Barclays 2004 Annual Report Download - page 214

212
Notes to the accounts
For the year ended 31st December 2004
52 Differences between UK GAAP and US GAAP accounting principles (continued)
(e) Compensation arrangements (continued)
The range, weighted average exercise price and number of options exercisable at the year end are as follows:
Weighted
average
exercise Number of
price options
Exercise Price Range £exercisable
ESOS(a)
£1.50 – £2.49 1.90 87,024
£2.50 – £3.49 3.47 97,176
£3.50 – £4.49 4.19 4,362,014
SAYE(a)
£2.50 – £3.49 3.17 268,152
£3.50 – £4.49 3.78 1,141,460
ISOP(a)
£4.50 – £5.49 5.31 9,929,900
BGI EOP(b)
£6.00 – £13.99 9.67 3,482,272
ESAS(a)(c) –10,144,101
Woolwich SAYE(a)
£3.50 – £4.49 3.32 164,040
Woolwich ESOP(a)
£2.50 – £3.49 3.29 422,648
£3.50 – £4.49 3.92 1,878,016
Notes
(a) Options granted over Barclays PLC shares.
(b) Options granted over BGI UK Holdings Limited shares.
(c) ESAS is a nil cost award.
The expected dividends for all schemes are assumed to grow in line with the expected increases in share prices for the industry sector until exercise.
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 at 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.
Eligible employees in the UK may participate in the SAYE. Under this Scheme, employees may enter into contracts to save up to £250 per month
and, at the expiry of a fixed term of three, five or seven years, have the option to use these savings to acquire shares in the Company at a discount,
calculated in accordance with the rules of the Scheme. The discount is currently 20% of the market price at the date the options were granted.
The ISOP was introduced to replace the ESOS. It is open by invitation to the employees and Directors of Barclays PLC. Options are 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 will be determined by reference to set performance criteria.
The number of shares under option represents the expected number that will be exercised.
The BGI Equity Ownership Plan is extended to senior employees of BGI. The exercise price of the options is determined by the Remuneration
Committee of Barclays PLC based on the fair value as determined by an independent appraiser. The options are granted over shares in BGI UK
Holdings Limited, a subsidiary of Barclays Bank PLC. Options are normally not exercisable until vesting, with a third of the options generally
becoming exercisable at each anniversary of grant. Options lapse ten years after grant. At 31st December 2004 7.6 million (2003: 13.5 million)
options were outstanding under the terms of the BGI Equity Ownership Plan enabling certain members of staff to subscribe for shares in BGI UK
Holdings Limited between 2005 and 2014 at prices between £6.11 and £20.11.
For certain employees of the Group an element of their annual bonus is in the form of a deferred award of Barclays PLC shares under ESAS.
The total value of the bonus made to the employee of which ESAS is an element is dependent upon the business unit, Group and individual
employee performance. The ESAS element of the annual bonus must be held for at least three years and is subject to potential forfeit if the
individual resigns and commences work with a competitor business.
(f) Shareholders’ interest in the long-term assurance fund
The adjustment to US GAAP net income in 2004 is £(146)m (2003: £(6)m, 2002: £109m). The difference primarily reflects favourable persistency,
mortality and investment experience recognised in UK profits that cannot be recognised in US GAAP net income and the impact of SOP 03-01.