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17 Share Capital and Share PremiumThe authorised share capital of the Company is £120m comprising 2,400,000,000 shares of 5p each.
At 31 December 1998 there were options subsisting under share option schemes to subscribe for 28,126,716 (35,110,240) shares at prices ranging from 163 pence to 759 pence (150 pence to 505 pence) and exercisable by the year 2005 (2005). The Company has established trusts to facilitate the delivery of shares under employee incentive plans and savings-related share option schemes. At 31 December 1998, 8.3m Prudential Corporation shares with a market value of £75m were held in trusts relating to incentive plans. The arrangements for distribution of shares held in these trusts to employees and for entitlement to dividends depend upon the particular terms of each incentive plan. The costs of share awards under the plans are charged to the profit and loss account over the period of service to which awards are made. Shares held in these trusts are conditionally gifted to employees. At 31 December 1998, 4.1m shares were held by a qualifying employee share ownership trust. These shares are expected to be fully distributed shortly after 1 June 1999 on maturity of a savings-related share option scheme. The exercise price under this scheme is £2.49 and the expected proceeds of £10m relating to these shares have been included in the consolidated balance sheet. A reconciliation of the weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share is set out below:
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