Barclays 2008 Annual Report Download - page 261

3
Financial statements
45 Share-based payments (continued)
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 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 (£3.16–£4.55) 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)
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 the Group 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.
In addition, options remain outstanding under the following closed schemes:
Barclays Global Investors Equity Ownership Plan (BGI EOP)
The Equity Ownership Plan was extended to key employees 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 are not exercisable until vesting, with a third of the options held generally becoming exercisable at each anniversary of grant. The shareholder has
the right to offer to sell the shares to Barclays Bank PLC 355 days following the exercise of the option. Barclays Bank PLC may accept the offer and
purchase the shares at the most recently agreed valuation but is under no obligation to do so. Options lapse ten years after grant. The most recently
agreed valuation was £87.22, at 31st March 2008. No awards were made under the BGI EOP in 2008.
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 2008.
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 the following cash-settled schemes operated within the Group:
Absa Group Limited Phantom Performance Share Plan (Phantom PSP)
The Phantom PSP is a cash-settled plan and payments made to participants in respect of their awards are in the form of cash. The Phantom PSP shares
(and any associated notional dividend shares) are awarded at no cost to the participants. The amount that is ultimately paid to the participants is equal to
the market value of a number of ordinary shares as determined after a three-year vesting period. The vesting of the Phantom PSP awards will be subject to
two non-market performance conditions which will be measured over a three-year period, starting on the first day of the financial year in which the award
is made. The award will vest after three years to the extent that the performance conditions are satisfied. These awards are forfeited in total if Absa
performance fails to meet the minimum criteria
Absa Group Limited Phantom Executive Share Award Scheme (Phantom ESAS)
The Phantom ESAS is a cash-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. If the participant is in the employ of the Group after the three-year vesting period, the participant
will receive 20% bonus phantom shares. If the bonus award remains in the Phantom ESAS for another two years, the participant receives an additional
10% bonus phantom shares. Dividend phantom shares are paid to participants on the ordinary phantom shares as if the shares were held from inception.
The number of dividend phantom shares awarded is therefore calculated on the initial allocation and on the 20% and 10% bonus phantom shares, over
the five-year period. Employees that receive performance bonuses in excess of a predetermined amount are compelled to place a set percentage of the
bonus award in the Phantom ESAS. Employees also have the option of utilising more of their bonus award for voluntary ESAS phantom shares.
Barclays PLC Annual Report 2008 259