48 48 48
Expected volatility 25% 35% 40%
Dividend yield 1.5% 1.7% 1.4%

Options are issued at an exercise price equal to market value on the date of grant.

The weighted average share price of the Group for the year ended 31 December 2007 was £7.09 (2006: £6.58, 2005: £5.88) and the weighted average ADR price for the same period was $71.04 (2006: $60.60, 2005: $53.24).

Expected volatility is sourced from external market data and represents the historic volatility in the Group's share price over a period equivalent to the expected option life.

Expected life is based on a review of historic exercise behaviour in the context of the contractual terms of the options, as described in more detail below.

Terms of share option plans
The Worldwide Share Ownership Program is open for participation to employees with at least two years' employment in the Group. It is not available to those participating in other share-based incentive programs or to executive directors. The vesting period for each grant is three years and there are no performance conditions other than continued employment with the Group.

The Executive Stock Option Plan has historically been open for participation to WPP Group Leaders, Partners and High Potential Group. It is not currently offered to parent company executive directors. The vesting period is three years and performance conditions include achievement of various TSR (Total Share Owner Return) and EPS (Earnings per Share) objectives, as well as continued employment. In 2005, the Group moved away from the issuance of stock options for Leaders, Partners and High Potential Group and has since largely made grants of restricted stock instead (note 22).

The Group grants stock options with a life of ten years, including the vesting period. The terms of stock options with performance conditions are such that if, after nine years and eight months, the performance conditions have not been met, then the stock option will vest automatically.