Subsidiaries’ long-term plans

Certain subsidiaries in the group operate profit-sharing, deferred bonus, various share plans or earn-out arrangements which have generally evolved from acquisition negotiations. The most significant plans are those operated by TIBCO Finance Technology Inc. (TIBCO) and Instinet.

As part of the agreement to acquire TIBCO in 1994, stock appreciation rights plans for employees/former shareholders were negotiated to be paid on the basis of superior performance. In 1998, 78 TIBCO employees were paid £3.6 million under these plans.

Following the creation, in late 1996, of a new subsidiary, TIBCO Software Inc., to market middleware products outside the finance industry, option plans have been established over TIBCO Software shares for both TIBCO and TIBCO Software employees. These options will be satisfied in part by issuing new TIBCO Software shares and in part through existing TIBCO Software shares owned by Reuters. As at 31 December 1998 options had been granted equivalent to approximately 30% of TIBCO Software on a fully diluted basis.

The Instinet plan began in 1993 and is a rolling four-year profit sharing plan now covering approximately 700 employees. During 1998, £6.2 million was paid to 150 employees and a further £14.6 million had been reserved as at 31 December 1998. Of the total sum reserved £7.2 million relates to the 1995 plan and will be payable in early 1999.