HSBC 2005 Annual Report Download - page 273

271
Restricted Share awards
Restricted Share awards are made to eligible employees for recruitment and retention purposes or as part of deferral
of annual bonus. The awards vest between one and three years from date of award.
2005
Number
(000’s)
Additions during the year1................................................................................................................................................ 5,285
Released in the year ......................................................................................................................................................... (179)
Forfeited in the year ......................................................................................................................................................... –
Outstanding at 31 December ........................................................................................................................................... 5,106
1Additions during the year include 823 shares awarded to employees of HSBC Holdings.
The weighted average fair value of shares awarded by HSBC for Restricted Share Awards in 2005 was US$16.66.
Share options
Share options were granted under the Rules of The HSBC Share Plan to employees in France based on their
performance in the previous year. The share options are subject to the corporate performance condition, which
consists of an absolute Earnings Per Share measure and a Total Shareholder Return measure, based on HSBC’s
ranking against a comparator group of 28 major banks. The options vest after three years and are exercisable up to
the fourth anniversary of the date of grant, after which they will lapse.
2005
Number
Weighted
average
exercise
price
(000’s) £
Granted in the year ........................................................................................................................ 628 8.84
Forfeited in the year ....................................................................................................................... ––
Outstanding at 31 December ......................................................................................................... 628 8.84
The fair value of options granted in the year as at the date of grant was US$2.29. The remaining contractual life of
options outstanding at the balance sheet date is 4 years. None of these options are exercisable at the balance sheet
date.
Savings-related share option plans
The savings-related share option plans 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 aim of the plan is to align the interests of all
employees to the creation of shareholder value. 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 set at a 20 per cent (2004: 20 per cent) discount to the market value at the date of grant.
2005 2004
Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price
(000’s) £ (000’s) £
Outstanding at 1 January .................................................. 109,722 5.92 123,316 5.75
Granted in the year ........................................................... 26,995 6.68 25,040 6.47
Exercised in the year ......................................................... (29,693) 6.06 (30,068) 5.76
Forfeited in the year .......................................................... (8,608) 6.06 (8,566) 5.67
Outstanding at 31 December1 ........................................... 98,416 6.07 109,722 5.92
1The above includes HSBC Holdings employee options of 599,322 outstanding at 1 January 2005 (2004: 669,647), 136,100 options
granted in the year (2004: 125,442) and 606,205 options outstanding at 31 December 2005 (2004: 599,322).