HSBC 2005 Annual Report Download - page 195

193
HSBC Holdings Savings-Related Share Option Plan: International
HSBC Holdings ordinary shares of US$0.50
Date of
award
Exercise
price (£)
Exercisable
from1
Exercisable
until2
Options at
1 January
2005
Options
awarded
during year3
Options
exercised
during year4
Options
lapsed
during year
Options at
31 December
2005
1 Apr 1999 5.3980 1 Aug 2004 31 Jan 2005 170,388 – 103,666 66,722 –
10 Apr 2000 6.0299 1 Aug 2005 31 Jan 2006 15,687,141 – 14,377,189 849,721 460,231
11 Apr 2001 6.7536 1 Aug 2004 31 Jan 2005 374,043 – 85,864 288,179 –
11 Apr 2001 6.7536 1 Aug 2006 31 Jan 2007 1,341,245 – 12,748 53,127 1,275,370
2 May 2002 6.3224 1 Aug 2005 31 Jan 2006 3,063,749 – 2,691,243 250,711 121,795
2 May 2002 6.3224 1 Aug 2007 31 Jan 2008 1,151,329 – 4,457 47,291 1,099,581
23 Apr 2003 5.3496 1 Aug 2006 31 Jan 2007 10,459–––10,459
23 Apr 2003 5.3496 1 Aug 2008 31 Jan 2009 10,488–––10,488
8 May 2003 5.3496 1 Aug 2006 31 Jan 2007 16,384,589 – 76,043 820,236 15,488,310
8 May 2003 5.3496 1 Aug 2008 31 Jan 2009 6,265,693 – 15,748 240,748 6,009,197
21 Apr 2004 6.4720 1 Aug 2007 31 Jan 2008 49,524–––49,524
21 Apr 2004 6.4720 1 Aug 2009 31 Jan 2010 14,488 – 357 1,766 12,365
10 May 2004 6.4720 1 Aug 2007 31 Jan 2008 10,118,832 – 23,169 860,067 9,235,596
10 May 2004 6.4720 1 Aug 2009 31 Jan 2010 3,272,604 – 6,479 169,196 3,096,929
24 May 2005 6.6792 1 Aug 2008 31 Jan 2009 – 12,304,413 2,202 316,101 11,986,110
24 May 2005 6.6792 1 Aug 2010 31 Jan 2011 – 4,019,911 191 70,113 3,949,607
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 23 May 2005, the day before the options were awarded, was £8.68.
4The weighted average closing price of the shares immediately before the dates on which options were exercised was £9.22.
Discretionary share option plans
The HSBC Share Plan and previously the HSBC
Holdings Group Share Option Plan and the HSBC
Holdings Executive Share Option Scheme, are
discretionary share option plans under which HSBC
employees, based on performance criteria and
potential, have been granted options to acquire
HSBC Holdings ordinary shares. Since 1996 the
vesting of these options has been subject to the
attainment of pre-determined performance criteria,
except within HSBC France (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 under The
HSBC Share Plan (when taken together with any
Performance Share awards made under The HSBC
Share Plan) is 700 per cent of the employee’s annual
salary at the date of grant. Whilst having flexibility
to make total awards of options and Performance
Shares at this level in certain exceptional
circumstances, the Remuneration Committee does
not intend seven times salary to be the normal level
of award. Under the HSBC Holdings Group Share
Option Plan the maximum value of options which
could have been granted to an employee in any one
year (together with any Performance Share awards
under the HSBC Holdings Restricted Share Plan
2000) was 150 per cent of the employee’s annual
salary at the date of grant plus any bonus paid for the
previous year (or in exceptional circumstances 225
per cent). Subject to achievement of the performance
condition where applicable, 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 of the sale or
transfer regardless of whether the performance
condition is met.
The Remuneration Committee favours the use
of Performance Shares and Restricted Shares and,
following the introduction of The HSBC Share Plan
in 2005, does not intend to continue granting
discretionary options on any widespread basis.
There are locations, and there may be particular
circumstances in the future, however, where option
grants may be appropriate.
The exercise price of options granted under The
HSBC Share Plan, and previously under the HSBC
Holdings Group Share Option Plan, is 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 exercise price of options
granted under the HSBC Holdings Executive Share
Option Scheme was the market value of the ordinary
shares on the business day prior to the grant of the
option. The HSBC Share Plan will terminate on
27 May 2015 unless the Directors resolve to
terminate the Plan at an earlier date.