13.3.5 Sharesave Plan
The sharesave plan is available to most Group colleagues.
The plan allows colleagues to save a fixed amount of money on a monthly basis. At the end of a pre-determined period, of three, five or seven years, colleagues have the right, if they so choose, to use the funds accumulated to purchase shares in the Group at a fixed price, based on a market price on or an average market price determined shortly before the effective grant date and discounted by up to 20%. There are no performance conditions.
Certain Executive Directors have taken up membership of the plan and the projected numbers of shares which they would be entitled to purchase at the end of the relevant pre-determined periods are set out below:
 |
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| Table 8 | Grant effective from |
At 31.12.03/ 01.01.04 |
Granted (G) Exercised (E) or Lapsed (L) in year |
At 31.12.04 |
Exercisable |
|
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| James Crosby | Sep 02 | 2,748 | - | 2,748 | Jan 08 – Jun 08 |
| Phil Hodkinson | Sep 02 | 2,970 | - | 2,970 | Jan 10 – Jun 10 |
| Andy Hornby | Sep 03 | 1,607 | - | 1,607 | Jan 07 – Jun 07 |
| George Mitchell | Oct 01 | 1,723 | - | 1,723 | Jan 05 – Jun 05 |
| Sep 04 | - | 1,740 (G) | 1,740 | Jan 08 – Jun 08 | |
|
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Notes to Table 8
Note 1
Options under these plans were granted using market prices shortly before the dates of the grants, discounted by 20%, as follows:
|
|
| Effective date of grant | Share option price £ |
|
|
| Oct 2001 | 5.62 |
| Sep 2002 | 5.975 |
| Sep 2003 | 5.74 |
| Sep 2004 | 5.443 |
|
|
Note 2
Gordon McQueen, who retired as an Executive Director on 31 December 2003, exercised options over 2,397 shares on 16 June 2004.
He has no remaining options under the plan.
The closing market price on the date of exercise was £7.11.
Full details of these options were set out in last year’s Report.
Note 3
George Mitchell exercised options over 1,723 shares on 2 February 2005.
The closing market price on the date of exercise was £8.57.
George Mitchell retained ownership of these shares as at 1 March 2005, the date of approval of this Annual Report and Accounts.
Note 4
Details of the market price of the Group’s ordinary shares during 2004 are given in Section 13.3.7.
13.3.6 Interest in shares under Trusts
Certain Executive Directors, together with certain other colleagues, are deemed to have or have had an interest or a potential interest as potential discretionary beneficiaries under:
- the Group’s Employee Share Ownership Trusts. As such, they were each treated as at 31 December 2004 as being interested in the 5,298,695 ordinary shares (31 December 2003 - 9,884,870 ordinary shares) held by the trustees of these Trusts. The shares held in the Trusts will be used to satisfy share awards under the former Halifax Short Term and Long Term Incentive Plans and the HBOS Short Term and Long Term Incentive Plans. The relevant Executive Directors’ specific individual interests are shown in Tables 5 and 6; and
- the Group’s Qualifying Employee Share Ownership Trust. As such, they were each treated as at 31 December 2004 as being interested in the 8,260,555 ordinary shares (31 December 2003 – 10,154,710 ordinary shares) held by the trustee of this Trust. The shares held in the Trust will be used to satisfy entitlements of colleagues arising on the exercise of options under the Sharesave Schemes operated by HBOS plc. The relevant Executive Directors’ specific individual interests are shown in Table 8.
All of the Group’s share plans empower new issue shares to be allotted to satisfy share requirements. The Group’s past practice has generally been
to purchase shares in the market in relation to the plans described in Sections 13.3.2 and 13.3.3 and to issue new shares in relation to the plans described in Sections 13.3.4 and 13.3.5 and the Group’s share option scheme. This practice is under review, and any changes to the methods of satisfying awards or grants under the Group’s various share plans will be set out in the Annual Report and Accounts 2005.
