Barclays 2009 Annual Report Download - page 263

www.barclays.com/annualreport09 Barclays PLC Annual Report 2009 261
44 Share-based payments continued
Options granted under the following schemes are over subsidiaries of Barclays PLC:
Absa Group Limited Share Incentive Trust (AGLSIT)
In terms of the rules of Absa Group Limited Share Incentive Trust, the maximum number of shares which may be issued or transferred and/or in respect
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.
This is an equity-settled share-based payment arrangement and options are allocated to Absa employees according to the normal human resources talent
management processes. The options issued up to August 2005 had no performance criteria linked to them and vested in equal tranches after three, four
and five years respectively. No dividends accrue to the option holder over the vesting period. The options expire after a period of ten years from the issuing
date. Options issued since August 2005 have performance criteria associated with them, which require headline earnings per share to exceed 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 date in order
to be entitled to the options.
Absa Group Limited Executive Share Award Scheme (AGLESAS)
The ESAS is an equity-settled share-based payment arrangement, where the participant’s notional bonus comprises a number of restricted nil-cost 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 the employ
of Absa after the three-year vesting period, the participant will receive 20% matched shares. If the bonus award remains in the ESAS for another two years,
the participant receives another 10% matched shares. Dividend shares are paid to participants on the ordinary shares as if the shares were held from
inception. The number of dividend shares awarded is therefore calculated on the initial allocation and on the 20% and/or 10% matched 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 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.
Absa Group Limited Performance Share Plan (AGLPSP)
The Performance Share Plan (PSP) was implemented in 2008. Performance shares are ‘free’ Absa Group Limited shares for which no exercise price is
payable and which qualify for dividends. Performance share awards are communicated to participants as an initial allocation. Absa Group Limited’s
performance over a three-year period determines the final number of shares that may be released to participants.
Options remain outstanding under the following closed schemes:
Incentive Share Option Plan (ISOP)
The ISOP was open by invitation to the employees and Directors of Barclays PLC. Options were granted at the market price at the date of grant calculated in
accordance with the rules of the plan, and are normally exercisable between three and ten years from that date. The final number of shares over which the
option may be exercised is determined by reference to set performance criteria. The number of shares under option represents the maximum possible
number that may be exercised. No awards were made under ISOP during 2009.
Woolwich Executive Share Option Plan (Woolwich ESOP)
Options originally granted over Woolwich PLC shares at market value were exercised in 2001 or exchanged, in accordance with the proposals made under
the offer to acquire the Woolwich, for options over Barclays PLC shares. Under the rules of ESOP, the performance conditions attached to the exercise of
options were disapplied on acquisition of Woolwich PLC by Barclays. Options lapse ten years after grant.
In addition, there were no options outstanding at year end under the following closed schemes:
Absa Group Broad-based Black Economic Empowerment transaction (BEE)
The Group entered into a black economic empowerment (BEE) transaction with Batho Bonke Capital (Proprietary) Limited in July 2004. The shares issued
in terms of the transaction vested immediately. Due to the shares issued vesting immediately and also as a result of the issue being before 1st January 2005,
the provisions of IFRS 2 Share-based payments were not applicable. In the current period 49.9% of the options were repurchased from Batho Bonke
(Proprietary) Limited at a discount to their fair value. Batho Bonke utilised the proceeds to exercise 11,970,536 options. The Group provided bridging
finance for the remaining 24,678,764 options. The life of these options was effectively extended for three months, effective 1st June 2009. The modification
did not result in an increase in the fair value of these options and therefore, in terms of the provisions of IFRS 2, no cost was recognised in the statement of
comprehensive income in the current period.
The bridging finance was redeemed on 1st September 2009 and Batho Bonke Capital (Proprietary) Limited exercised the balance of the options outstanding.
Absa Group Limited Share Ownership Administrative Trust (AGLSOT)
AGLSOT enabled all Absa employees to participate in a one-off offer to purchase 200 redeemable cumulative option-holding preference shares. Each
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
of issue. Exercise may occur in lots of 100 only and within a price range varying from R48 to R69 (£3.81 to £5.48) dependent on the 30-day volume
weighted trading price on the JSE Limited. Options are redeemed by Absa on the final exercise date.
Executive Share Option Scheme (ESOS)
The ESOS is a long-term incentive scheme and was available by invitation to certain senior executives of the Group with grants usually made annually.
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 rules of the scheme, and are normally exercisable between three and ten years from that date. No further awards are made under ESOS.
Barclays Global Investors Equity Ownership Plan (BGI EOP)
The EOP was provided to key employees of BGI and was wound up following the disposal of BGI. The exercise price of the options was determined by the
Remuneration Committee of Barclays PLC based on the fair value of BGI as determined by an independent appraiser. The options were granted over shares
in Barclays Global Investors UK Holdings Limited, a subsidiary of Barclays Bank PLC.
Options were not exercisable until vesting, with a third of the options held generally becoming exercisable at each anniversary of grant. The shareholder
had the right to offer to sell the shares to Barclays Bank PLC 355 days following the exercise of the option. The most recently agreed valuation was £109.45,
at 30th November 2009. No awards were made under the BGI EOP in 2009.
The scheme rules provided that in the event of a sale of the business, outstanding options vest before the disposal. During the year the Group disposed
of Barclays Global Investors. Accordingly, the share-based payment charge has been accelerated in these financial statements.