HSBC 2001 Annual Report Download - page 260

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
258
2001 2000
Exercise
p
rice ran
g
e
(
£
)
.................................................................................... £8.00 - £10.00 £8.00 - £10.00
N
umber
(
‘000
)
.................................................................................................. 50
,
825 455
Weighted average exercise price (£) ................................................................ 8.72 9.64
Weighted average remaining
contractual life (years).................................................................................... 9.30 9.76
Savings-Related Share Option Schemes
The Savings-Related Share Option Schemes invite eligible employees to enter into savings contracts to save up
to £250 per month, with the option to use the savings to acquire shares. The options are exercisable within six
months following either the third or the fifth anniversary of the commencement of the savings contract
depending on conditions set at grant. The exercise price is at a 20 per cent (2000 and 1999: 15 per cent) discount
to the market value at the date of grant.
2001 2000 1999
Number
Wei
g
hte
d
average
exercise
price Number
Weighte
d
average
exercise
price Number
Weighte
d
average
exercise
price
(000’s) £ (000’ s) £ (000’ s) £
Outstanding at beginning of year . 121,312 5.25 115,664 3.81 89,754 3.28
Granted in the year....................... 28,832 6.75 48,195 6.03 31,261 5.44
Exercised in the year.................... (12,601) 3.14 (37,595) 1.84 (1,308) 2.23
Less: Forfeited in the year............ (7,093) 5.82 (4,952) 5.08 (4,043) 4.28
Outstanding at end of year ........... 130,450 5.76 121,312 5.25 115,664 3.81
The maximum term of options granted in the year is 51/2 years from the date of grant (2000: 51/2 years; 1999:
51/2 years).
The weighted average fair value of options granted in the year as at the date of grant was £2.57 (2000: £2.72;
1999: £2.75).
The weighted average exercise price of options granted in 1998 was £5.22 (1997: £2.80).
The number of options, weighted average exercise price, and the weighted average remaining contractual life
for options outstanding at the balance sheet date, analysed by exercise price range, are as follows:
2001 2000 1999
Exercise price range (£) ..................... £1.81 - £4.00 £4.01 - £6.52 £1.81 - £4.00 £4.01 - £6.52 £1.81 - £4.00 £4.01 - £6.52
Number (‘000) ................................... 3,411 127,039 15,470 105,842 53,292 62,372
Weighted average exercise price (£) .. 3.62 5.81 3.16 5.56 2.21 5.18
Weighted average remaining
contractual life (years)...................... 1.16 2.47 0.68 3.28 0.68 3.49
Of which exercisable:
Number (‘000) ................................... 999 – 543 – – –
Weighted average exercise price (£) .. 3.23 – 1.81 – – –
Fair values of share options, measured at the date of grant of the option, are calculated at the date of grant using
a binomial model which produces similar results to the Black-Scholes model. The fair values calculated are
inherently subjective and uncertain due to the assumptions made and the limitations of the model used. The