HSBC 2001 Annual Report Download - page 134

HSBC HOLDINGS PLC
Report of the Directors (continued)
132
£6.5187 per share in connection with the
exercise of options under the HSBC Holdings
Savings-Related Share Option Scheme: USA
Section.
5. The HSBC Qualifying Employee Share
Ownership Trust ("the QUEST") was
established in 1999 to satisfy options exercised
by UK participants of the HSBC Holdings
Savings-Related Share Option Plan. At 1
January 2001, the QUEST held 10,337,081
ordinary shares of US$0.50 each. During 2001,
HSBC QUEST Trustee (UK) Limited, the
corporate trustee of the QUEST, subscribed for
3,343,173 ordinary shares of US$0.50 each at
market values ranging from £6.65 to £10.84,
using funds from those employees who
exercised options under the HSBC Holdings
Savings-Related Share Option Plan. In addition,
8,774,315 ordinary shares were transferred from
the QUEST to employees who exercised options
under the HSBC Holdings Savings-Related
Share Option Plan. At 31 December 2001, the
QUEST held 4,905,939 ordinary shares of
US$0.50 each.
6. Under the authority granted by shareholders at
the Annual General Meeting in 2000, 2,947,120
ordinary shares of US$0.50 each were issued at
11.6611 in connection with a Plan dEpargne
Entreprise for the benefit of non-UK resident
employees of CCF and its subsidiaries.
7. Options over 28,831,641 ordinary shares of
US$0.50 each were awarded at nil consideration
on 11 April 2001 to 57,874 HSBC employees
resident in 53 countries and territories under the
HSBC Holdings Savings-Related Share Option
Plan. The options are exercisable within six
months following the third or fifth anniversary
of the commencement of the relevant savings
contracts on 1 August 2001 at a price of £6.7536
per share, a 20 per cent discount to the average
market value over the five business days
immediately preceding the date of the invitation.
Discretionary share incentive plans
8. 3,387,580 ordinary shares of US$0.50 each were
issued at prices ranging from £2.1727 to
£7.7984 per share in connection with the
exercise of options under the HSBC Holdings
Executive Share Option Scheme. Options over
3,599,388 ordinary shares of US$0.50 each
lapsed.
9. Options over 50,973,462 ordinary shares of
US$0.50 each were awarded at nil consideration
on 23 April 2001 under the HSBC Holdings
Group Share Option Plan. The options are
exercisable between the third and 10th
anniversaries of the award at a price of £8.7120
per share, the average market value over the five
business days immediately preceding the date of
the award.
10. Options over 383,505 ordinary shares of
US$0.50 each were awarded at nil consideration
on 30 August 2001 under the HSBC Holdings
Group Share Option Plan. The options are
exercisable between the third and 10th
anniversaries of the award at a price of £8.228
per share, the average market value over the five
business days immediately preceding the date of
the award. Options over 986,972 ordinary shares
of US$0.50 each lapsed.
Authority to repurchase shares
11. At the Annual General Meeting in 2001
shareholders gave authority for the Company to
make market repurchases of up to 926,985,000
ordinary shares of US$0.50 each. Your
Directors have not exercised this authority.
Employee share option plans
In order to align the interests of staff with those of
shareholders, share options are awarded to
employees under all-employee share plans and
discretionary share incentive plans. The following
are particulars of outstanding employee share
options, including those held by employees working
under employment contracts that are regarded as
"continuous contracts" for the purposes of the Hong
Kong Employment Ordinance. No options have been
granted to substantial shareholders, suppliers of
goods or services, or in excess of the individual limit
for each share plan. The total number of new HSBC
Holdings shares that may be issued or become
issuable under all the share option plans in any ten
year period is 848,847,000 ordinary shares of
US$0.50 each (approximately 9 per cent of HSBC
Holdings issued ordinary share capital on 4 March
2002). 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 in any
ten year period (approximately 467,750,000 ordinary