HSBC 2002 Annual Report Download - page 157

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Authority to allot shares
13.At the Annual General Meeting in 2002
shareholders gave authority for the Directors to
allot up to 1,871,120,000 ordinary shares of
US$0.50 each. Within this amount the Directors
were granted authority to allot up to 467,780,000
ordinary shares of US$0.50 each wholly for cash
to persons other than existing shareholders.
Employee share option plans
In order to align the interests of staff with those of
shareholders, share options are awarded to
employees under all-employee share plans and
discretionary share incentive plans. The following
are particulars of outstanding employee share
options, including those held by employees working
under employment contracts that are regarded as
"continuous contracts" for the purposes of the Hong
Kong Employment Ordinance. The options are
granted at nil consideration unless otherwise
indicated. No options have been granted to
substantial shareholders, suppliers of goods or
services, or in excess of the individual limit for each
share plan. No options were cancelled during the
year. The total number of new HSBC Holdings
shares that may be issued or become issuable under
all the share option plans in any ten year period is
848,847,000 ordinary shares of US$0.50 each
(approximately 9 per cent of HSBC Holdings' issued
ordinary share capital on 3 March 2003). Within this
limit not more than 5 per cent of the issued ordinary
share capital of HSBC Holdings from time to time
may be put under option under the HSBC Holdings
Group Share Option Plan and the HSBC Holdings
Restricted Share Plan 2000 in any ten year period
(approximately 474,072,000 ordinary shares of
US$0.50 each on 3 March 2003). Particulars of
options held by Directors of HSBC Holdings are set
out on pages 182 to 185 of the Directors’
Remuneration Report.
All-Employee share plans
The HSBC Holdings Savings-Related Share Option
Plan, HSBC Holdings Savings-Related Share Option
Plan: Overseas Section, and previously the HSBC
Holdings Savings-Related Share Option Scheme:
USA Section, are all-employee share plans under
which eligible HSBC employees (those with six
months continuous service from July to December of
the year preceding the date of grant) are granted
options to acquire HSBC Holdings ordinary shares of
US$0.50 each. Employees may make monthly
contributions up to £250 (or equivalent) over a
period of three or five years which may be used, on
the third or fifth anniversary of the commencement
of the relevant savings contract, to exercise the
options; alternatively the employee may elect to have
the savings (plus interest) repaid in cash. The options
are 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 age 50 or over, the transfer of
employing business to another party, or a change of
control of 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: Overseas Section 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 up to 20
per cent. The Plans will terminate on 26 May 2010
unless the Directors resolve to terminate the Plans at
an earlier date.