HSBC 2009 Annual Report Download - page 408

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 10 and 11
406
2009 2008
Number
Weighted
average
exercise
price
Number
Weighted
average
exercise
price
(000s) £ (000s) £
Outstanding at 1 January .......................................................... 13,964 6.92 18,239 6.85
Adjustment for rights issue ....................................................... 2,046 6.04 – –
Exercised in the year ................................................................. (920) 6.39 (4,051) 6.58
Expired in the year .................................................................... (8,383) 5.61 (224) 7.70
Outstanding at 31 December .................................................... 6,707 6.50 13,964 6.92
The weighted average share price at the date the share options were exercised was US$9.14 (2008: US$14.65).
The number of options, weighted average exercise price and weighted average remaining contractual life of options
outstanding at the balance sheet date, analysed by exercise price range, were as follows:
2009 2008
Exercise price range (£) ........................................................................................................................... 5.50 – 7.00 6.01 – 7.87
Number (000s) ......................................................................................................................................... 6,707
13,964
Weighted average exercise price (£) ....................................................................................................... 6.50 6.92
Weighted average remaining contractual life (years) ............................................................................. 0.26 0.75
Of which exercisable:
Number (000s) ..................................................................................................................................... 6,707 13,964
Weighted average exercise price (£) ................................................................................................... 6.50 6.92
HSBC France and subsidiary company plans
Before its acquisition by HSBC in 2000, HSBC France and certain of its subsidiaries operated employee share plans
under which share options were granted over their respective shares.
Options over HSBC France shares granted between 1994 and 1999 vested upon announcement of HSBC’s agreement
to acquire HSBC France and were therefore included in the valuation of HSBC France.
HSBC France 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 HSBC France shares obtained on exercise of the options are exchangeable for HSBC Holdings
ordinary shares of US$0.50. As a consequence of the rights issue, the ratio of HSBC Holdings ordinary shares
exchangeable for each HSBC France share was adjusted from 13 to 14.92. Options were granted at market value and
are exercisable within 10 years of the date of grant.
2009 2008
Number
Exercise
price Number
Exercise
price
(000s) € (000s) €
Outstanding and exercisable at 1 January and 31 December ... 604 142.5 604 142.5
No share options were exercised in 2009 and 2008. The remaining contractual life for options outstanding at the
balance sheet date was 0.3 years (2008: 1.3 years).
At the date of its acquisition in 2000, certain of HSBC France’s subsidiary companies also operated employee share
option plans under which options could be granted over their respective shares. On exercise of certain of these
options, the subsidiary shares are exchanged for HSBC ordinary shares. The total number of HSBC ordinary shares
exchanged under such arrangements in 2009 was 70,257 (2008: 12,810).
HSBC Finance
Upon acquisition, HSBC Finance share options previously granted were converted to share options over HSBC
ordinary shares of US$0.50 each at a rate of 2.675 HSBC share options (the same ratio as the Exchange Offer for
HSBC Finance) for each HSBC Finance share option. Options granted under HSBC Finance’s own share option
schemes prior to the announcement of the acquisition by HSBC in November 2002 vested as options over HSBC
shares upon acquisition by HSBC. Options granted after the announcement of the acquisition but prior to its
completion on 28 March 2003 generally vest equally over four years and expire ten years from the date of grant.