HSBC 2010 Annual Report Download - page 292

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
9 – Share-based payments / 10 – Tax expense
290
The weighted average share price at the date the share options were exercised was US$10.26 (2009: US$9.14). The
number of options, weighted average exercise price and weighted average remaining contractual life of options
outstanding at the balance sheet date, analysed by exercise price range, were as follows:
2010 2009
Exercise price range (£) ............................................................ 6.00 – 7.00 7.01 – 8.50 6.00 – 7.00 7.01 – 8.50
Number (000s) .......................................................................... 26,927 125,831 28,406 129,313
Weighted average exercise price (£) ........................................ 6.03 7.36 6.03 7.36
Weighted average remaining contractual life (years) .............. 2.33 2.34 3.33 3.34
Of which exercisable:
Number (000s) ...................................................................... 26,927 125,831 28,406 129,313
Weighted average exercise price (£) .................................... 6.03 7.36 6.03 7.36
HSBC Holdings Executive Share Option Scheme
The HSBC Holdings Executive Share Option Scheme was a long-term incentive plan under which certain senior
HSBC employees were awarded share options before the adoption of the HSBC Holdings Group Share Option Plan
in 2000. The aim of the plan was to align the interests of those higher performing senior employees with the creation
of shareholder value. This was achieved by setting certain TSR targets to be attained in order for the awards to vest.
Options were granted at market value and were exercisable between the third and tenth anniversaries of the date of
grant, subject to vesting conditions. No awards have been made under this plan since 2000 and all options have now
expired or been exercised.
Movement on the HSBC Holdings Executive Share Option Scheme awards
2010 2009
Number
Weighted
average
exercise
price
Number
Weighted
average
exercise
price
(000s) £
(000s) £
Outstanding and exercisable at 1 January .................................... 6,707 6.50
13,964 6.92
Adjustment for rights issue ........................................................... – –
2,046 6.04
Exercised in the year ..................................................................... (4,229) 6.50 (920) 6.39
Expired in the year ........................................................................ (2,478) 6.50 (8,383) 5.61
Outstanding and exercisable at 31 December .............................. – – 6,707 6.50
The weighted average share price at the date the share options were exercised was US$10.26 (2009: US$9.14).
At 31 December 2009, the exercise price range for options outstanding was £5.50–£7.00 and the weighted average
remaining contractual life of options outstanding was 0.26 years.
HSBC France and subsidiary company plans
Before its acquisition by HSBC in 2000, HSBC France and certain of its subsidiaries operated employee share option
plans. Options over HSBC France shares granted between 1994 and 1999 vested upon announcement of HSBC’s
agreement to acquire HSBC France and were therefore included in the valuation of HSBC France.
HSBC France granted 909,000 options in 2000 after the public announcement of the acquisition. The options vested
on 1 January 2002. The HSBC France shares obtained on exercise of the options were exchangeable for HSBC
Holdings ordinary shares of US$0.50. Options were granted at market value and are exercisable within ten years of
the date of grant. Movements in options granted after the public announcement are shown below.
Movement on HSBC France share options
2010 2009
Number
Exercise
price Number
Exercise
price
(000s) € (000s) €
Outstanding and exercisable at 1 January .................................... 604 142.5 604 142.5
Forfeited in the year ...................................................................... (604) 142.5 – –
Outstanding and exercisable at 31 December .............................. – –
604 142.5