22. Share capital

	Authorised Ordinary Shares of 50p	£m	Issued and fully paid Ordinary Shares of 50p	£m
At 1 January 2003	1,700,000,000	850	1,117,561,520	559
Issue of shares under the Sharesave Scheme	–	–	1,944	–
Issue of shares under Executive Share Option Scheme	–	–	180,853	–
Shares bought back and cancelled	–	–	(10,652,323)	(5)

At 31 December 2003	1,700,000,000	850	1,107,091,994	554

Deferred Shares
The Company has 21 Deferred Shares of 1 pence each in issue. These shares were issued to ensure the demerger was effected as efficiently as possible. The holders of Deferred Shares have no rights to receive dividends or to attend or vote at any general meeting.

Unclassified Share
Further to the redemption of the Special Share in August 2000, the Company’s authorised share capital includes one unclassified share of £1.

Employee Share Plans
a) Share Options Plans
The Company operates the following employee share plans for which shares may be issued by the Company out of authorised but unissued share capital upon exercise of options: the 2002 Performance Share Plan; the UK Approved and Unapproved Executive Share Option Plans; the Global Executive Share Option Plan; the UK Approved Sharesave Plan and the Global Sharesave Plan. The UK Approved Sharesave Plan and the Global Sharesave Plan are savings related and enable employees to invest up to a maximum of £250 per month.

				Number of Ordinary Shares (millions)

Note		Sharesave Schemes	Executive Share Option Schemes	Performance Share Plan	Total
i)	Outstanding at 1 January 2003	3.7	11.2	–	14.9
	Granted	2.2	11.8	3.8	17.8
ii)	Exercised/lapsed	(0.2)	(0.3)	–	(0.5)

	Total options outstanding at 31 December 2003	5.7	22.7	3.8	32.2


				Number of Ordinary Shares

		Option price	Date exercisable	31 December 2003	31 December 2002
i) Options outstanding
Sharesave Schemes		307.51p	2003	–	4,486
		250.00p	2003	775	775
		188.00p	2004	12,159	18,856
		188.00p	2006	8,976	17,952
		200.00p	2004	6,780	6,780
		200.00p	2006	7,592	16,029
		90.00p	2005	1,076,670	1,181,040
		90.00p	2007	2,492,950	2,492,950
		110.00p	2006	291,557	–
		110.00p	2008	216,667	–
		79.00p	2006	875,724	–
		79.00p	2008	748,259	–

Executive Share Option Schemes		297.94p	1996-2003	52,935	54,085
		336.21p	1997-2004	101,858	101,858
		306.14p	1998-2005	290,736	290,736
		323.23p	1999-2006	472,639	472,639
		386.09p	2000-2007	555,541	555,541
		352.61p	2001-2008	761,052	766,660
		331.42p	2002-2007	33,206	33,206
		311.75p	2003-2010	2,689,810	2,704,525
		235.00p	2004-2011	1,935,593	1,949,477
		217.00p	2004-2011	165,778	165,778
		196.00p	2005-2012	4,038,393	4,056,787
		70.00p	2006-2013	11,609,290	–

Performance Share Plan 2002		84.00p	2005-2006	3,807,057	–

Total options outstanding				32,251,997	14,890,160


		Option price	Number of options	Nominal value £	Consideration £
ii) Options exercised
Executive Share Option Schemes		70.00p	180,853	90,426	126,597
Sharesave Schemes		90.00p	1,944	972	1,750

Total options exercised during the year			182,797	91,398	128,347

b) Profit Sharing Share Scheme
In addition to the above, the Company operates an Inland Revenue Approved Profit Sharing Share Scheme. No further appropriations have been made in respect of this scheme. On 26 May 2003, 454,285 shares in International Power plc, representing the balance of the shares held in trust were released to 1,885 present and former employees of the Group. No further appropriations were made in respect of this scheme during the year.

c) Demerger Share Plan
At demerger, the Board of the Company established the Demerger Share Plan to provide an incentive to those employees (other than Executive Directors) who were remaining in continuous full-time employment with the Company. On 3 October 2000, the Board made conditional awards of 288,359 shares to 181 employees of the Company. No specific purchases of shares were made in respect of this Plan as the Company utilised the balance of shares unallocated from two former employee share plans which ceased operation at demerger to meet the vesting of conditional awards under this plan. During the year, a total of 15,241 shares were released to individuals ceasing employment with the Company in accordance with their entitlement under the rules of the Demerger Share Plan. On 3 October 2003, the Demerger Share Plan vested and a total 244,094 shares were released to employees.

d) 2002 Performance Share Plan
At the AGM in May 2003, shareholders approved the establishment of the 2002 Performance Share Plan. The Company granted to the Trustee an option to acquire 3,807,057 Ordinary Shares in the Company at an option price of 84 pence per share. This option can only be exercised to the extent required to satisfy conditional awards made on 10 March 2003 under the 2002 Performance Share Plan. These conditional awards can only vest after the end of the relevant performance period and only to the extent to which the performance conditions have been achieved. The performance period ends on 31 December 2005. No shares were released in respect of this share plan during 2003.

e) Managers’ share bonus arrangements
During 2003 a total of 1,800,000 shares in International Power were acquired in respect of the annual incentive arrangements for Executive Directors and senior managers for a consideration of £1.5 million. These shares have been placed in an Employee Share Ownership Trust.

f) Employee Share Schemes
The Group takes advantage of the exemption granted under UITF 17 (Employee Share Schemes) whereby no compensation expense need be recorded for SAYE employee schemes.