HSBC 2009 Annual Report Download - page 406

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Note 10
404
2009 2008
Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price
(000s) £ (000s) £
Outstanding at 1 January .......................................................... 74,401 6.97 89,739 6.83
Granted in the year ................................................................... 152,796 3.32 32,951 6.82
Adjustment for rights issue ....................................................... 7,970 6.08 – –
Exercised in the year.................................................................. (5,011) 5.72 (30,126) 6.10
Forfeited, cancelled and expired in the year ............................ (57,630) 5.96 (18,163) 7.04
Outstanding at 31 December .................................................... 172,526 3.69 74,401 6.97
The weighted average fair value of options granted during the year was US$2.03 (2008: US$3.89). The weighted
average share price at the date the share options were exercised was US$10.23 (2008: US$15.48). The exercise price
range and weighted average remaining contractual life for options outstanding at the balance sheet date were as follows:
2009 2008
Exercise price range (£) ........................................................................................................................... 3.31 – 6.69 5.35 – 7.67
Weighted average remaining contractual life (years) ............................................................................. 3.47 1.87
Of which exercisable:
Number (000s) ..................................................................................................................................... 5,145 1,751
Weighted average exercise price (£) ................................................................................................... 6.26 6.03
HSBC Holdings Restricted Share Plan 2000
Performance Share awards made under the HSBC Holdings Restricted Share Plan 2000 (the ‘Restricted Share
Plan’)
Awards of Performance Shares were made under the Restricted Share Plan 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 have been made under this Plan other than
from reinvested dividend equivalents.
2009 2008
Number Number
(000s) (000s)
Outstanding at 1 January ......................................................................................................................... – 4,811
Additions during the year1 ....................................................................................................................... – 159
Released in the year ................................................................................................................................. – (11)
Forfeited in the year ................................................................................................................................. – (4,959)
Outstanding at 31 December ................................................................................................................... – –
1 Additions during the year comprised reinvested dividend equivalents.
Restricted Share awards made under the Restricted Share Plan
Awards of Restricted Shares were made under the Restricted Share Plan were granted to eligible employees from
2000 to 2005, after taking into account the employees’ performance in the previous year, their potential and retention
requirements. Restricted shares were also awarded as part-deferral of annual bonuses or for recruitment purposes.
Shares were awarded without corporate performance conditions and in most cases fully vest within three years from
the date of award, providing the employees have remained continuously employed by HSBC for the period.