HSBC 2006 Annual Report Download - page 270

HSBC HOLDINGS PLC
Report of the Directors: Governance (continued)
Employees > Share plans
268
acquire HSBC Holdings ordinary shares. Employees
may make contributions of up to £250 (or
equivalent) each month over a period of one, three or
five years which may be used on the first, third or
fifth anniversary of the commencement of the
relevant savings contract, at the employee’s election,
to exercise the options. Alternatively, the employee
may elect to have the savings, plus (where
applicable) any interest or bonus, repaid in cash.
Options granted over a one-year period will be
exercisable within three months following the first
anniversary of the commencement of the savings
contract. Options granted over three or five-year
periods will be exercisable within six months
following the third or fifth anniversary of the
commencement of the relevant savings contract. In
the case of redundancy, retirement on grounds of
injury or ill health, retirement at or after normal
retirement age, the transfer of the employing
business to another party, or a change of control of
the employing company, options may be exercised
before completion of the relevant savings contract.
Under the HSBC Holdings Savings-Related
Share Option Plan and the HSBC Holdings Savings-
Related Share Option Plan: International the option
exercise price is determined by reference to the
average market value of the ordinary shares on the
five business days immediately preceding the
invitation date, then applying a discount of
20 per cent (except for the options awarded before
2001 and the one-year options awarded under the US
sub-plan where a 15 per cent discount is applied).
The exercise period of the options awarded under
all-employee share plans may be advanced to an
earlier date in certain circumstances, for example on
retirement, and may be extended in certain
circumstances, for example on the death of a
participant, the executors may exercise the option up
to six months beyond the normal exercise period.
The closing price per HSBC Holdings ordinary share
on 25 April 2006, the day before options were
awarded in 2006 under the HSBC Holdings
Savings-Related Share Option Plan and the HSBC
Holdings Savings-Related Share Option Plan:
International, was £9.51. The all-employee share
option plans will terminate on 27 May 2015 unless
the Directors resolve to terminate the plans at an
earlier date.
HSBC Holdings Savings-Related Share Option Plan
HSBC Holdings ordinary shares of US$0.50
Date of
award
Exercise
price (£)
Exercisable
from
Exercisable
until
Options at
1 January
2006
Options
awarded
during year
Options
exercised
during year1
Options
lapsed
during year
Options at
31 December
2006
10 Apr 2000 6.0299 1 Aug 2005 31 Jan 2006 158,530 – 122,451 36,079 –
11 Apr 2001 6.7536 1 Aug 2006 31 Jan 2007 3,328,356 – 3,218,343 50,592 59,421
2 May 2002 6.3224 1 Aug 2005 31 Jan 2006 31,777 – 21,408 10,369 –
2 May 2002 6.3224 1 Aug 2007 31 Jan 2008 3,806,022 – 89,337 164,249 3,552,436
23 Apr 2003 5.3496 1 Aug 2006 31 Jan 2007 6,880,460 – 6,507,643 194,905 177,912
23 Apr 2003 5.3496 1 Aug 2008 31 Jan 2009 11,791,276 – 189,669 600,452 11,001,155
21 Apr 2004 6.4720 1 Aug 2007 31 Jan 2008 3,550,033 – 88,312 351,525 3,110,196
21 Apr 2004 6.4720 1 Aug 2009 31 Jan 2010 5,728,480 – 57,961 374,733 5,295,786
24 May 2005 6.6792 1 Aug 2008 31 Jan 2009 4,582,892 – 48,556 574,736 3,959,600
24 May 2005 6.6792 1 Aug 2010 31 Jan 2011 5,753,115 – 22,598 400,587 5,329,930
26 April 2006
7.6736 1 Aug 2009 31 Jan 2010 – 4,921,297 2,866 265,285 4,653,146
26 April 2006
7.6736 1 Aug 2011 31 Jan 2012 – 3,657,158 495 105,978 3,550,685
1 The weighted average closing price of the shares immediately before the dates on which options were exercised was £9.68.
HSBC Holdings Savings-Related Share Option
Plan: International
To encourage greater participation in the HSBC
Holdings Savings-Related Share Option Plan:
International, two amendments were approved at the
2005 Annual General Meeting. The first was the
introduction of the facility to save and have option
prices expressed in US dollars, Hong Kong dollars
and euros as well as in pounds sterling. Where
applicable in the tables below, the US dollars, Hong
Kong dollars and euro exercise prices were
converted from the sterling exercise price at the
prevailing exchange rates. The second amendment
gives individuals the choice of options over one year
in addition to three and five year terms. The
weighted average closing price of the shares
immediately before the dates on which options were
exercised was £9.70.