Notes 26-31

26. Authorised and issued share capital


 
Equity
ordinary
shares
Nominal
value
£m
Authorised
At 1 January 2007 – WPP 2008 Limited
(formerly WPP Group plc)

1,750,000,000

175.0
At 31 December 2007 – WPP 2008 Limited
(formerly WPP Group plc)
1,750,000,000 175.0
At 31 December 2008 – WPP plc
(formerly Project Air Limited)
1,750,000,000 175.0
 
Issued and fully paid
At 1 January 2007 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 1 January 2008 1,191,491,263 119.2
Exercise of share options 2,103,054 0.2
Acquisitions 77,879,143 7.8
Share cancellations (18,820,814) (1.9)
At 19 November 2008 – shares in WPP 2008 Limited
(formerly WPP Group plc) of 10p each
1,252,652,646 125.3

On formation of WPP plc
Group reconstruction – shares in WPP 2008 Limited
(formerly WPP Group plc) exchange for shares in
WPP plc of 10p each

1,252,652,646

125.3
Exercise of share options 49,827 0.0
Acquisitions 2,640,790 0.2
At 31 December 2008 1,255,343,263 125.5

On 19 November 2008 under a scheme of arrangement between WPP 2008 Limited (formerly WPP Group plc), the former holding company of the Group, and its shareholders under Part 26 of the Companies Act 2006, and as sanctioned by the High Court, all the issued shares in that company were cancelled and the same number of new shares were issued to WPP plc in consideration for the allotment to shareholders of one ordinary share in WPP plc for each ordinary share in WPP 2008 Limited held on the record date, 18 November 2008.

In the above table the figures up to 19 November 2008 relate to shares in WPP 2008 Limited. Subsequent movements relate to shares in WPP plc.

WPP plc was incorporated on 12 September 2008 with an authorised share capital of £10,000 and 20 issued ordinary shares of 10 pence each. The authorised share capital of WPP plc was increased by written resolution from £10,000 to £175,000,000 by the creation of an additional 1,749,900,000 ordinary shares of 10 pence each.

On 19 November 2008 as part of the scheme of arrangement noted above, a further 1,252,652,646 ordinary shares were issued at a price of 340.75 pence each, whereby WPP plc was interposed as the new holding company of the WPP Group.

On 24 November 2008 the entire balance standing to the credit of the share premium account was transferred to retained earnings as sanctioned by The Royal Court of Jersey. As a result £4,143.1 million was added to retained earnings for both WPP plc and the Group. For the Company this amount is distributable.

Share options
WPP Executive Share Option Scheme

As at 31 December 2008, unexercised options over ordinary shares of 10,736,711 and unexercised options over ADRs of 3,408,168 have been granted under the WPP Executive Share Option Scheme as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
12,195 3.414 2012 - 2018
21,197 3.763 2006 - 2013
4,239 3.763 2006 - 2013
92,804 4.210 2005 - 2012
1,254,487 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
55,165 4.865 2004 - 2011
945,881 4.865 2004 - 2011
31,558 4.865 2005 - 2011
31,429 5.185 2002 - 2009
- 2000,000 5.490 2007 - 2014
27,288 5.520 2008 - 2014
162,589 5.535 2007 - 2014
968,949 5.535 2007 - 2014
883,737 5.535 2007 - 2014
37,932 5.535 2008 - 2014
6,124 5.535 2007 - 2015
24,390 5.535 2007 - 2014
2,469 5.535 2007 - 2014
235,355 5.535 2007 - 2014
194,057 5.595 2006 - 2013
1,612,345 5.595 2006 - 2013
17,194 5.595 2006 - 2014
39,698 5.595 2007 - 2013
13,348 5.595 2006 - 2013
15,868 5.595 2006 - 2013
24,680 5.595 2006 - 2013
285,808 5.595 2006 - 2013
213,034 5.700 2002 - 2009
7,740 5.725 2007 - 2014
7,257 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
6,705 5.895 2008 - 2015
2,235 5.895 2008 - 2015
10,907 5.895 2008 - 2015
6,402 5.903 2011 - 2018
6,402 5.903 2011 - 2018
4,268 5.903 2011 - 2018
4,389 6.105 2008 - 2015
11,396 6.105 2008 - 2015
4,914 6.105 2008 - 2015
802 6.228 2010 - 2017
7,876 6.228 2011 - 2017
4,817 6.228 2010 - 2017
4,280 6.718 2009 - 2016
8,560 6.718 2009 - 2016
23,480 6.718 2009 - 2016
69,369 6.718 2009 - 2016
19,566 6.718 2011 - 2016
- 2062 6.938 2009 - 2016
45,153 7.180 2005 - 2012
28,050 7.550 2005 - 2012
23,562 7.550 2005 - 2012
57,072 7.550 2005 - 2012
240,447 7.550 2005 - 2012
3,741 7.550 2006 - 2012
14,283 7.723 2010 - 2017
21,372 8.110 2004 - 2011
34,982 8.110 2004 - 2011
5,694 8.193 2004 - 2011
17,505 8.193 2004 - 2011
337,056 9.010 2003 - 2010
11,575 9.010 2004 - 2010
97,303 9.010 2003 - 2010
18,836 10.770 2003 - 2010
8,996 10.770 2003 - 2010
Number of ADRs
under option
Exercise price
per ADR ($)
Exercise
dates
11,294 30.080 2006 - 2013
2,692 30.080 2006 - 2013
1,644 30.410 2011 - 2018
486,796 33.200 2005 - 2012
7,227 33.200 2005 - 2012
2,881 34.702 2005 - 2012
295,457 35.380 2004 - 2011
185,688 46.475 2002 - 2009
859,550 47.410 2006 - 2013
28,047 47.410 2006 - 2013
38,688 47.410 2006 - 2013
3,163 47.410 2006 - 2013
1,548 48.450 2007 - 2014
14,006 50.670 2008 - 2015
197 50.670 2008 - 2015
878,136 50.800 2007 - 2014
196 50.800 2007 - 2014
14,858 50.800 2007 - 2014
2,952 50.800 2007 - 2014
39,754 50.800 2007 - 2014
32,402 51.220 2007 - 2014
14,280 53.030 2005 - 2012
13,764 54.050 2005 - 2012
118,486 54.050 2005 - 2012
18,439 54.230 2008 - 2015
458 54.570 2008 - 2015
4,581 54.570 2008 - 2015
7,178 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
15,564 58.238 2004 - 2011
856 58.460 2009 - 2016
22,666 58.460 2009 - 2016
856 58.460 2009 - 2016
8,630 58.886 2004 - 2011
844 59.170 2011 - 2018
1,267 59.170 2011 - 2018
16,210 61.690 2009 - 2016
30,820 62.110 2003 - 2010
2,415 62.110 2005 - 2010
796 62.810 2010 - 2017
167,709 63.263 2003 - 2010
468 63.900 2009 - 2016
2,423 63.900 2009 - 2016
2,007 74.720 2010 - 2017
4,936 75.940 2010 - 2017
11,884 84.485 2003 - 2010
WPP Worldwide Share Ownership Program

As at 31 December 2008, unexercised options over ordinary shares of 6,598,264 and unexercised options over ADRs of 923,010 have been granted under the WPP Worldwide Share Ownership Program as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
197,550 3.903 2006 - 2013
1,400 3.903 2006 - 2013
3,000 3.903 2006 - 2013
4,800 3.903 2007 - 2013
8,350 4.210 2005 - 2012
1,625 4.210 2005 - 2013
56,000 4.819 2011 - 2018
875 5.210 2004 - 2011
87,625 5.315 2002 - 2009
338,225 5.435 2007 - 2013
7,250 5.775 2008 - 2015
31,800 5.913 2011 - 2018
129,500 5.917 2011 - 2018
3,125 5.990 2004 - 2011
1,555,124 6.028 2011 - 2018
840,512 6.195 2008 - 2015
10,794 6.668 2008 - 2015
95,323 6.740 2008 - 2015
911,714 6.938 2008 - 2015
35,637 7.005 2008 - 2015
375,500 7.180 2005 - 2012
7,250 7.180 2006 - 2012
102,802 7.478 2008 - 2015
1,138,583 7.718 2008 - 2015
367,075 7.790 2003 - 2010
286,825 7.960 2004 - 2011
Number of ADRs
under option
Exercise price
per ADR ($)
Exercise
dates
42,530 30.800 2006 - 2013
52,660 49.880 2006 - 2013
30,255 53.030 2005 - 2012
29,645 56.480 2004 - 2011
277,280 59.500 2011 - 2018
122,546 59.520 2008 - 2015
159,556 60.690 2008 - 2015
208,538 75.760 2008 - 2015
Young & Rubicam Inc 1997 Incentive Compensation Plan

As at 31 December 2008, unexercised options over ordinary shares of 430,584 and unexercised options over ADRs of 381,298 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
178,482 6.1630 2000 - 2009
41,750 6.3284 2000 - 2009
189,477 7.0523 2000 - 2010
10,437 7.5693 2000 - 2009
10,438 8.9963 2000 - 2010
Number of ADRs
under option
Exercise price
per ADR ($)
Exercise
dates
104,605 44.6108 2000 - 2009
9,485 46.5569 2000 - 2009
11,481 48.2036 2000 - 2010
132,855 51.0479 2000 - 2010
25,050 53.4431 2000 - 2009
83,500 54.0419 2000 - 2009
1,044 59.6557 2000 - 2010
6,263 60.4790 2000 - 2010
2,923 63.7725 2000 - 2010
1,587 72.6048 2000 - 2010
2,505 84.7305 2000 - 2010
Tempus Group plc 1998 Long Term Incentive Plan

As at 31 December 2008, unexercised options over ordinary shares of 56,468 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
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 2008, unexercised options over ordinary shares of 54,365 and unexercised options over ADRs of 97,726 have been granted under the Grey Global Group, Inc 1994 Stock Incentive Plan as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
54,365 3.499 2007 - 2011
Number of ADRs
under option
Exercise price
per ADR ($)
Exercise
dates
7,524 14.3700 2005 - 2009
16,461 19.5400 2005 - 2010
2,914 27.2900 2005 - 2011
7,089 28.2100 2006 - 2013
1,827 28.3000 2007 - 2012
4,545 29.4100 2005 - 2011
7,046 30.2700 2008 - 2011
3,632 30.8300 2007 - 2012
6,371 31.4200 2005 - 2012
17,396 31.7500 2008 - 2011
6,264 31.9400 2007 - 2011
3,610 33.5000 2009 - 2011
13,047 36.1100 2008 - 2010
24/7 Real Media, Inc 2002 Stock Incentive Plan

As at 31 December 2008, unexercised options over ADRs of 164,068 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 1.3400 2007 - 2013
1,024 15.8800 2007 - 2014
427 17.1500 2007 - 2014
229 18.2300 2007 - 2015
76 19.3100 2007 - 2015
30 19.3700 2007 - 2015
217 19.4400 2007 - 2015
69 20.0100 2007 - 2015
187 20.0700 2007 - 2015
414 20.3300 2007 - 2015
137 20.6400 2007 - 2015
46 20.7700 2007 - 2014
12 20.8400 2007 - 2014
90 20.9600 2007 - 2015
112 21.0300 2007 - 2014
66 21.6000 2007 - 2014
66 22.4900 2007 - 2015
66 22.8700 2007 - 2015
79 23.1800 2007 - 2015
167 23.4400 2007 - 2015
19 23.8200 2007 - 2014
6 23.9500 2007 - 2014
369 24.2000 2007 - 2014
146 24.3300 2007 - 2014
50 25.1500 2007 - 2015
177 25.4100 2007 - 2014
118 25.6000 2007 - 2015
315 25.9200 2007 - 2015
316 26.1100 2007 - 2015
98 26.8700 2007 - 2015
1,023 27.1200 2007 - 2015
36,169 27.5000 2007 - 2015
153 28.5200 2007 - 2014
148 28.7700 2007 - 2015
170 34.6200 2007 - 2015
102 34.9300 2007 - 2015
205 35.0600 2007 - 2015
629 37.7300 2007 - 2015
92 37.8500 2007 - 2015
89 38.8700 2007 - 2015
104,678 40.6500 2007 - 2016
110 41.4700 2007 - 2015
343 44.7100 2007 - 2015
533 45.2900 2007 - 2016
426 45.4100 2007 - 2016
118 46.0500 2007 - 2016
69 46.6200 2007 - 2016
345 48.3300 2007 - 2016
472 48.5900 2007 - 2016
157 48.6500 2007 - 2016
78 48.9700 2008 - 2017
157 49.5400 2007 - 2016
115 49.6000 2007 - 2016
314 49.6700 2007 - 2016
89 50.4900 2007 - 2016
471 50.6800 2007 - 2016
236 50.7500 2008 - 2017
32 51.0000 2008 - 2017
550 51.3800 2008 - 2017
78 52.4000 2007 - 2016
156 52.5900 2008 - 2017
99 52.9100 2007 - 2016
92 53.1000 2006 - 2017
70 53.4100 2007 - 2016
157 53.4800 2008 - 2017
78 53.6700 2008 - 2017
591 53.7900 2007 - 2016
314 54.1100 2007 - 2016
944 54.2400 2007 - 2016
758 54.5600 2007 - 2016
629 55.2600 2007 - 2016
78 55.3800 2007 - 2016
179 55.6400 2007 - 2016
59 55.7600 2007 - 2016
105 55.8900 2007 - 2016
235 56.2700 2007 - 2016
78 56.3400 2007 - 2016
574 56.7200 2007 - 2016
138 56.9100 2007 - 2016
78 57.4800 2008 - 2017
157 58.1100 2007 - 2016
549 58.9400 2007 - 2017
314 59.0700 2007 - 2016
393 60.0200 2007 - 2016
156 61.2300 2008 - 2017
324 61.9200 2007 - 2016
471 62.0500 2007 - 2016
786 62.9400 2008 - 2017
314 63.1300 2008 - 2017
157 63.3200 2008 - 2017
708 63.8900 2008 - 2017
112 64.2700 2007 - 2016
54 64.6500 2007 - 2016
56 64.8500 2007 - 2016
78 64.9700 2007 - 2016
78 65.5400 2007 - 2016
157 66.4300 2007 - 2016
112 67.5800 2007 - 2016
157 70.5000 2008 - 2017
236 74.2400 2008 - 2017
Taylor Nelson Sofres plc
2005 Long Term Incentive Plan

As at 31 December 2008, unexercised options over ordinary shares of 74,421 have been granted under the Taylor Nelson Sofres plc 2005 Long Term Incentive Plan as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
11,587 2011
29,854 2012
32,980 2013
2008 New Share Plan

As at 31 December 2008, unexercised options over ordinary shares of 28,649 have been granted under the Taylor Nelson Sofres plc 2008 New Share Plan as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates

 
28,649 2012
2005 Key Employee Equity Plan

As at 31 December 2008, unexercised options over ordinary shares of 4,520 have been granted under the Taylor Nelson Sofres plc 2005 Key Employee Equity Plan as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
245 2011
4,275 2012
1999 Worldwide Employee Sharesave Plan

As at 31 December 2008, unexercised options over ordinary shares of 1,844,183 have been granted under the Taylor Nelson Sofres plc 1999 Worldwide Employee Sharesave Plan as follows:

Number of ordinary
shares under option
Exercise price
per share (£)
Exercise
dates
46,826 1.2700 2010
872,518 1.7300 2013 - 2015
299,707 1.9500 2011 - 2012
226,825 2.2900 2009 - 2011
1,382 2.3900 2009
96,334 2.5600 2009 - 2012
168,014 2.6500 2012 - 2014
24,085 2.9900 2010 - 2011
101,891 3.0000 2011 - 2013
1,596 3.2000 2009
5,005 3.7400 2009

The aggregate status of the WPP Share Option Schemes during 2008 was as follows:

Movement on options granted (represented in ordinary shares)
  Outstanding Exercisable

 
 
 
1
January
2008
number

 
Granted
number

 
Exercised
number

 
Lapsed
number
31
December
2008
number
31
December
2008
number
WPP 31,731,876 48,042 (1,076,103) (2,926,264) 27,777,551 27,306,901
WWOP 9,859,310 3,752,125 (102,750) (2,295,371) 11,213,314 8,054,490
Y&R 2,981,529 (356,331) (288,124) 2,337,074 2,337,074
Tempus 106,295 (49,827) 56,468 56,468
Grey 791,335 (237,465) (10,875) 542,995 362,941
24/7 1,184,110 (268,805) (94,965) 820,340 699,990
TNS 1,951,7731 1,951,773 1,382
  46,654,455 5,751,940 (2,091,281) (5,615,599) 44,699,515 38,819,246

Note

1
Granted as consideration for acquisition of TNS.
Weighted-average exercise price for options over:
  Outstanding Exercisable

 
 
1
January
2008

 
Granted

 
Exercised

 
Lapsed
31
December
2008
31
December
2008
Ordinary shares (£)
WPP 5.454 4.865 3.553 5.944 5.543 5.527
WWOP 6.875 5.984 4.831 6.757 6.632 6.871
Y&R 6.389 n/a 6.648 5.114 6.673 6.673
Tempus 3.952 n/a 2.260 n/a 5.445 5.445
Grey 3.499 n/a n/a n/a 3.499 3.499
TNS n/a 1.902 n/a n/a 1.931 2.390
ADRs ($)
WPP 46.940 46.578 37.543 42.819 46.948 46.716
WWOP 62.109 59.500 41.061 63.058 61.202 61.932
Y&R 50.774 n/a 50.284 54.621 50.485 50.485
Grey 29.024 n/a 30.456 30.830 28.289 25.970
24/7 36.753 n/a 29.767 42.229 38.409 37.283
Options over ordinary shares

Outstanding

Range of
exercise prices
£
Weighted average
exercise price
£
Weighted average
contractual life
Months
nil-10.770 5.569 64
Options over ADRs

Outstanding

Range of
exercise prices
£
Weighted average
exercise price
£
Weighted average
contractual life
Months
1.340-84.731 49.216 59

As at 31 December 2008 there was £5.5 million (2007: £7.7 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 (2007: 17 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:

  2008 2007 2006
Fair value of UK options (shares) 129.5p 188.3p 203.5p
Fair value of US options (ADRs) $8.36 $17.85 $20.15
Weighted average assumptions:
UK Risk-free interest rate
3.93% 5.26% 4.72%
US Risk-free interest rate 2.25% 4.53% 4.47%
Expected life (months) 48 48 48
Expected volatility 25% 25% 35%
Dividend yield 1.75% 1.5% 1.7%

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 2008 was £5.12 (2007: £7.09, 2006: £6.58) and the weighted average ADR price for the same period was $48.26 (2007: $71.04, 2006: $60.60).

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.

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