HSBC 2008 Annual Report Download - page 380

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Note 10
378
2008 2007
Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price
(000s) £ (000s) £
Outstanding at 1 January .............................................. 524 8.85 628 8.84
Forfeited and expired in the year .................................. (224) 8.79 (104) 8.79
Outstanding at 31 December ........................................ 300 8.89 524 8.85
No options were granted in 2008 (2007: nil). The weighted average remaining contractual life of options outstanding
at the balance sheet date was 2.1 years (2007: 2.4 years). The exercise price range of options outstanding at the
balance sheet date was £8.79-£9.17. All of the options were exercisable. The options exercisable at the balance sheet
date were 300 (2007: nil).
Savings-related share option plans
Savings-related share option plans invite eligible employees to enter into savings contracts to save up to £250 per
month (or its equivalent in US dollars, Hong Kong dollars or euros), with the option to use the savings to acquire
shares. The aim of the plans is to align the interests of all employees with the creation of shareholder value. The
options are exercisable within three months following the first anniversary of the commencement of a one-year
savings contract or within six months following either the third or the fifth anniversaries of the commencement of
three-year or five-year savings contracts, respectively. The exercise price is set at a 20 per cent (2007: 20 per cent)
discount to the market value immediately preceding the date of invitation (except for the one-year options granted
under the US sub-plan where a 15 per cent discount is applied).
2008 2007
Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price
(000s) £ (000s) £
Outstanding at 1 January .............................................. 89,739 6.83 87,837 6.58
Granted in the year ....................................................... 32,951 6.82 30,105 7.43
Exercised in the year...................................................... (30,126) 6.10 (17,951) 6.58
Forfeited and expired in the year .................................. (18,163) 7.04 (10,252) 6.58
Outstanding at 31 December ........................................ 74,401 6.97 89,739 6.83
The weighted average fair value of options granted during the year was US$3.89 (2007: US$4.24). The weighted
average share price at the date the share options were exercised was US$15.48 (2007: US$17.93). The exercise price
range and weighted average remaining contractual life for options outstanding at the balance sheet date were as follows:
2008 2007
Exercise price range (£) ..................................................................................................................... 5.35-7.67 5.35-7.93
Weighted average remaining contractual life (years) ....................................................................... 1.87 1.67
Of which exercisable:
Number (000s) ............................................................................................................................... 1,751 541
Weighted average exercise price (£) ............................................................................................. 6.03 6.44
HSBC Holdings Restricted Share Plan 2000
Performance share awards made under the HSBC Holdings Restricted Share Plan 2000 (the ‘Restricted Share
Plan’)
Performance share awards under the Restricted Share Plan were granted to senior executives from 2000 to 2004. The
aim of the plan was to align the interests of executives with the creation of shareholder value. This was achieved by
setting certain TSR targets against a peer group of major banks which would normally have to be attained in order for
the awards to vest. In addition to these performance conditions, none of the outstanding awards will vest unless the
Remuneration Committee is satisfied that, during the performance period, HSBC has achieved sustained growth.
Following adoption of the HSBC Share Plan in 2005, no further awards will be made under this Plan other than from
reinvested scrip dividends.