HSBC 2003 Annual Report Download - page 231

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3The shares will vest in three equal instalments on each of the first three anniversaries of 28 March 2003 so long as Mr Aldinger
remains employed on the relevant vesting date, subject to accelerated vesting upon a termination of cause, or by Mr Aldinger for good
reason or due to his death or disability.
4At the date of vesting, 31 March 2003, the market value per share was £6.49. The market value per share (adjusted for the share capital
reorganisation implemented on 2 July 1999) on 2 March 1998, the date of award, was £6.22. The awards were subject to earnings per
share performance conditions, to be achieved in whole or in part, as follows: (1) earnings per share in the year 2001 to be greater than
earnings per share in 1997 by a factor equivalent to the composite rate of inflation (a weighted average of inflation in the UK, USA and
Hong Kong) plus 2 per cent, compounded over each year of the performance period; (2) earnings per share to increase relative to the
previous year in not less than three of the four years of the performance period; and (3) cumulative earnings per share over the four
years of the performance period, 1998 to 2001 inclusive, must exceed an aggregate figure calculated by compounding 1997 earnings
per share by a factor equivalent to the annual composite rate of inflation plus 2 per cent for each year of the performance period. On
meeting all of these three primary tests, 50 per cent of the conditional awards would be released to each eligible participant. A
secondary test would apply such that, if the cumulative earnings per share over the performance period exceeded an aggregate figure
calculated by compounding 1997 earnings per share by a factor equivalent to the same annual composite rate of inflation as described
above, plus 5 per cent or more, or 8 per cent or more, for each year of the performance period, 75 per cent or 100 per cent respectively
of the conditional awards would be released. In accordance with the rules of the plan, these conditions were retested over the years
1999 to 2002. The performance conditions were met in full and the shares were released.
5The market value per share on 5 March 2003 was £6.70. The shares acquired by the Trustee of the Plan were purchased at an average
price of £6.88.
650 per cent of D G Eldon’s discretionary bonus in respect of 1999, 2000, 2001 and 2002 respectively was awarded in Restricted Shares
with a three-year restricted period.
7Retired on 30 May 2003.
8Interest at date of retirement (30 May 2003).
On behalf of the Board 1 March 2004
Sir Mark Moody-Stuart, Chairman of Remuneration Committee