The Executive Directors, Management Board members and senior managers are also eligible to participate in the following all employee share schemes which are designed to incentivise employees of the Group by giving them opportunities to build a shareholding in the Company: the British American Tobacco Sharesave Scheme (Sharesave Scheme) and the Employee Share Ownership Plan.
The Sharesave Scheme is approved by HM Revenue & Customs (HMRC). Eligible employees, including the Executive Directors and Management Board members, have been granted employee savings-related share options to subscribe for ordinary shares in the Company. Grants of options under the Sharesave Scheme have historically been made in November each year. However, during 2010 the Company reviewed its timetable for making grants of options under the Sharesave Scheme with the result that no grants were made in that year. Instead, the Company intends to make its next grant of options under the Sharesave Scheme in March 2011 following the 2010 Preliminary announcement. Options will be granted to be exercisable in conjunction with either a three year or five year savings contract up to a monthly limit of £250. Options are normally granted at a discount of 20 per cent to the market price at the time of the invitation, as permitted under the rules of the Sharesave Scheme. At 31 December 2010, Nicandro Durante and Ben Stevens each held options under the Sharesave Scheme.
The Employee Share Ownership Plan is an HMRC approved share incentive plan, which incorporates a Partnership and Free Shares element. The Partnership Share Scheme is open to all eligible employees, including Executive Directors and Management Board members. Employees can allocate part of their pre-tax salary to purchase shares in the Company. The maximum amount that can be allocated in this way is £1,500 in any year. Shares purchased are held in a UK-based trust, normally capable of transfer to participants tax-free after a five year holding period. At 31 December 2010, Paul Adams and Nicandro Durante participated in the Partnership Share Scheme.
The Company also operates the Free Shares element of the plan, known as the Share Reward Scheme. Under this Scheme, eligible employees (including Executive Directors and members of the Management Board) receive an award of shares in April of each year in which the Scheme operates in respect of performance in the previous financial year. An award of £2,610 will be made to Executive Directors and Management Board members on 1 April 2011 in respect of the year ended 31 December 2010. The performance conditions are aligned to those set for the IEIS in respect of the same performance period. The plan shares are held in a UK-based trust for a minimum period of three years and during that time the trust will exercise its voting rights as directed by the plan’s participants. The maximum individual award under the Share Reward Scheme is £3,000.