Interim Report - 19 of 21

RNS Number : 9225Q

HSBC Holdings PLC

13 August 2010

 



1      Directors' interests

According to the register of Directors' interests maintained by HSBC Holdings pursuant to section 352 of the Securities and Futures Ordinance of Hong Kong, the Directors of HSBC Holdings at 30 June 2010 had the following interests, all beneficial unless otherwise stated, in the shares and loan capital of HSBC and its associated corporations:

HSBC Holdings ordinary shares of US$0.50

			At 30 June 2010
	At 1 January           2010		Beneficial         owner		Child    under 18   or spouse		Jointly            with      another        person		Trustee		Equity derivatives		Total    interests1
V H C Cheng ..........................	466,165		477,327		185,892		-		-		-		663,219
J D Coombe ...........................	19,676		19,999		-		-		-		-		19,999
R A Fairhead ..........................	21,300		-		-		21,300		-		-		21,300
D J Flint .................................	177,101		144,677		-		-		33,1982		-		177,875
A A Flockhart ........................	269,008		269,544		-		-		-		-		269,544
M F Geoghegan ......................	724,757		881,896		44,0003		-		-		-		925,896
S K Green ...............................	1,001,211		837,107		-		64,252		226,2023		-		1,127,561
S T Gulliver ............................	2,731,057		2,553,592		177,475		-		-		-		2,731,067
J W J Hughes-Hallett ..............	67,755		-		-		-		68,2273		-		68,227
W S H Laidlaw .......................	30,948		29,532		-		-		1,4163		-		30,948
G Morgan ...............................	78,515		79,802		-		-		-		-		79,802
Sir Simon Robertson ...............	140,093		8,479		-		-		167,7503		-		176,229
J L Thornton..........................	-		-		-		-		-		10,2504		10,250
Sir Brian Williamson ..............	36,378		36,975		-		-		-		-		36,975

1  Details of executive Directors' other interests in HSBC Holdings ordinary shares of US$0.50 arising from the HSBC Holdings savings-related share option plans and the HSBC Share Plan are set out on the following pages. At 30 June 2010, the aggregate interests under the Securities and Futures Ordinance of Hong Kong in HSBC Holdings ordinary shares of US$0.50, including interests arising through employee share plans, were: V H C Cheng - 1,520,730; D J Flint - 954,134; A A Flockhart - 1,319,794; M F Geoghegan - 2,605,442; S K Green - 2,399,927; and S T Gulliver - 4,321,925. Each Director's total interests represent less than 0.03 per cent of the shares in issue.

2         Includes a non-beneficial interest in 22,132 HSBC Holdings ordinary shares of US$0.50.

3  Non-beneficial.

4  Interest of spouse in listed American Depositary Shares, which are categorised as equity derivatives under the Securities and Futures Ordinance of Hong Kong.

M F Geoghegan has an interest as beneficial owner in 280,000 ordinary shares of HK$5.00 each in Hang Seng Bank Limited (representing less than 0.02 per cent of the shares in issue), which he held throughout the period.

As a director of HSBC France, S T Gulliver has an interest as beneficial owner in one share of €5 in that company (representing less than 0.01 per cent of the shares in issue), which he held throughout the period. S T Gulliver has waived his right to receive dividends on this share and has undertaken to transfer it to HSBC on ceasing to be a director of HSBC France. Following his resignation as a director of HSBC France on 16 February 2010, S K Green ceased to have an interest as beneficial owner in one share of €5 in that company.

V H C Cheng has an interest as beneficial owner in RMB1,960,000 of retail bonds issued by HSBC Bank (China) Company Limited, which he held throughout the period.

Savings-related share option plans and the HSBC Share Plan

HSBC Holdings savings-related share option plans

HSBC Holdings ordinary shares of US$0.50

	Date of             award		Exercise            price               (£)						Held at          1 Jan           2010		Held at        30 Jun           2010
					Exercisable
					from1		until
D J Flint..........................................	25 Apr 2007		6.1760		1 Aug 2012		31 Jan 2013		2,650		2,650
A A Flockhart ...............................	29 Apr 2009		3.3116		1 Aug 2014		31 Jan 2015		4,529		4,529

The HSBC Holdings savings-related share option plans are all-employee share plans under which eligible HSBC employees may be granted options to acquire HSBC Holdings ordinary shares. Employees may make contributions of up to £250 (or equivalent) each month over a period of one, three or five years which may be used on the first, third or fifth anniversary of the commencement of the relevant savings contract, at the employee's election, to exercise the options. The plans help align the interests of employees with the creation of shareholder value and, as such, exercise of the options is not subject to any performance conditions. The options were awarded for nil consideration and are exercisable at a 20 per cent discount to the average market value of the ordinary shares on the five business days immediately preceding the invitation date. There are no performance criteria conditional upon which the outstanding options are exercisable and there have been no variations to the terms and conditions since the awards were made. The market value per share of the ordinary shares at 30 June 2010 was £6.152. The highest and lowest market values per share during the period were £7.404 and £6.152. Market value is the mid-market price derived from the London Stock Exchange Daily Official List on the relevant date. Under the Securities and Futures Ordinance of Hong Kong, the options are categorised as unlisted physically settled equity derivatives.

1  May be advanced to an earlier date in certain circumstances, e.g. retirement.

Awards of Performance Shares

HSBC Share Plan

HSBC Holdings ordinary shares of US$0.50

	Date of           award		Year in             which            awards        may vest		Awards          held at            1 Jan              2010		Awards vested during period1,2				Awards          held at          30 Jun              20103
									Monetary
							Number		value
									£000
V H C Cheng ..............................	5 Mar 20071,2	2010	2010		218,035		83,769		560		-
	3 Jun 2008	2011	2011		157,852		-		-		160,442
D J Flint ....................................	5 Mar 20071,2	2010	2010		326,626		125,489		838		-
	3 Jun 2008	2011	2011		455,210		-		-		462,678
A A Flockhart ...........................	5 Mar 20071,2	2010	2010		145,238		55,799		373		-
	3 Jun 2008	2011	2011		155,227		-		-		157,774
M F Geoghegan ..........................	5 Mar 20071,2	2010	2010		742,334		285,205		1,905		-
	3 Jun 2008	2011	2011		1,069,746		-		-		1,087,295
S K Green ..................................	5 Mar 20071,2	2010	2010		556,750		213,903		1,429		-
	3 Jun 2008	2011	2011		1,251,829		-		-		1,272,366
S T Gulliver ...............................	5 Mar 20071,2	2010	2010		161,319		61,979		414		-
	3 Jun 2008	2011	2011		67,631		-		-		68,740

Vesting of these awards of Performance Shares is subject to the achievement of the corporate performance conditions set out on pages 339 to 342 of the Annual Report and Accounts 2009. Interests in awards of Performance Shares are categorised under the Securities and Futures Ordinance of Hong Kong as the interests of a beneficiary of a trust.

1  The performance conditions of the total shareholder return element of the award were partially met and the following part of the awards vested on 31 March 2010, when the market value per share was £6.68: V H C Cheng, 82,957 shares; D J Flint, 124,273 shares;
A A Flockhart, 55,259 shares; M F Geoghegan, 282,440 shares; S K Green, 211,830 shares; and S T Gulliver, 61,378 shares. The following awards representing the fourth interim dividend for 2009 vested on 5 May 2010 when the market value per share was £6.53: V H C Cheng, 812 shares; D J Flint, 1,216 shares; A A Flockhart, 540 shares; M F Geoghegan, 2,765 shares; S K Green, 2,073 shares; and S T Gulliver, 601 shares. The market value per share on the date of the award, 5 March 2007, was £8.96.

2  The performance conditions for the earnings per share element and the remaining part of the total shareholder return element of the award were not met and, under the terms of the Plan, the following awards were forfeited on 31 March 2010: V H C Cheng, 136,506 shares; D J Flint, 204,493 shares; A A Flockhart, 90,931 shares; M F Geoghegan, 464,757 shares; S K Green, 348,568 shares; and S T Gulliver, 100,998 shares. As a consequence, the fourth interim dividend for 2009 did not accrue on the forfeited shares.

3  Includes additional shares arising from scrip dividends.

Awards of Restricted Shares

HSBC Share Plan

HSBC Holdings ordinary shares of US$0.50

			Year in		Awards		Awards made during period1				Awards vested during period2				Awards
			which		held at										held at
	Date of		awards		1 Jan				Monetary				Monetary		30 Jun
	award		may vest		2010		Number		value		Number		value		20103
									£000				£000
V H C Cheng ......	3 Mar2008	2010	2011		103,936		-		-		104,616		713		-
	2 Mar 2009	2011	2012		493,545		-		-		-		-		501,641
	1 Mar 2010		2013		-		193,534		1,320		-		-		195,428
D J Flint.............	1 Mar 2010		2011-20134		-		307,917		2,100		-		-		310,931
A A Flockhart ...	31 Oct 2007		2010		64,621		-		-		-		-		65,681
	3 Mar 2008		2011		15,064		-		-		-		-		15,310
	2 Mar 2009		2012		498,124		-		-		-		-		506,296
	1 Mar 2010		2011-20134		-		297,746		2,031		-		-		300,660
M F Geoghegan...	1 Mar 2010		2011-20134		-		586,510		4,000		-		-		592,251
S T Gulliver .......	5 Mar 2007		2009-20104		191,842		-		-		193,099		1,317		-
	3 Mar 2008		2009-20114		388,157		-		-		202,986		1,384		189,552
	1 Mar 2010		2011-20134		-		1,319,648		9,000		-		-		1,332,566

Vesting of Restricted Share awards is normally subject to the Director remaining an employee on the vesting date. The vesting date may be advanced to an earlier date in certain circumstances, e.g. death or retirement. Under the Securities and Futures Ordinance of Hong Kong, interests in Restricted Share awards granted in 2007 and 2008 are categorised as the interests of a beneficiary of a trust and interests in Restricted Share awards granted in 2009 and 2010 are categorised as the interests of a beneficial owner.

1  At the date of the award, 1 March 2010, the market value per share was £6.82.

2  At the date of vesting, 1 March 2010, the market value per share was £6.82. The market value per share on the dates of the awards, 5 March 2007 and 3 March 2008, was £8.96 and £7.90 respectively.

3  Includes additional shares arising from scrip dividends.

4  33 per cent of the award vests on each of the first and second anniversaries of the date of the award, with the balance vesting on the third anniversary of the date of the award.

No Directors held any short position as defined in the Securities and Futures Ordinance of Hong Kong in the shares and loan capital of HSBC and its associated corporations. Save as stated above, none of the Directors had an interest in any shares or debentures of HSBC or any associated corporation at the beginning or at the end of the period, and none of the Directors or members of their immediate families was awarded or exercised any right to subscribe for any shares or debentures in any HSBC corporation during the period. Since the end of the period, the interests of each of the following Directors have increased by the number of HSBC Holdings ordinary shares shown against their name:

Increase in Directors' interests since 30 June 2010

HSBC Holdings ordinary shares of US$0.50

	Beneficial           owner		Child under 18 or spouse1		Trustee1
V H C Cheng .....................................................................................................	11,8752		1,653		-
J D Coombe .......................................................................................................	1781		-		-
D J Flint ............................................................................................................	6,9663		-		295
A A Flockhart ...................................................................................................	9,5984		-		-
M F Geoghegan .................................................................................................	18,1575		-		-
S K Green ..........................................................................................................	11,3596		-		-
S T Gulliver .......................................................................................................	14,1547		5		-
G Morgan ..........................................................................................................	7091		-		-
Sir Simon Robertson ..........................................................................................	751		-		-
Sir Brian Williamson .........................................................................................	3291		-		-

1  Scrip dividend.

2  Comprises scrip dividend on ordinary shares (4,245 shares) and on Performance Share and Restricted Share awards granted under the HSBC Share Plan (7,630 shares).

3  Comprises the automatic reinvestment of dividend income by an Individual Savings Account manager (45 shares), the acquisition of shares in the HSBC Holdings UK Share Incentive Plan through regular monthly contributions (19 shares), the automatic reinvestment of

    dividend income on shares held in the plan (20 shares) and scrip dividends on Performance Share and Restricted Share awards granted under the HSBC Share Plan (6,882 shares).

4  Comprises scrip dividend on ordinary shares (295 shares) and on Performance Share and Restricted Share awards granted under the HSBC Share Plan (9,303 shares).

5  Comprises scrip dividend on ordinary shares (3,213 shares) and on Performance Share and Restricted Share awards granted under the HSBC Share Plan (14,944 shares).

6  Comprises acquisition of shares in the HSBC Holdings UK Share Incentive Plan through regular monthly contributions (19 shares), the automatic reinvestment of dividend income on shares held in the plan (20 shares) and scrip dividends on Performance Share award granted under the HSBC Share Plan (11,320 shares).

7  Scrip dividend on Performance Share and Restricted Share awards granted under the HSBC Share Plan.

2     Employee share option plans

To help align the interests of employees with those of shareholders, share options are granted under all-employee share plans and discretionary awards of Performance Shares and Restricted Shares are made under the HSBC Share Plan. 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 were granted at nil consideration. 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 by HSBC during the period. The options which were awarded, exercised or lapsed during the period are detailed in the tables below. Particulars of options held by Directors of HSBC Holdings are set out on page 236.

All-employee share option plans

The exercise period of the options awarded under all-employee share plans may be advanced to an earlier date in certain circumstances, for example on retirement, and may be extended in certain circumstances, for example on the death of a participant the executors may exercise the option up to six months beyond the normal exercise period. The middle market closing price per HSBC Holdings ordinary share quoted on the London Stock Exchange, as derived from the Daily Official List on 20 April 2010, the day before options were awarded in 2010, was £6.917. The options are exercisable at a 20 per cent discount to the average market value of the ordinary shares on the five business days immediately preceding the invitation date, unless otherwise indicated.

HSBC Holdings Savings-Related Share Option Plan

HSBC Holdings ordinary shares of US$0.50

Date of award	Exercise          price             (£)		Exercisable				At           1 Jan             2010		Awarded         during          period		Exercised        during       period1		Lapsed         during          period		At         30 Jun             2010
			from		until
21 Apr 2004	5.6399		1 Aug 2009		31 Jan 2010		1,699,603		-		379,098		1,317,575		2,930
24 May 2005	5.8205		1 Aug 2010		31 Jan 2011		2,298,128		-		37,157		35,593		2,225,378
26 Apr 2006	6.6870		1 Aug 2009		31 Jan 2010		2,217,423		-		237,630		1,976,565		3,228
26 Apr 2006	6.6870		1 Aug 2011		31 Jan 2012		1,162,904		-		7,153		67,614		1,088,137
25 Apr 2007	6.1760		1 Aug 2010		31 Jan 2011		1,625,920		-		35,016		80,938		1,509,966
25 Apr 2007	6.1760		1 Aug 2012		31 Jan 2013		1,350,019		-		11,898		77,026		1,261,095
30 Apr 2008	5.9397		1 Aug 2011		31 Jan 2012		2,034,844		-		26,276		179,953		1,828,615
30 Apr 2008	5.9397		1 Aug 2013		31 Jan 2014		1,784,690		-		6,235		101,014		1,677,441
29 Apr 2009	3.3116		1 Aug 2012		31 Jan 2013		31,928,740		-		185,001		1,722,095		30,021,644
29 Apr 2009	3.3116		1 Aug 2014		31 Jan 2015		30,464,057		-		78,664		1,115,406		29,269,987
21 Apr 2010	5.4573		1 Aug 2013		31 Jan 2014		-		3,971,170		-		17,811		3,953,359
21 Apr 2010	5.4573		1 Aug 2015		31 Jan 2016		-		2,212,133		-		5,977		2,206,156

1  The weighted average closing price of the shares immediately before the dates on which options were exercised was £6.73.

The fair value of options granted in the period under the Plan was US$15 million.

HSBC Holdings Savings-Related Share Option Plan: International

HSBC Holdings ordinary shares of US$0.50

Date of award	Exercise          price             (£)		Exercisable				At           1 Jan             2010		Awarded         during          period		Exercised        during        period1		Lapsed         during          period		At         30 Jun             2010
			from		until
21 Apr 2004	5.6399		1 Aug 2009		31 Jan 2010		8,554		-		-		8,554		-
10 May 2004	5.6399		1 Aug 2009		31 Jan 2010		379,187		-		188,340		190,847		-
24 May 2005	5.8205		1 Aug 2010		31 Jan 2011		930,050		-		11,358		41,618		877,074
26 Apr 2006	6.6870		1 Aug 2009		31 Jan 2010		395,176		-		128,709		266,467		-
26 Apr 2006	6.6870		1 Aug 2011		31 Jan 2012		136,732		-		70		3,472		133,190
25 Apr 2007	6.1760		1 Aug 2010		31 Jan 2011		1,170,757		-		14,104		141,548		1,015,105
25 Apr 2007	6.1760		1 Aug 2012		31 Jan 2013		303,481		-		1,597		14,824		287,060
30 Apr 2008	5.9397		1 Aug 2011		31 Jan 2012		1,143,752		-		9,142		89,076		1,045,534
30 Apr 2008	5.9397		1 Aug 2013		31 Jan 2014		368,773		-		1,828		39,837		327,108
29 Apr 2009	3.3116		1 Aug 2010		31 Oct 2010		4,463,153		-		25,683		246,703		4,190,767
29 Apr 2009	3.3116		1 Aug 2012		31 Jan 2013		12,432,631		-		30,738		549,466		11,852,427
29 Apr 2009	3.3116		1 Aug 2014		31 Jan 2015		7,932,036		-		14,801		217,289		7,699,946
21 Apr 2010	5.4573		1 Aug 2011		31 Oct 2011		-		4,855,376		-		13,479		4,841,897
21 Apr 2010	5.4573		1 Aug 2013		31 Jan 2014		-		2,071,218		-		5,786		2,065,432
21 Apr 2010	5.4573		1 Aug 2015		31 Jan 2016		-		659,000		-		1,907		657,093
	(US$)
26 Apr 2006	11.6154		1 Aug 2009		31 Jan 2010		237,487		-		30,974		206,513		-
26 Apr 2006	11.6154		1 Aug 2011		31 Jan 2012		177,996		-		-		17,473		160,523
25 Apr 2007	12.0958		1 Aug 2010		31 Jan 2011		1,091,673		-		495		107,133		984,045
25 Apr 2007	12.0958		1 Aug 2012		31 Jan 2013		314,740		-		-		46,294		268,446
30 Apr 2008	11.8824		1 Aug 2011		31 Jan 2012		923,472		-		-		132,971		790,501
30 Apr 2008	11.8824		1 Aug 2013		31 Jan 2014		257,851		-		-		34,817		223,034
29 Apr 2009	5.19312		1 Aug 2010		31 Oct 2010		1,028,591		-		-		82,593		945,998
29 Apr 2009	4.8876		1 Aug 2010		31 Oct 2010		579,122		-		5,621		30,830		542,671
29 Apr 2009	4.8876		1 Aug 2012		31 Jan 2013		4,922,956		-		7,172		201,720		4,714,064
29 Apr 2009	4.8876		1 Aug 2014		31 Jan 2015		2,539,328		-		-		83,178		2,456,150
21 Apr 2010	8.1232		1 Aug 2011		31 Oct 2011		-		350,623		-		-		350,623
21 Apr 2010	8.63092		1 Aug 2011		31 Oct 2011		-		634,163		-		-		634,163
21 Apr 2010	8.1232		1 Aug 2013		31 Jan 2014		-		1,236,768		-		-		1,236,768
21 Apr 2010	8.1232		1 Aug 2015		31 Jan 2016		-		313,833		-		-		313,833
	(€)
26 Apr 2006	9.5912		1 Aug 2009		31 Jan 2010		53,020		-		1,401		51,619		-
26 Apr 2006	9.5912		1 Aug 2011		31 Jan 2012		10,738		-		-		320		10,418
25 Apr 2007	9.0818		1 Aug 2010		31 Jan 2011		140,166		-		-		5,687		134,479
25 Apr 2007	9.0818		1 Aug 2012		31 Jan 2013		37,473		-		-		2,547		34,926
30 Apr 2008	7.5571		1 Aug 2011		31 Jan 2012		164,438		-		-		18,262		146,176
30 Apr 2008	7.5571		1 Aug 2013		31 Jan 2014		37,873		-		-		6,348		31,525
29 Apr 2009	3.6361		1 Aug 2010		31 Oct 2010		361,736		-		3,018		9,116		349,602
29 Apr 2009	3.6361		1 Aug 2012		31 Jan 2013		1,440,663		-		1,379		34,000		1,405,284
29 Apr 2009	3.6361		1 Aug 2014		31 Jan 2015		1,037,603		-		1,044		30,230		1,006,329
21 Apr 2010	6.0657		1 Aug 2011		31 Oct 2011		-		216,485		-		592		215,893
21 Apr 2010	6.0657		1 Aug 2013		31 Jan 2014		-		249,136		-		-		249,136
21 Apr 2010	6.0657		1 Aug 2015		31 Jan 2016		-		90,182		-		-		90,182
	(HK$)
26 Apr 2006	90.1414		1 Aug 2009		31 Jan 2010		154,477		-		5,623		148,854		-
26 Apr 2006	90.1414		1 Aug 2011		31 Jan 2012		50,894		-		-		6,823		44,071
25 Apr 2007	94.5057		1 Aug 2010		31 Jan 2011		165,096		-		-		13,711		151,385
25 Apr 2007	94.5057		1 Aug 2012		31 Jan 2013		57,205		-		-		9,038		48,167
30 Apr 2008	92.5881		1 Aug 2011		31 Jan 2012		97,011		-		-		12,687		84,324
30 Apr 2008	92.5881		1 Aug 2013		31 Jan 2014		57,554		-		-		6,615		50,939
29 Apr 2009	37.8797		1 Aug 2010		31 Oct 2010		5,537,853		-		63,161		264,083		5,210,609
29 Apr 2009	37.8797		1 Aug 2012		31 Jan 2013		23,530,423		-		55,169		633,305		22,841,949
29 Apr 2009	37.8797		1 Aug 2014		31 Jan 2015		21,287,729		-		27,197		385,365		20,875,167
21 Apr 2010	62.9770		1 Aug 2011		31 Oct 2011		-		3,017,668		-		-		3,017,668
21 Apr 2010	62.9770		1 Aug 2013		31 Jan 2014		-		1,573,724		-		-		1,573,724
21 Apr 2010	62.9770		1 Aug 2015		31 Jan 2016		-		565,737		-		-		565,737

1  The weighted average closing price of the shares immediately before the dates on which the options were exercised was £6.75.

2    Exercisable at a 15 per cent discount to the average market value of the ordinary shares on the five business days immediately preceding the invitation date.

The fair value of options granted in the period under the Plan was US$37 million.

Fair values of share options awarded under all-employee share option plans in 2010, measured at the date of grant of the option, are calculated using a Black-Scholes model.

The expected life of options depends on the behaviour of option holders, which is incorporated into the option model on the basis of historic observable data. The fair values calculated are inherently subjective and uncertain due to the assumptions made and the limitations of the model used. The significant weighted average assumptions used to estimate the fair value of the options granted in 2010 were as follows:

	1-year savings-related     share option                  plan		3-year savings-related     share option                plans		5-year savings-related     share option                 plans
Risk-free interest rate (%)1 .................................................................	0.7		2.1		2.4
Expected life (years)2  .........................................................................	1		3		5
Expected volatility (%)3 .....................................................................	50		35		30

1  The risk-free interest rate was determined from the UK gilts zero-coupon yield curve for the HSBC Holdings Savings-Related Share Option Plan. A similar yield curve was used for the HSBC Holdings Savings-Related Share Option Plan: International.

2  Expected life is not a single input parameter but a function of various behavioural assumptions.

3  Expected volatility is estimated by considering historic average HSBC share price volatility and implied volatility for traded options over HSBC shares of similar maturity to those of the employee options.

Expected dividend yield was determined to be 4.5 per cent per annum, in line with consensus analyst forecasts.

Discretionary share option plans

Discretionary share options were awarded under employee share plans until 2005. There have been no awards of discretionary options since 30 September 2005 save for an award by HSBC InvestDirect (India) Limited before it was acquired by HSBC as set out below. The exercise period of the options awarded under discretionary share incentive plans may be advanced to an earlier date in certain circumstances, for example on the sale of a business.

HSBC Holdings Executive Share Option Scheme¹

HSBC Holdings ordinary shares of US$0.50

Date of award

Exercise            price               (£)

Exercisable

At          1 Jan           2010

Exercised        during        period2

Lapsed        during        period

At        30 Jun           2010

from

until

3 Apr 2000 ....................

6.5009

3 Apr 2003

3 Apr 2010

6,706,848

4,228,503

2,478,345

-

1  The HSBC Holdings Executive Share Option Scheme expired on 26 May 2000. No options have been granted under the Scheme since that date.

2  The weighted average closing price of the shares immediately before the dates on which options were exercised was £6.85.

HSBC Holdings Group Share Option Plan¹

HSBC Holdings ordinary shares of US$0.50

Date of award	Exercise            price               (£)		Exercisable				At          1 Jan           2010		Exercised        during        period2		Lapsed        during        period		At        30 Jun           2010
			from		until
4 Oct 2000 .....................	8.4024		4 Oct 2003		4 Oct 2010		339,727		-		11,250		328,477
23 Apr 2001 ..................	7.5919		23 Apr 2004		23 Apr 2011		29,251,071		-		251,102		28,999,969
30 Aug 2001 ..................	7.1702		30 Aug 2004		30 Aug 2011		154,481		-		861		153,620
7 May 2002 ...................	7.3244		7 May 2005		7 May 2012		31,204,234		7,171		304,508		30,892,555
30 Aug 2002 ..................	6.4966		30 Aug 2005		30 Aug 2012		387,696		2,295		-		385,401
2 May 2003 ...................	6.0216		2 May 2006		2 May 2013		27,917,978		584,559		222,287		27,111,132
29 Aug 2003 ..................	7.0848		29 Aug 2006		29 Aug 2013		371,782		-		-		371,782
3 Nov 2003 ....................	7.9606		3 Nov 2006		3 Nov 2013		4,612,854		-		-		4,612,854
30 Apr 2004 ..................	7.2181		30 Apr 2007		30 Apr 2014		56,270,318		38,234		675,802		55,556,282
27 Aug 2004 ..................	7.5379		27 Aug 2007		27 Aug 2014		324,947		-		-		324,947
20 Apr 2005 ..................	7.2869		20 Apr 2008		20 Apr 2015		6,884,397		-		125,082		6,759,315

1  The HSBC Holdings Group Share Option Plan expired on 26 May 2005. No options have been granted under the Plan since that date.

2  The weighted average closing price of the shares immediately before the dates on which options were exercised was £6.88.

HSBC Share Plan

HSBC Holdings ordinary shares of US$0.50

Date of award

Exercise            price               (£)

Exercisable

At          1 Jan           2010

Exercised        during        period

Lapsed        during        period

At        30 Jun           2010

from

until

30 Sep 2005 ...................

7.9911

30 Sep 2008

30 Sep 2015

86,046

-

-

86,046

 

Subsidiary company share plans

HSBC France and subsidiary company

When it was acquired in 2000, HSBC France and one of its subsidiary companies, HSBC Private Bank France, operated employee share option plans under which options could be granted over their respective shares. No further options will be granted under either of these companies' plans. The following are details of options to acquire shares in HSBC France and HSBC Private Bank France.

HSBC France

Shares of €5

Date of award

Exercise            price               (€)

Exercisable

At          1 Jan           2010

Exercised        during        period

Lapsed        during        period

At        30 Jun           2010

from

until

12 Apr 2000 ..................

142.50

1 Jan 2002

12 Apr 2010

604,250

-

604,250

-

HSBC Private Bank France

Shares of €2

Date of award	Exercise            price               (€)		Exercisable				At          1 Jan           2010		Exercised        during        period1		Lapsed        during        period		At        30 Jun           20101
			from		until
10 Mar 2000 ..................	12.44		27 Jun 2004		31 Dec 2010		4,420		-		-		4,420
15 May 2001 .................	20.80		15 May 2002		15 May 2011		141,525		-		-		141,525
1 Oct 2002 .....................	22.22		2 Oct 2005		1 Oct 2012		145,575		-		-		145,575

1  Following exercise of the options, the HSBC Private Bank France shares will be exchanged for HSBC Holdings ordinary shares in the ratio of 2.099984 HSBC Holdings ordinary shares for each HSBC Private Bank France share. At 30 June 2010, The CCF Employee Benefit Trust 2001 held 998,783 HSBC Holdings ordinary shares which may be exchanged for HSBC Private Bank France shares arising from the exercise of these options.

HSBC Finance

Following the acquisition of HSBC Finance in 2003, all outstanding options and equity-based awards over HSBC Finance common shares were converted into rights to receive HSBC Holdings ordinary shares in the same ratio as the share exchange offer for the acquisition of HSBC Finance (2.675 HSBC Holdings ordinary shares for each HSBC Finance common share) and the exercise prices per share were adjusted accordingly. No further options will be granted under any of these plans.

The following are details of options and equity-based awards to acquire shares in HSBC Holdings. At 30 June 2010, the HSBC (Household) Employee Benefit Trust 2003 held 2,642,279 HSBC Holdings ordinary shares and 1,455 American Depositary Shares, each of which represents five ordinary shares, which may be used to satisfy the exercise of employee share options.

HSBC Finance: 1996 Long-Term Executive Incentive Compensation Plan

HSBC Holdings ordinary shares of US$0.50

Date of award	Exercise            price          (US$)		Exercisable				At          1 Jan           2010		Exercised        during        period		Lapsed        during        period		At        30 Jun           2010
			from		until
8 Feb 2000 .....................	11.56		8 Feb 2001		8 Feb 2010		76,741		-		76,741		-
30 Jun 2000 ...................	13.68		30 Jun 2001		30 Jun 2010		30,805		-		-		30,805
13 Nov 2000 ..................	16.03		13 Nov 2001		13 Nov 2010		6,573,623		-		-		6,573,623
12 Nov 2001 ..................	18.62		12 Nov 2002		12 Nov 2011		8,688,288		-		-		8,688,288
20 Nov 2002 ..................	9.29		20 Nov 2003		20 Nov 2012		2,736,502		-		-		2,736,502

 

HSBC Bank Bermuda

Following the acquisition of HSBC Bank Bermuda in 2004, all outstanding options over HSBC Bank Bermuda shares were converted into rights to receive HSBC Holdings ordinary shares based on the consideration of US$40 for each HSBC Bank Bermuda share and the average closing price of HSBC Holdings ordinary shares, derived from the London Stock Exchange Daily Official List, for the five business days preceding the closing date of the acquisition. No further options will be granted under any of these plans.

The following are details of options to acquire shares in HSBC Holdings. At 30 June 2010 the HSBC (Bank of Bermuda) Employee Benefit Trust 2004 held 2,108,830 HSBC Holdings ordinary shares which may be used to satisfy the exercise of employee share options.

HSBC Bank Bermuda: Executive Share Option Plan 1997

HSBC Holdings ordinary shares of US$0.50

Date of award	Exercise            price          (US$)		Exercisable				At          1 Jan           2010		Exercised        during        period1		Lapsed        during        period		At        30 Jun           2010
			from		until
4 Feb 2000 .....................	6.28		4 Feb 2001		4 Feb 2010		25,739		4,781		20,958		-
1 Jun 2000 .....................	6.13		1 Jun 2001		1 Jun 2010		70,744		-		70,744		-
31 Jul 2000 ....................	8.81		31 Jul 2001		31 Jul 2010		31,837		-		-		31,837
11 Jan 2001 ...................	12.44		11 Jan 2002		11 Jan 2011		61,901		-		-		61,901

1  The weighted average closing price of the shares immediately before the dates on which options were exercised was £6.89.

HSBC Bank Bermuda: Share Option Plan 2000

HSBC Holdings ordinary shares of US$0.50

Date of award	Exercise            price          (US$)		Exercisable				At          1 Jan           2010		Exercised        during        period		Lapsed        during        period		At        30 Jun           2010
			from		until
11 Jan 2001 ...................	12.44		11 Jan 2002		11 Jan 2011		154,753		-		-		154,753
6 Feb 2001 .....................	14.30		6 Feb 2002		6 Feb 2011		637,501		-		-		637,501
29 Mar 2001 ..................	13.41		29 Mar 2002		29 Mar 2011		310		-		-		310
16 Apr 2001 ..................	13.57		16 Apr 2002		16 Apr 2011		619		-		-		619
6 Jun 2001 .....................	15.99		6 Jun 2002		6 Jun 2011		9,285		-		-		9,285
16 Jul 2001 ....................	14.70		16 Jul 2002		16 Jul 2011		17,133		-		-		17,133
28 Aug 2001 ..................	13.41		28 Aug 2002		28 Aug 2011		15,476		-		-		15,476
26 Sep 2001 ...................	11.15		26 Sep 2002		26 Sep 2011		401,863		-		-		401,863
30 Jan 2002 ...................	13.59		30 Jan 2003		30 Jan 2012		1,407		-		-		1,407
5 Feb 2002 .....................	14.02		5 Feb 2003		5 Feb 2012		848,626		-		-		848,626
10 Jul 2002 ....................	13.80		10 Jul 2003		10 Jul 2012		14,069		-		-		14,069
4 Feb 2003 .....................	9.32		4 Feb 2004		4 Feb 2013		142,082		-		-		142,082
21 Apr 2003 ..................	10.33		21 Apr 2004		21 Apr 2013		7,842		-		-		7,842

 

HSBC Bank Bermuda: Directors' Share Option Plan

HSBC Holdings ordinary shares of US$0.50

Date of award	Exercise            price          (US$)		Exercisable				At          1 Jan           2010		Exercised        during        period		Lapsed        during        period		At        30 Jun           2010
			from		until
28 Mar 2001 ..................	13.73		28 Mar 2002		28 Mar 2011		12,380		-		3,095		9,285
3 Apr 2002 ....................	13.95		3 Apr 2003		3 Apr 2012		22,508		-		5,627		16,881
30 Apr 2003 ..................	10.66		30 Apr 2004		30 Apr 2013		5,627		-		5,627		-

HSBC InvestDirect (India) Limited

When it was acquired in 2008, HSBC InvestDirect (India) Limited, formerly IL&FS Investsmart Limited, operated an employee share option plan. Under the plan, the options vested one year from the date of grant in equal tranches over three years. The exercise period is a maximum of seven years from the date of vesting. Following the acquisition, all outstanding options vested on 18 November 2008. No further options will be granted under this plan. The following are details of the outstanding options to acquire shares in HSBC InvestDirect (India) Limited.

HSBC InvestDirect (India) Limited: Employee Stock Option Scheme 2006

Date of award

Exercise            price             (Rs)

Exercisable

At          1 Jan           2010

Exercised        during        period1

Lapsed        during        period

At        30 Jun           2010

from

until

19 Nov 2007 ..................

180

18 Nov 2008

17 Nov 2015

873,000

746,500

-

126,500

1  The weighted average closing price of the shares, as quoted on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited, immediately before the dates on which options were exercised was Rs306.13 and Rs305.01 respectively.

3     Notifiable interests in share capital

As at 30 June 2010, the following disclosures of major holdings of voting rights had been received by the Company (and have not been subsequently amended or withdrawn) pursuant to the requirements of rule 5 of the FSA Disclosure Rules and Transparency Rules:

·     Barclays PLC gave notice on 17 April 2007 that it had an indirect interest on 16 April 2007 in 518,233,657 HSBC Holdings ordinary shares, representing 4.47 per cent of the total voting rights at that date.

·     Legal & General Group Plc gave notice on 3 March 2010 that it had a direct interest on 2 March 2010 in 696,986,631 HSBC Holdings ordinary shares, representing 4 per cent of the total voting rights at that date and gave notice on 9 March 2010 that on 8 March 2010 its holding of HSBC ordinary shares fell to 3.99 per cent of the total voting rights at that date.

As at 30 June 2010, according to the register maintained by HSBC Holdings pursuant to section 336 of the Securities and Futures Ordinance of Hong Kong:

·      JPMorgan Chase & Co. gave notice on 27 May 2010 that on 25 May 2010 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,131,969,644 shares, a short position of 60,224,375 shares and a lending pool of 835,769,343 shares, each representing 6.46 per cent, 0.34 per cent and 4.77 per cent respectively of the ordinary shares in issue at that date.

·      BlackRock, Inc. gave notice on 25 June 2010 that on 21 June 2010 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,046,847,742 shares and a short position of 5,515,403 shares, each representing 5.98 per cent and 0.03 per cent respectively of the ordinary shares in issue at that date.

4     Dealings in HSBC Holdings shares

Except for dealings as intermediaries by HSBC Bank, HSBC Financial Products (France) SNC and The Hongkong and Shanghai Banking Corporation Limited, which are members of a European Economic Area exchange, neither HSBC Holdings nor any subsidiary undertaking has bought, sold or redeemed any securities of HSBC Holdings during the six months to 30 June 2010.

5     First interim dividend for 2010

The first interim dividend for 2010 of US$0.08 per ordinary share was paid on 7 July 2010.

6     Second interim dividend for 2010

The Directors have declared a second interim dividend for 2010 of US$0.08 per ordinary share. The second interim dividend will be payable on 6 October 2010 to holders of record on 19 August 2010 on the Hong Kong Overseas Branch Register and 20 August 2010 on the Principal Register in the United Kingdom or the Bermuda Overseas Branch Register. The dividend will be payable in cash, in US dollars, sterling or Hong Kong dollars, or a combination of these currencies, at the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00 am on 27 September 2010, and with a scrip dividend alternative. Particulars of these arrangements will be mailed to shareholders on or about 1 September 2010 and elections must be received by 22 September 2010.

The dividend will be payable on ordinary shares held through Euroclear France, the settlement and central depositary system for Euronext Paris, on 6 October 2010 to the holders of record on 20 August 2010. The dividend will be payable in cash in euros at the exchange rate quoted on 27 September 2010, and with a scrip dividend alternative. Particulars of these arrangements will be announced through Euronext Paris on 16 August and 25 August 2010.

The dividend will be payable on ADSs each of which represents five ordinary shares, on 6 October 2010 to holders of record on 20 August 2010. The dividend of US$0.40 per ADS will be payable in cash, in US dollars and with a scrip dividend alternative of new ADSs. Particulars of these arrangements will be mailed to holders on or about 1 September 2010. Elections must be received by the depositary on or before 15 September 2010. Alternatively, the cash dividend may be invested in additional ADSs for participants in the dividend reinvestment plan operated by the depositary.

HSBC Holdings ordinary shares will be quoted ex-dividend in London, Hong Kong, Paris and Bermuda on 18 August 2010. The ADSs will be quoted ex-dividend in New York on 18 August 2010.

Removals of ordinary shares may not be made to or from the Hong Kong Overseas Branch Register on Friday 20 August 2010. Accordingly any person who wishes to remove shares to the Hong Kong Overseas Branch Register must lodge the removal request with the Principal Registrar in the United Kingdom or the Bermuda Overseas Branch Registrar by 4.00 pm on Wednesday 18 August 2010; any person who wishes to remove shares from the Hong Kong Overseas Branch Register must lodge the removal request with the Hong Kong Overseas Branch Registrar by 4.00 pm on Thursday 19 August 2010.

Any person who has acquired ordinary shares registered on the Hong Kong Overseas Branch Register but who has not lodged the share transfer with the Hong Kong Overseas Branch Registrar should do so before 4.00 pm on Thursday 19 August 2010 in order to receive the dividend.

Any person who has acquired ordinary shares registered on the Principal Register in the United Kingdom but who has not lodged the share transfer with the Principal Registrar should do so before 4.00 pm on Friday 20 August 2010 in order to receive the dividend.

Any person who has acquired ordinary shares registered on the Bermuda Overseas Branch Register but who has not lodged the share transfer with the Bermuda Overseas Branch Registrar should do so before 4.00 pm on Friday 20 August 2010 in order to receive the dividend.

Transfers of ADSs must be lodged with the depositary by 12 noon on 20 August 2010 in order to receive the dividend.

7     Proposed interim dividends for 2010

The Board has adopted a policy of paying quarterly dividends on the ordinary shares. Under this policy it is intended to have a pattern of three equal interim dividends with a variable fourth interim dividend. The proposed timetables for dividends payable on the ordinary shares in respect of 2010 that have not yet been declared are:

	Third interim     dividend for 2010		Fourth interim     dividend for 2010
Announcement ..............................................................................................................	1 November 2010		28 February 2011
Shares quoted ex-dividend in London, Hong Kong, Paris and Bermuda ............................	17 November 2010		16 March 2011
ADSs quoted ex-dividend in New York ...........................................................................	17 November 2010		16 March 2011
Record date in Hong Kong .............................................................................................	18 November 2010		17 March 2011
Record date in London, New York, Paris and Bermuda1 ..................................................	19 November 2010		18 March 2011
Payment date .................................................................................................................	12 January 2011		5 May 2011

1  Removals to and from the Overseas Branch Register of shareholders in Hong Kong will not be permitted on these dates.

8     Interim Management Statement

An Interim Management Statement is expected to be issued on 5 November 2010.

9     Final results

The results for the year to 31 December 2010 will be announced on Monday 28 February 2011.

10   Corporate governance

HSBC is committed to high standards of corporate governance.

HSBC Holdings has complied throughout the six months to 30 June 2010 with the applicable code provisions of the Combined Code on Corporate Governance issued by the Financial Reporting Council and the Code on Corporate Governance Practices in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The Board of HSBC Holdings has adopted a code of conduct for transactions in HSBC Group securities by Directors. The code of conduct complies with The Model Code in the Listing Rules of the Financial Services Authority and with The Model Code for Securities Transactions by Directors of Listed Issuers ('Hong Kong Model Code') set out in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, save that The Stock Exchange of Hong Kong Limited has granted certain waivers from strict compliance with the Hong Kong Model Code. The waivers granted by The Stock Exchange of Hong Kong Limited primarily take into account accepted practices in the UK, particularly in respect of employee share plans. Following specific enquiry, each Director has confirmed he or she has complied with the code of conduct for transactions in HSBC Group securities throughout the period.

There have been no material changes to the information disclosed in the Annual Report and Accounts 2009 in respect of the number and remuneration of employees, remuneration policies, bonus and share option plans and training schemes.

The biographies of Directors on pages 198 to 203 include changes during 2010 and the updated information required pursuant to rule 13.51B (1) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

11   Telephone and online share dealing service

For shareholders on the Principal Register who are resident in the UK, Channel Islands or Isle of Man with a UK, Channel Islands or Isle of Man postal address, and who hold an HSBC Bank personal current account, the HSBC InvestDirect sharedealing service is available for buying and selling HSBC Holdings ordinary shares. Details are available from: HSBC InvestDirect, PO Box 1683, Frobisher House, Nelson Gate, Southampton, SO15 9DG, UK telephone : [phone], Overseas telephone: + 44 (0) 1226 261090, Textphone: 18001 08456 088 877, web: www.hsbc.co.uk/shares.

12   Stock codes

HSBC Holdings plc ordinary shares trade under the following stock codes:

London Stock Exchange                                HSBA

Hong Kong Stock Exchange                        5

New York Stock Exchange (ADS)                HBC

Euronext Paris                                                 HSB

Bermuda Stock Exchange                              HSBC

13   Copies of the Interim Report 2010 and shareholder enquiries and communications

Further copies of the Interim Report 2010 may be obtained from Group Communications, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, United Kingdom; from Group Communications (Asia), The Hongkong and Shanghai Banking Corporation Limited, 1 Queen's Road Central, Hong Kong; from Internal Communications, HSBC - North America, 26525 North Riverwoods Boulevard, Mettawa, Illinois 60045, USA; or from the HSBC website, www.hsbc.com.

Shareholders may at any time choose to receive corporate communications in printed form or to receive a notification of their availability on HSBC's website. To receive future notifications of a corporate communication on HSBC's website by email, or revoke or amend an instruction to receive such notifications by email, go to www.hsbc.com/ecomms. If you provide an email address to receive electronic communications from HSBC you will also receive notifications of your dividend entitlements by email. If you received a notification of the availability of this document on HSBC's website and would like to receive a printed copy, or would like to receive future corporate communications in printed form, please write or send an email (quoting your shareholder reference number) to the appropriate Registrars at the address given below. Printed copies will be provided without charge.

Any enquiries relating to your shareholding, for example transfers of shares, change of name or address, lost share certificates or dividend cheques, should be sent to the Registrars at the address given below. The Registrars offer an online facility, Investor Centre, which enables shareholders to manage their shareholding electronically.

Principal Register	Hong Kong Overseas Branch Register	Bermuda Overseas Branch Register
Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ United Kingdom Telephone: [phone] Email via website: www.investorcentre.co.uk/contactus Investor Centre: www.investorcentre.co.uk	Computershare Hong Kong Investor Services Limited Hopewell Centre Rooms 1712-1716, 17th Floor 183 Queen's Road East Hong Kong Telephone: [phone] Email: [e-mail] Investor Centre: www.computershare.com/hk/investors	Investor Relations Team HSBC Bank Bermuda Limited 6 Front Street Hamilton HM 11 Bermuda Telephone: [phone] Email: [e-mail] Investor Centre: www.computershare.com/investor/bm

Any enquiries relating to ADSs should be sent to the Depositary, The Bank of New York Mellon, at:

BNY Mellon Shareowner Services PO Box 358516 Pittsburgh PA 15252-8516 USA

Telephone (US): 1 877 283 5786 Telephone (international): 1 201 680 6825 Email: [e-mail] Website: www.bnymellon.com/shareowner

Any enquiries relating to shares held through Euroclear France, the settlement and central depositary system for Euronext Paris, should be sent to the paying agent:

HSBC France

103 avenue des Champs Elysées

75419 Paris Cedex 08

France

Telephone: [phone]

Email: [e-mail]

Website: www.hsbc.fr

A Chinese translation of this and future documents may be obtained on request from the Registrars. Please also contact the Registrars if you have received a Chinese translation of this document and do not wish to receive such translations in the future.

Persons whose shares are held on their behalf by another person may have been nominated to receive communications from HSBC pursuant to section 146 of the UK Companies Act 2006 ('nominated persons'). The main point of contact for nominated persons remains the registered shareholder (for example your stockbroker, investment manager, custodian or other person who manages the investment on your behalf). Any changes or queries relating to nominated persons' personal details and holding (including any administration thereof) must continue to be directed to the registered shareholder and not HSBC's Registrars. The only exception is where HSBC, in exercising one of its powers under the UK Companies Act 2006, writes to nominated persons directly for a response.

 

END

 

 

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