BT 2004 Annual Report Download - page 116

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34. Employee share schemes continued
Options granted, exercised and lapsed under these share option schemes during the years ended 31 March
2002, 2003 and 2004 and options exercisable at 31 March 2002, 2003 and 2004 were as follows:
Savings
a
related
schemes
millions
Savings
b
related
schemes
millions
Executive
option
plans
millions
Total
millions
Exercise
price
range
Weighted
average
exercise
price
Outstanding, 31 March 2002 160 92 24 276 218p–852p 448p
Granted 45 – 65 110 168p–255p 201p
Exercised – (8) – (8) 240p–332p 321p
Lapsed (41) (84) (4) (129) 187p–852p 432p
Outstanding, 31 March 2003 164 – 85 249 163p–727p 231p
Granted 165 – 119 284 154p–199.5p 175p
Lapsed (96) – (10) (106) 154p–716p 220p
Outstanding, 31 March 2004 233 – 194 427 154p–727p 196p
Exercisable, 31 March 2002 – 47 7 54 218p–852p 395p
Exercisable, 31 March 2003 – – 11 11 255p–727p 491p
Exercisable, 31 March 2004 – – 13 13 255p–727p 476p
a
The BT Group Employee Sharesave schemes.
b
The BT Employee Sharesave schemes.
Incentive Share Plan and Retention Share Plan
The BT Incentive Share Plan (ISP) and the BT Retention Share Plan (RSP) were introduced for employees of
the group in 2000. Under the plans, company shares are acquired by an employee share ownership trust and are
conditionally awarded to participants. Under the ISP participants are normally only entitled to these shares in full
at the end of a three-year period if the company has met the relevant pre-determined corporate performance
measure and if the participants are still employed by the group. If the company has exceeded the pre-determined
corporate performance measure the participants may be awarded up to double the shares conditionally awarded.
The corporate performance measure is BT’s total shareholder return (TSR) measure against those top 100
companies listed on the London Stock Exchange, as rated by the Financial Times (the FTSE 100 index), at the
beginning of the relevant performance period. Awards made under the ISP in 2000 and 2001 did not vest as the
company did not meet the corporate performance measure. Under the RSP the length of retention period before
awards vest is flexible. Awards may vest in annual tranches. The shares are transferred at the end of a specified
period, only if the individual is still employed by the group. During the 2004 financial year 720,472 (2003 –
374,039) shares vested in 7 (2003 – 11) participants in the RSP.
Executive Share Plan and Deferred Bonus Plan
The BT Executive Share Plan (ESP) was introduced for employees of the group in 1994. Under the ESP, company
shares are acquired by an employee share ownership trust and are conditionally awarded to participants.
Participants are only entitled to these shares in full at the end of a five-year period under the ESP if, at the end
of the period, the company has met the relevant pre-determined corporate performance measure. Awards of
shares were granted in each of the years from 1994 to 1999 under the ESP.
The corporate performance measure is BT’s total shareholder return (TSR) measure against those top 100
companies listed on the London Stock Exchange, as rated by the FTSE 100 index, at the beginning of the
relevant performance period.
The sixth five-year performance cycle of the ESP ended on 31 March 2004 and on the basis of the corporate
performance measure, the company’s Total Shareholder Return (TSR) target relative to other companies in the
FTSE 100, no shares vested. The fifth five-year performance cycle of the ESP ended on 31 March 2003 and on
the basis of the corporate performance measure, no shares vested. The fourth five-year performance cycle of the
ESP ended on 31 July 2002 and on the basis of the corporate performance measure, 32.5% of the shares vested
on 1 August 2002 in 65 participants and 1.0 million shares were transferred to those participants.
BT Annual Report and Form 20-F 2004115 Notes to the financial statements