REED ELSEVIER NV > NOTES TO THE FINANCIAL STATEMENTS Share option schemes 16 REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 101 The R-shares are held by a subsidiary company of Reed Elsevier PLC. The R-shares are convertible at the election of the holder into ten ordinary shares each. They have otherwise the same rights as the ordinary shares, except that Reed Elsevier NV may pay a lower dividend on the R-shares. A summary of the movement in share options is presented in the table below: Share options are granted under the Reed Elsevier Group plc Executive Share Option Scheme, the Reed Elsevier Group plc Senior Executive Long Term Incentive Scheme, and, prior to 1999, under the Reed Elsevier NV share option scheme. In addition nil cost options were granted to certain senior executives. Share options will generally be met by the issue of new Reed Elsevier NV shares. Certain share options will be met by the Reed Elsevier Employee Benefit Trust ("EBT") from shares purchased in the market. During the year a total of 405,812 ordinary shares in the company, having a nominal value of  € 0.02m, were allotted in connection with the exercise of share options. The net consideration received by the company was  € 3m. The average exercise price of share options outstanding at the end of the year was  € 11.62 (2002:  € 12.36) and the average term of these options is four years (2002: four years). Authorised Issued and fully paid 2003 2002 No. of shares € m No. of shares € m No. of shares € m Ordinary shares  € 0.06 2,100,000,000 126 738,760,906 44 738,355,094 44 R-shares  € 0.60 30,000,000 18 4,679,249 3 4,679,249 3 Total 144 47 47 Called up share capital 17 Outstanding Granted Exercised Lapsed Outstanding Exercise 1 January during the  during the during the 31 December price range Issued in Expiring in 2003 year year year 2003 (Euro) 1998 2004 – 2008 1,245,040 – – 681,208 563,832 12.50 – 15.70 1999 2004 – 2009 8,391,092 – 694,689 469,216 7,227,187 Nil – 17.07 2000 2004 – 2010 10,868,544 – 36,137 579,052 10,253,355 Nil – 15.70 2001 2006 – 2011 6,138,599 – – 340,574 5,798,025 11.65 – 15.43 2002 2007 – 2012 6,058,445 – – 262,884 5,795,561 11.97 – 16.00 2003 2006 – 2013 – 11,141,912 43,919 317,137 10,780,856 Nil – 11.04 Total 32,701,720 11,141,912 774,745 2,650,071 40,418,816