Creative 2010 Annual Report Download - page 50

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50
CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
The 1999 Scheme expired on 29 December 2008. The existing options granted will continue to vest according to the terms
and conditions of the 1999 Scheme and the respective grants.
During the nancial year ended 30 June 2009, the Company granted 277,000 share options under the 1999 Scheme at an
exercise price per share of US$2.64. The weighted average fair value per share was US$0.64 using the Black Scholes option
pricing model.
The fair value of each share option granted is determined at the date of grant using the Black Scholes option-pricing model.
This model requires the input of highly subjective assumptions, including the option’s expected life, risk-free interest rates,
dividend yield and the price volatility of the underlying share. The expected life of the options represents the period of time
the options are expected to be outstanding and is based on historical trends. The expected share price volatility assumption
is determined using the historical volatility of the Company’s shares.
The following table presents the weighted average assumptions used in the Black Scholes option-pricing model for the share
option grants.
2010 2009
Exercise price – US$2.64
Expected volatility – 40%
Risk-free interest rates – 0.90% to 1.48%
Dividend yield – 2.6%
Expected life of options (in years) – 0.93 years after vest date
Movements in the number of unissued ordinary shares under option and their exercise prices were as follows:
Number of Weighted average
options exercise price
(’000) (US$)
Outstanding at 30 June 2008 10,202 6.63
Granted 277 2.64
Exercised (2) 2.92
Cancelled/Forfeited/Expired (1,463) 7.89
Outstanding at 30 June 2009 9,014 6.31
Exercised (7) 3.58
Cancelled/Forfeited/Expired (2,193) 8.20
Outstanding at 30 June 2010 6,814 5.70
Exercisable at 30 June 2010 5,678 5.96
Options exercised in the nancial year ended 30 June 2010 resulted in 7,000 treasury shares (2009: 2,000) being re-issued at
the exercise price of US$3.58 (2009: US$2.92) each. The weighted average share price at the date of exercise was US$4.27
(2009: US$4.42) per share.
notes to tHe fInAncIAl stAteMents
– For the nancial year ended 30 June 2010
24. SHARE CAPITAL AND TREASURY SHARES (cont’d)
(b) Share options (cont’d)