HSBC 2004 Annual Report Download - page 342

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
340
2004 2003 2002
Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price
(000’s) £ (000’ s) £ (000’ s) £
Outstanding at 1 January ............ 123,316 5.75 121,520 5.97 130,450 5.76
Granted in the year ..................... 25,040 6.47 48,313 5.35 19,828 6.32
Exercised in the year .................. (30,068) 5.76 (14,630) 5.13 (16,455) 4.73
Forfeited in the year ................... (8,566) 5.67 (31,887) 6.29 (12,303) 5.90
Outstanding at 31 December ...... 109,722 5.92 123,316 5.75 121,520 5.97
The maximum term of options granted in the year is 51/2 years from the date of grant (2003 and 2002: 51/2 years).
The weighted average fair value of options granted in the year as at the date of grant was US$3.75 (2003:
US$3.09; 2002: US$3.58).
The number of options, weighted average exercise price, and the weighted average remaining contractual life for
options outstanding at the balance sheet date, analysed by exercise price range, are as follows:
2004 2003 2002
Exercise price range (£) ............. 1.81 – 4.00 4.01 – 6.75 1.81 – 4.00 4.01 – 6.75 1.81 – 4.00 4.01 – 6.75
Number (000’ s) .......................... –109,722 891 122,425 2,382 119,138
Weighted average exercise
price (£) ................................. –5.92 3.78 5.76 3.78 6.02
Weighted average remaining
contractual life (years) ........... –1.82 0.16 1.91 0.65 2.02
Of which exercisable:
Number (000’ s) ..................... –1,341 891264 –312
Weighted average exercise
price (£) ............................. –6.20 3.78 5.22 – 4.52
CCF and Subsidiary Company Plans
CCF granted share purchase and subscription offers to certain executives of CCF, directors and officers, as well
as to certain senior executives of subsidiaries.
Options granted between 1994 and 1999 vested upon announcement of HSBC’ s intent to acquire CCF and were
therefore included in the valuation of CCF.
CCF granted 909,000 options in 2000 after the public announcement of the acquisition and these options did not
vest as a result of the change in control. The options were subject to continued employment and vested on
1 January 2002. The CCF shares obtained on exercise of the options are exchangeable for HSBC’ s ordinary
shares of US$0.50 each in the same ratio as the Exchange Offer for Crédit Commercial de France shares (13
ordinary shares of US$0.50 for each CCF share). Options are granted at market value and are exercisable within
10 years of the vesting date.
2004 2003 2002
Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price Number
Weighted
average
exercise
price
(000’s) € (000’ s) € (000’ s) €
Outstanding at 1 January ............ 856 142.50 857 142.50 861 142.50
Exercised in the year .................. (2) 142.50 (1) 142.50 (4) 142.50
Outstanding at 31 December ...... 854 142.50 856 142.50 857 142.50
The weighted average remaining contractual life for options outstanding at the balance sheet date was 7 years.
When it was acquired in 2000, certain of CCF’ s subsidiary companies also operated employee share option plans
under which options could be granted over their respective shares. Following exercise of certain of these options,
the subsidiary shares may be exchanged for HSBC ordinary shares. The total number of HSBC shares