ANNUAL REPORT AND FINANCIAL STATEMENTS 2012 | 93


25. Share-based payments continued Three TRC Investment Teams exercised their put options during the year ended 31 December 2012. These exercises transferred a further entitlement of the management fee profits (typically 10%) to the F&C Group. F&C settled these awards through the issue of FCAM shares.


31 December 31 December 2012 £m


2011 £m


Cumulative TRC Commutation expense, recognised in equity Total intrinsic value of unexercised Commutation options


Potential number of FCAM plc shares which would be settled as at the reporting date (based on Commutation Consideration Share Issue share price at 31 December)


12.1 3.8


No.


10.5 14.9


No. 3,761,922 23,527,481


No Commutation options were exercisable at either 31 December 2012 or 31 December 2011. However, at 31 December 2012, 3.8 million shares relate to the options potentially exercisable by the Group.


The remaining Commutation arrangements are exercisable on 1 September 2013, at the option of the Company. The shares could vest at dates up to 1 September 2016.


(h) Purchased Equity Plan (PEP)


(i) F&C Asset Management plc shares The PEP operated in conjunction with the discretionary bonus scheme and was intended to encourage shareholding by management and employees of the Group by providing for the compulsory purchase of shares using annual bonus above a threshold level.


At the Board’s discretion, eligible employees who were awarded in a financial year an aggregate bonus in excess of a threshold level, typically £100,000, were required to defer one-third of the element exceeding the threshold into shares (comprising either a range of investment products managed by the Group or the Company’s shares) (Compulsory PEP) for three years.


The Compulsory PEP is subject to forfeiture in the event that the employee leaves the Group for any reason (other than as a good leaver) in the three-year retention period.


The number of Compulsory PEP share awards is as follows:


2012 No.


Outstanding at 1 January Exercised during the year Forfeited during the year


Outstanding at 31 December Exercisable at 31 December


The awards exercisable at 31 December 2012 and 31 December 2011 relate to good leavers.


At 31 December 2012 the following awards granted under the PEP to acquire Ordinary Shares were outstanding: No. of awards


Grant date 31 March 2010


outstanding 493,810


Earliest exercise date 31 March 2013 The awards outstanding at 31 December 2012 have a weighted average outstanding term of 0.3 years (31 December 2011: 0.9 years).


(ii) F&C Investment Funds At the discretion of the Board, the cash bonus may be deferred on a mandatory basis into certain F&C Funds (Compulsory Purchased Equity) subject to continued service over either three or four years. This option is available as an alternative to the Compulsory PEP into FCAM plc shares. The main benefit of this arrangement is to incentivise fund managers to invest in the funds they manage, thereby further aligning employee interests with those of clients.


The settlement of awards from the Compulsory Purchased Equity is made by realisation of the holding in the fund at the vesting date and purchase of FCAM plc shares at that date. The value of the investment in F&C Funds, the FCAM plc share price and hence the ultimate number of FCAM plc shares to be settled is only known with certainty at the vesting date. Any dividends paid by F&C Funds during the vesting period are re-invested in F&C Investment Funds.


Exercise price


0.0p


691,198 (197,388) –


493,810 493,810


2011 No.


783,727 (66,716) (25,813)


691,198 2,728


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