Barclays plc - Annual Report 2008 - Financial statements - The Group
Barclays plc - Annual Report 2008 - Financial statements - The Group
Barclays plc - Annual Report 2008 - Financial statements - The Group
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45 Share-based payments (continued)<br />
Absa <strong>Group</strong> Limited Share Incentive Trust (AGLSIT)<br />
In terms of the rules of Absa <strong>Group</strong> Limited Share Incentive Trust, the maximum number of shares which may be issued or transferred and/or in respect<br />
of which options may be granted to the participants shall be limited to shares representing 10% of the total number of issued shares from time to time.<br />
This is an equity-settled share-based payment arrangement and options are allocated to Absa employees according to the normal human resources<br />
talent management processes. <strong>The</strong> options issued up to August 2005 had no performance criteria linked to them and vested in equal tranches after<br />
three, four and five years respectively. No dividends accrue to the option holder over the vesting period. <strong>The</strong> options expire after a period of ten years from<br />
the issuing date. Options issued since August 2005 have performance criteria associated with them, which require headline earnings per share to exceed<br />
an agreed benchmark over a three-year period from the grant date for the options to vest. Participants need to be in the employ of Absa at the vesting<br />
date in order to be entitled to the options.<br />
Absa <strong>Group</strong> Limited Share Ownership Administrative Trust (AGLSOT)<br />
AGLSOT enabled all Absa employees to participate in a one-off offer to purchase 200 redeemable cumulative option-holding preference shares. Each<br />
redeemable preference share carries the option to acquire one Absa ordinary share. Options vest after three years and lapse after five years from the date<br />
of issue. Exercise may occur in lots of 100 only and within a price range varying from R48 to R69 (£3.16–£4.55) dependent on the 30-day volume<br />
weighted trading price on the JSE Limited. Options are redeemed by Absa on the final exercise date.<br />
Absa <strong>Group</strong> Limited Executive Share Award Scheme (AGLESAS)<br />
<strong>The</strong> ESAS is an equity-settled share-based payment arrangement, where the participant’s notional bonus comprises a number of restricted nil-cost<br />
options, based on the allocation price of ordinary shares. Such an initial allocation is held in trust or in the name of the participant. If the participant is in<br />
the employ of the <strong>Group</strong> after the three-year vesting period, the participant will receive 20% matched shares. If the bonus award remains in the ESAS for<br />
another two years, the participant receives another 10% matched shares. Dividend shares are paid to participants on the ordinary shares as if the shares<br />
were held from inception. <strong>The</strong> number of dividend shares awarded is therefore calculated on the initial allocation and on the 20% and/or 10% matched<br />
shares, over the three- or five-year period. Employees that receive a performance bonus in excess of a predetermined amount were compelled to place a<br />
set percentage of their bonus award into the ESAS. Employees also had the option of utilising more of their bonus award for voluntary ESAS options.<br />
In addition, options remain outstanding under the following closed schemes:<br />
<strong>Barclays</strong> Global Investors Equity Ownership Plan (BGI EOP)<br />
<strong>The</strong> Equity Ownership Plan was extended to key employees of BGI. <strong>The</strong> exercise price of the options was determined by the Remuneration Committee of<br />
<strong>Barclays</strong> PLC based on the fair value of BGI as determined by an independent appraiser. <strong>The</strong> options were granted over shares in <strong>Barclays</strong> Global Investors<br />
UK Holdings Limited, a subsidiary of <strong>Barclays</strong> Bank PLC.<br />
Options are not exercisable until vesting, with a third of the options held generally becoming exercisable at each anniversary of grant. <strong>The</strong> shareholder has<br />
the right to offer to sell the shares to <strong>Barclays</strong> Bank PLC 355 days following the exercise of the option. <strong>Barclays</strong> Bank PLC may accept the offer and<br />
purchase the shares at the most recently agreed valuation but is under no obligation to do so. Options lapse ten years after grant. <strong>The</strong> most recently<br />
agreed valuation was £87.22, at 31st March <strong>2008</strong>. No awards were made under the BGI EOP in <strong>2008</strong>.<br />
Incentive Share Option Plan (ISOP)<br />
<strong>The</strong> ISOP was open by invitation to the employees and Directors of <strong>Barclays</strong> PLC. Options were granted at the market price at the date of grant calculated<br />
in accordance with the rules of the plan, and are normally exercisable between three and ten years from that date. <strong>The</strong> final number of shares over which<br />
the option may be exercised is determined by reference to set performance criteria. <strong>The</strong> number of shares under option represents the maximum possible<br />
number that may be exercised. No awards were made under ISOP during <strong>2008</strong>.<br />
Executive Share Option Scheme (ESOS)<br />
<strong>The</strong> ESOS is a long-term incentive scheme and was available by invitation to certain senior executives of the <strong>Group</strong> with grants usually made annually.<br />
Options were issued with an exercise price equivalent to the market price at the date of the grant without any discount, calculated in accordance with the<br />
rules of the scheme, and are normally exercisable between three and ten years from that date. No further awards are made under ESOS.<br />
Woolwich Executive Share Option Plan (Woolwich ESOP)<br />
Options originally granted over Woolwich PLC shares at market value were exercised in 2001 or exchanged, in accordance with the proposals made under<br />
the offer to acquire the Woolwich, for options over <strong>Barclays</strong> PLC shares. Under the rules of ESOP, the performance conditions attached to the exercise of<br />
options were disapplied on acquisition of Woolwich PLC by <strong>Barclays</strong>. Options lapse ten years after grant.<br />
At the balance sheet date the following cash-settled schemes operated within the <strong>Group</strong>:<br />
Absa <strong>Group</strong> Limited Phantom Performance Share Plan (Phantom PSP)<br />
<strong>The</strong> Phantom PSP is a cash-settled plan and payments made to participants in respect of their awards are in the form of cash. <strong>The</strong> Phantom PSP shares<br />
(and any associated notional dividend shares) are awarded at no cost to the participants. <strong>The</strong> amount that is ultimately paid to the participants is equal to<br />
the market value of a number of ordinary shares as determined after a three-year vesting period. <strong>The</strong> vesting of the Phantom PSP awards will be subject to<br />
two non-market performance conditions which will be measured over a three-year period, starting on the first day of the financial year in which the award<br />
is made. <strong>The</strong> award will vest after three years to the extent that the performance conditions are satisfied. <strong>The</strong>se awards are forfeited in total if Absa<br />
performance fails to meet the minimum criteria<br />
Absa <strong>Group</strong> Limited Phantom Executive Share Award Scheme (Phantom ESAS)<br />
<strong>The</strong> Phantom ESAS is a cash-settled share-based payment arrangement, where the participant’s notional bonus comprises a number of restricted nil-cost<br />
options, based on the allocation price of ordinary shares. If the participant is in the employ of the <strong>Group</strong> after the three-year vesting period, the participant<br />
will receive 20% bonus phantom shares. If the bonus award remains in the Phantom ESAS for another two years, the participant receives an additional<br />
10% bonus phantom shares. Dividend phantom shares are paid to participants on the ordinary phantom shares as if the shares were held from inception.<br />
<strong>The</strong> number of dividend phantom shares awarded is therefore calculated on the initial allocation and on the 20% and 10% bonus phantom shares, over<br />
the five-year period. Employees that receive performance bonuses in excess of a predetermined amount are compelled to place a set percentage of the<br />
bonus award in the Phantom ESAS. Employees also have the option of utilising more of their bonus award for voluntary ESAS phantom shares.<br />
3<br />
<strong>Financial</strong> <strong>statements</strong><br />
<strong>Barclays</strong> PLC <strong>Annual</strong> <strong>Report</strong> <strong>2008</strong> 259