RBS 2004 Annual Report Download - page 197

section
03
195
Annual Report and Accounts 2004
Notes on the accounts
Financial
statements
The following is a summary of outstanding options under the various schemes:
Savings scheme Executive scheme Option 2000 scheme Total
Number Weighted Number Weighted Number Weighted Number Weighted
of average of average of average of average
options exercise price options exercise price options exercise price options exercise price
000’s pence 000’s pence 000’s pence 000’s pence
At 1 January 2002 51,604 829 12,033 996 26,584 1399 90,221 1019
Granted 12,419 1235 2,096 1810 620 1841 15,135 1339
Exercised (12,112) 493 (3,160) 729 (5) 1380 (15,277) 542
Forfeited (2,271) 1025 (145) 940 (1,313) 1419 (3,729) 1160
At 31 December 2002 49,640 1003 10,824 1232 25,886 1409 86,350 1153
Granted 9,100 1307 4,073 1347 1,363 1590 14,536 1345
Exercised (11,902) 747 (1,299) 798 (6,380) 1240 (19,581) 911
Forfeited (2,715) 1117 (76) 1251 (1,603) 1459 (4,394) 1244
At 31 December 2003 44,123 1128 13,522 1308 19,266 1474 76,911 1246
Granted 11,216 1205 4,341 1723 1,269 1553 16,826 1365
Exercised (10,675) 883 (1,079) 994 (6,715) 1439 (18,469) 1092
Forfeited (2,339) 1214 (171) 1298 (948) 1428 (3,458) 1277
At 31 December 2004 42,325 1205 16,613 1437 12,872 1503 71,810 1312
In 2004, awards totalling 373,140 options (2003 – 341,269; 2002 – 59,869) with negligible exercise prices and 93,367 shares
(2003 – 59,525; 2002 – nil) were made under the Group’s medium-term performance plan. Under the plan, the amount of
shares or options that vest ranges from nil to 200% of the award depending on the annual growth in the Group’s earnings per
share and its performance relative to that of a comparator group of companies principally from the UK financial services sector.
Savings scheme
Under the Inland Revenue rules, a participant in a savings
scheme is permitted to make a maximum monthly saving of
£250 under approved savings schemes. Employees of Group
companies in the UK and Ireland and certain offshore
jurisdictions are offered participation in the savings scheme.
Participants can make monthly savings for a period of three,
five or seven years. Options may be granted at not less than
80% of the average market value of ordinary shares of the
company by reference to dealings in the ordinary shares over
the last three trading days of the week immediately preceding
the date of an invitation to participate, or, if higher, at par.
Options comprise, as nearly as possible, such number of
ordinary shares as may be purchased at the option price with
the proceeds on maturity after either three, five or seven years
of the savings contract, and options may normally be
exercised only within six months after the third, fifth or seventh
anniversary of the savings contract. Options may not be
transferred or assigned.
Option 2000 scheme
On 9 August 2000 and again on 4 April 2001, every qualifying
permanent member of staff in the Group received an option
over 150 shares in the company. The executive directors of the
company waived their entitlement to the option granted on 4
April 2001. Further grants over 150 shares have been made on
three separate occasions to employees joining the Group by
way of acquisition, including a grant on 1 September 2004 to
all employees of Charter One.
Under the scheme, options are granted at the market value of
ordinary shares at the date of grant and may normally be
exercised only between the third and sixth anniversary of the
date of grant.
Limitations of the option schemes:
(i) During a ten year period, no more than 10% in aggregate
of the issued ordinary share capital of the company from
time to time may be issued pursuant to all of the employee
share schemes operated by the company.
(ii) During a five year period, no more than 5% in aggregate of
the issued ordinary share capital of the company from time
to time may be issued pursuant to all of the employee
share schemes operated by the company.
(iii) During a ten year period, no more than 5% in aggregate of
the issued ordinary share capital of the company from time
to time may be issued pursuant to the executive scheme.
(iv) During a four year period, no more than 21⁄2% in aggregate
of the issued ordinary share capital of the company from
time to time may be issued pursuant to the executive scheme.
(v) During a three year period, no more than 3% in aggregate
of the issued ordinary share capital of the company from
time to time may be issued pursuant to the executive scheme.