BT 1999 Annual Report Download - page 90

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NOTES TO THE FINANCIAL STATEMENTS
89
31. Employee share schemes (continued)
BT Executive Share Plan, BT Performance Share Plan and BT Deferred Bonus Plan
The BT Executive Share Plan (ESP), formerly the BT Long Term Remuneration Plan, and the BT Performance Share Plan (PSP)
were introduced for employees of the group in 1994 and 1995, respectively. Under the plans, company shares are acquired by an
employee share ownership trust and are conditionally awarded to participants. Participants will only be entitled to these shares
in full at the end of a five-year period under the ESP and the end of a three-year period, which may be extended to four or five
years, under the PSP if, at the end of the applicable period, the company has met the relevant pre-determined corporate
performance measure and, normally, if the participants are still employed by the group. Awards of shares were granted in each of
the years from 1994 to 1998 under the ESP and from 1995 to 1997 under the first performance cycle of the PSP. Further awards
of shares were granted in 1998 under the second three-year performance cycle of the PSP. The corporate performance measure
assesses the company’s overall performance against those top 100 companies listed on the London Stock Exchange, as rated
by the Financial Times (the FT-SE 100 index), at the beginning of the relevant performance period.
The first three-year performance cycle of the PSP ended on 31 July 1998 and on the basis of the corporate measure, the
company’s Total Shareholder Return compared with the FT-SE 100 companies, 90% of the shares vested on 19 August 1998 in
745 participants and 5.0 million shares were transferred to those participants.
The BT Deferred Bonus Plan (DBP) was established in 1998 and the first awards were granted to employees of the group in July
1998. Under this plan, shares in the company are acquired by an employee share ownership trust and transferred to participants
at the end of three years if he or she has continued to be employed by the group throughout that period.
At 31 March 1999, 5.6 million shares in the company (1998 – 4.6 million) were held in trust for the ESP, 0.9 million shares
(1998 – 5.8 million) were held in trust for the PSP and 0.4 million shares (1998 – nil) were held in trust for the DBP. Dividends
earned on the shares during the conditional periods are reinvested in company shares for the potential benefit of the participants.
Additional information relating to the plans is as follows:
ESP PSP DBP Total
))))))%!!!!!!!001!!!001!!!001!!!001
1999 1998 1999 1998 1999 1998 1999 1998
£m £m £m £m £m £m £m £m
))))))%!!!!!!!001!!!001!!!001!!!001
Value of range of possible future transfers: nil to 56.1 29.5 9.2 37.9 3.8 –69.1 67.4
Provision for the costs of the plans charged to the
profit and loss account in year 6.6 2.5 16.0 6.8 5.4 2.2 28.0 11.5
Nominal value of shares held in trust 1.4 1.1 0.2 1.5 0.1 –1.7 2.6
Market value of shares held in trust 56.9 30.0 9.5 38.0 3.8 –70.2 68.0
11115000000!!!001!!!001!!!001!!!001
The values of possible future transfers of shares under the plans were based on the company’s share price at 31 March 1999 of
1,011p (1998 – 650p). The provisions for the costs of the ESP and PSP were based on best estimates of the company’s
performance over the plans’ conditional periods, relating to those portions of the plan conditional periods from commencement
up to the financial year end.