To satisfy the future exercise of awards or options under the Group's employee share schemes, ordinary shares are acquired in the market by the Group's employee share ownership trusts or the Company issues new shares.
During the year, new ordinary shares were issued by the Company in relation to the Sharesave Scheme and to certain participants in the Share Option Scheme resident outside the UK.
Under the Sharesave Scheme, a total of 881,981 options over ordinary shares in the Company were outstanding at 31 December 2010. The options outstanding under the Sharesave Scheme are exercisable until June 2015 at option prices ranging from 977p to 1,555p.
BATGET is used to satisfy the vesting and exercise of awards of ordinary shares made under the Deferred Share Bonus Scheme, and the 1998 LTIP and the 2007 LTIP as well as the exercise of options under the Share Option Scheme. The number of shares held in BATGET to satisfy outstanding awards is consistently monitored by a committee of senior management that reports to a committee of the Board. BATGET is funded by interest-free loan facilities from the Company totalling £400 million, enabling the trust to facilitate the purchase of ordinary shares to satisfy the future vesting or exercise of options and awards. The loan to BATGET amounted to £325 million at 31 December 2010 (2009: £273 million). The loan is either repaid from the proceeds of the exercise of options or, in the case of ordinary shares acquired by BATGET to satisfy the vesting and exercise of awards, the Company will subsequently waive the loan provided over the life of the awards. If the options lapse, ordinary shares may be sold by BATGET to cover the loan repayment.
BATGET currently waives dividends on the ordinary shares held by it. As at 31 December 2010, BATGET held 11,949,088 ordinary shares with a market value of £294.4 million (1 January 2010: 14,679,045 ordinary shares; £296.0 million), being 0.59 per cent of the Company's issued ordinary share capital (1 January 2009: 0.72 per cent) (including treasury shares). BATGET waived payment of the final dividend for 2009 of £9.9 million in May 2010 and the interim dividend for 2010 of £4.1 million in September 2010.
While shares are held by BATGET, the trustee does not exercise any voting rights. However, as soon as shares held in BATGET are transferred out to share scheme participants, the participants may exercise the voting rights attaching to those shares.
Details of the Company's material share-based payment arrangements, reflecting both equity share-based and cash-settled share-based arrangements, are set out in note 27 to the accounts.