HSBC 2004 Annual Report Download - page 195

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granted at nil consideration. No options have been
granted to substantial shareholders, suppliers of
goods or services, or in excess of the individual limit
for each share plan. No options were cancelled
during the year. Under the authority granted by
shareholders at the Annual General Meeting in 2000,
the maximum number of new HSBC Holdings
ordinary shares that may be issued or become
issuable under all the share option plans in any ten
year period is 848,847,000 HSBC Holdings ordinary
shares (approximately 7.6 per cent of HSBC
Holdings’ issued ordinary share capital on
28 February 2005). Within this limit not more than
5 per cent of the issued ordinary share capital of
HSBC Holdings from time to time may be put under
option under the HSBC Holdings Group Share
Option Plan and the HSBC Holdings Restricted
Share Plan 2000 (approximately 560,000,000 HSBC
Holdings ordinary shares on 28 February 2005).
Under the HSBC Holdings savings-related share
option plans, HSBC Holdings Group Share Option
Plan, HSBC Holdings Executive Share Option
Scheme and the HSBC Holdings Restricted Share
Plan 2000 there were options outstanding over
374,369,127 HSBC Holdings ordinary shares at
31 December 2004. Particulars of options over
HSBC Holdings shares held by Directors of HSBC
Holdings are set out on pages 229 to 233 of the
Directors’ Remuneration Report. Following a
comprehensive review of share-based remuneration
arrangements in 2004, resolutions relating to
employee share plans will be submitted to the
forthcoming Annual General Meeting.
All-Employee share plans
The HSBC Holdings Savings-Related Share Option
Plan, HSBC Holdings Savings-Related Share Option
Plan: Overseas Section, and previously the HSBC
Holdings Savings-Related Share Option Scheme:
USA Section, are all-employee share plans under
which eligible HSBC employees (those with six
months continuous service from July to December of
the year preceding the date of grant) are granted
options to acquire HSBC Holdings ordinary shares.
Employees may make overall contributions of up to
£250 (or equivalent) each month over a period of
three or five years which may be used on the third or
fifth anniversary of the commencement of the
relevant savings contract, at their election, to
exercise the options; alternatively the employee may
elect to have the savings (plus interest) repaid in
cash. The options are exercisable within six months
following the third or fifth anniversary of the
commencement of the relevant savings contract. In
the case of redundancy, retirement on grounds of
injury or ill health, retirement at or after normal
retirement age, the transfer of the employing
business to another party, or a change of control of
the employing company, options may be exercised
before completion of the relevant savings contract.
Under the HSBC Holdings Savings-Related Share
Option Plan and the HSBC Holdings Savings-
Related Share Option Plan: Overseas Section the
option exercise price is determined by reference to
the average market value of the ordinary shares on
the five business days immediately preceding the
invitation date, then applying a discount of 20
per cent. The all-employee share plans will terminate
on 26 May 2010 unless the Directors resolve to
terminate the plans at an earlier date.
HSBC Holdings Savings-Related Share Option Plan
HSBC Holdings ordinary shares of US$0.50
Date of
award
Exercise
price (£)
Exercisable
from1
Exercisable
until2
Options at
1 January
2004
Options
awarded
during year3
Options
exercised
during year4
Options
lapsed
during year
Options at
31 December
2004
6 Apr 1998 5.2212 1 Aug 2003 31 Jan 2004 186,165 – 139,268 46,897 –
1 Apr 1999 5.3980 1 Aug 2004 31 Jan 2005 10,598,682 – 10,251,424 147,716 199,542
10 Apr 2000 6.0299 1 Aug 2005 31 Jan 2006 11,163,824 – 448,670 629,718 10,085,436
11 Apr 2001 6.7536 1 Aug 2004 31 Jan 2005 1,870,853 – 1,724,173 78,155 68,525
11 Apr 2001 6.7536 1 Aug 2006 31 Jan 2007 4,171,431 – 103,513 339,842 3,728,076
2 May 2002 6.3224 1 Aug 2005 31 Jan 2006 1,741,719 – 50,624 216,124 1,474,971
2 May 2002 6.3224 1 Aug 2007 31 Jan 2008 4,636,144 – 48,693 374,479 4,212,972
23 Apr 2003 5.3496 1 Aug 2006 31 Jan 2007 9,056,673 – 101,884 1,076,787 7,878,002
23 Apr 2003 5.3496 1 Aug 2008 31 Jan 2009 14,074,491 – 56,157 968,910 13,049,424
21 Apr 2004 6.4720 1 Aug 2007 31 Jan 2008 – 4,556,417 2,162 299,055 4,255,200
21 Apr 2004 6.4720 1 Aug 2009 31 Jan 2010 – 6,534,250 411 206,641 6,327,198
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 closing price per share on 20 April 2004, the day before the options were awarded, was £8.29.
4The weighted average closing price of the shares immediately before the dates on which options were exercised was £8.37.