HSBC 2003 Annual Report Download - page 195

193
HSBC Holdings Savings-Related Share Option Scheme: USA Section
HSBC Holdings ordinary shares of US$0.50 each
Date of
award
Exercise
price (£)
Exercisable
from1Exercisable until2
Options at
1 January
2003
Options
exercised
during year3
Options
lapsed
during year
Options at
31 December
2003
24 Aug 1998 3.7768 1 Jul 2003 31 Dec 2003 2,382,468 1,492,006 – 890,462
10 Aug 1999 6.3078 1 Jul 2004 31 Dec 2004 1,493,406 15,764 – 1,477,642
No options were awarded during the period.
1May be advanced to an earlier date in certain circumstances, e.g. retirement.
2May be extended to a later date in certain circumstances, e.g. on the death of a participant, the executors may exercise the option up to
six months beyond the normal exercise period.
3The weighted average closing price of the shares immediately before the dates on which options were exercised was £7.78.
Discretionary share incentive plans
The HSBC Holdings Group Share Option Plan, and
previously the HSBC Holdings Executive Share
Option Scheme, are discretionary share incentive
plans under which HSBC employees, based on
performance criteria and potential, are granted
options to acquire HSBC Holdings ordinary shares.
Since 1996 the vesting of these awards has been
subject to the attainment of pre-determined
performance criteria, except within CCF (which was
acquired in 2000) where performance criteria are
being phased in. The maximum value of options
which may be granted to an employee in any one
year (together with any Performance Share awards
under the HSBC Holdings Restricted Share Plan
2000) is 150 per cent of the employee’ s annual salary
at the date of grant plus any bonus paid for the
previous year. In exceptional circumstances this
could be raised to 225 per cent. Subject to
achievement of the performance condition, options
are generally exercisable between the third and tenth
anniversary of the date of grant. Employees of a
subsidiary that is sold or transferred out of HSBC
may exercise options awarded under the HSBC
Holdings Group Share Option Plan within six
months regardless of whether the performance
condition is met.
The terms of the HSBC Holdings Group Share
Option Plan were amended in 2001 so that the
exercise price of options granted under the Plan in
2002 and beyond would be the higher of the average
market value of the ordinary shares on the five
business days prior to the grant of the option or the
market value of the ordinary shares on the date of
grant of the option. The HSBC Holdings Group
Share Option Plan will terminate on 26 May 2005
unless the Directors resolve to terminate the plan at
an earlier date.