Barclays 2006 Annual Report Download - page 230

Notes to the accounts
For the year ended 31st December 2006
Barclays PLC
Annual Report 2006
226
51 Share-based payments (continued)
Absa Group Limited Black Economic Empowerment (BEE) Transaction
On 25th June 2004, Absa shareholders approved the allocation of 73,152,300, redeemable cumulative option-holding Absa preference shares to
Batho Bonke Capital Limited. Each redeemable preference share carries the option to acquire one Absa ordinary share. The shares carry the same
rights as ordinary shares including voting rights, and receive dividends which are payable semi-annually. 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 ZAR48 to ZAR69 (£3.50-£5.03)
dependent on the 30-day volume weighted trading price on the JSE Limited. Options are redeemed by Absa on the final exercise date.
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.
Options are allocated to Absa employees according to the normal Human Resources talent management process. 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 period. The options expire after a period of ten years from the issuing date. Options issued since August 2005 have vesting
performance criteria associated with them, which require headline earnings per share to exceed an agreed benchmark over a three-year period from
July 2005 for the options to vest.
Absa Group Limited Share Ownership Trust (AGLSOT)
The Absa Group Limited Share Ownership Trust (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
ZAR48 to ZAR69 (£3.50-£5.03) dependent on the 30-day volume weighted trading price on the JSE Limited. Options are redeemed by Absa on the
final exercise date.
Absa Group Limited Executive Share Award Scheme (AGLESAS)
For certain employees of Absa an element of their annual bonus is in the form of a deferred award of a provisional allocation of Absa Group Limited
shares under Absa ESAS. The total value of the bonus made to the employee of which ESAS is an element is dependent upon the business unit and
individual employee performance. The ESAS element of the annual bonus must be held for at least three years. Additional bonus shares are
subsequently awarded to recipients of the provisional allocation and vest upon achieving continued service for three and five years from the date
of award. All awards are subject to potential forfeit if the individual resigns.
In addition, 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 2006.
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.
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.
At the balance sheet date, nil options remained outstanding or exercisable in respect of the following closed scheme:
Woolwich Save as You Earn (Woolwich SAYE)
Under this scheme, employees entered 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 the shares in the Company at a discount calculated in accordance with the rules of the scheme.
The discount was 20% of the market price at the date the options were granted.
Several cash-settled schemes also operate within the Group.
Barclays Africa Share Plan
The Barclays Africa Share Plan grants a number of notional shares and settles in a cash award linked to the Barclays PLC share price. The exercise
price of options is equal to the increment of the market price of Barclays shares over the original price on the date of grant. The final number of
notional shares over which the option may by exercised is determined by reference to set performance criteria. Awards will vest three years from
grant and expire four years from that date.