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ANNUAL REPORT AND FINANCIAL STATEMENTS 2011 | 65


10. Earnings per share continued


Potential future dilution The following share-based payment arrangements could potentially dilute basic earnings per share in the future, but were not included in the above calculation of diluted earnings per share because they were either anti-dilutive for the years presented or had not met the relevant performance criteria at the reporting date:


• Long-Term Remuneration Plan (restricted awards)


• F&C REIT variable NCI SBP This earn-out arrangement gives the F&C REIT NCI partners the opportunity to increase their ownership of F&C REIT from 30% to 40% before 31 December 2014. At 31 December 2011, the Directors do not expect any of the ownership percentage to transfer. Any transfer would potentially dilute the profits attributable to the equity holders of the parent. However, the principle of this incentive arrangement is that the incremental profits which would become attributable to NCI as a result of achieving the performance criteria are funded from the increased level of absolute profits generated by F&C REIT for the year in which vesting arises, rather than diluting the current level of profits attributable to equity holders of the parent. There can be no guarantee that, subsequent to vesting, the higher level of profits which met the vesting criteria would be sustainable.


• TRC Management Incentive Plan


• TRC Commutation arrangements The Divisional Members of TRC Investment Teams have put and call options to transfer up to 20% of their entitlement to management fee profits of their respective Investment Teams to F&C. The exercise of these options is expected to enhance the profits attributable to equity holders of the parent. However, there can be no guarantee that, subsequent to the exercise of the options, a higher level of absolute profits would be sustainable.


• Share Save Scheme


• 1995 and 2002 Executive Share Option Schemes At 31 December 2011, the 909,900 (31 December 2010: 1,318,528) options outstanding have all vested. These have exercise prices between 139.00p and 240.83p and are anti-dilutive as the option prices are above the average share price for the year.


Details of all awards potentially dilutable, together with the total number of awards outstanding at each reporting date, are disclosed in note 26.


In addition, the TRC conditional consideration payment (as detailed in note 15(a)) could potentially dilute earnings per share. Under the acquisition agreement, one further potential instalment of up to £10.0m is payable to the vendors where the Run-rate EBITDA performance target is achieved. While the achievement of the performance criteria would enhance the level of profits attributable to the equity holders of the parent, there can be no guarantee that the higher level of profits which met the performance criteria would be sustainable.


11. Ordinary dividends Declared and paid during the year


Equity dividends on Ordinary Shares: Final dividend for 2010: 2.0p (2009: 4.0p) Interim dividend for 2011: 1.0p (2010: 1.0p)


Proposed for approval at the Annual General Meeting Equity dividends on Ordinary Shares: Final dividend for 2011: 2.0p (2010: 2.0p)


2011 £m


10.4 5.2


15.6 10.4


2010 £m


19.4 5.1


24.5 10.3


The entitlement of Employee Benefit Trusts to receive dividends (on some of their holdings of F&C shares) has been waived by the Trustees. This has resulted in the following dividends being waived:


Shares


2011 Dividends 2010 Final


2011 Interim


2010 Dividends 2009 Final


2010 Interim


14,436,341 11,008,289


9,169,006 17,372,505


£m


0.3 0.1


0.4 0.2


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