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2011/12 Annual Report Lenovo Group Limited
94
DIRECTORS’ REPORT
Directors’ Rights to Acquire Shares or Debentures (continued)
Share Option Scheme (continued)
2. New Option Scheme (continued)
(d) Maximum entitlement of each qualified participant
The maximum number of ordinary shares issued and to be issued upon exercise of share options granted to each
qualified participant (including both exercised and outstanding options) in any 12-month period up to the date of grant
shall not exceed 1% of the ordinary shares of the Company in issue. Any further grant of share options in excess of this
limit is subject to shareholders’ approval in general meeting of the Company.
Share options to be granted to a director or chief executive of the Company or any of their respective associates are
subject to approval by the independent non-executive directors of the Company. In addition, any grant of share options
to an independent non-executive director of the Company or any of their respective associates, when aggregated with
all share options (whether exercised, cancelled or outstanding) already granted to any of them during the 12-month
period up to the date of grant, in excess of 0.1% of the ordinary shares of the Company in issue and with an aggregate
value in excess of HK$5,000,000, is subject to shareholders’ approval in general meeting of the Company.
(e) Timing for exercise of options
In respect of any particular option, the directors may in their absolute discretion determine the period within which an
option may be exercised provided that such period must expire no later than 10 years from the date upon which the
option is deemed to be accepted by the grantee. Option will then lapse to the extent not exercised during the option
period.
(f) Acceptance of offers
An option shall be deemed to have been granted and accepted when the duplicate offer letter comprising acceptance
of the option duly signed by the grantee shall have been received by the Company on or before the last day for
acceptance as set out in the offer letter.
(g) Basis for determination of exercise price
The exercise price must be no less than the highest of: (i) the closing price of the listed ordinary shares on the date
of grant; (ii) the average of the closing prices of the listed ordinary shares of the Company for the 5 trading days
immediately preceding the date of grant; or (iii) the nominal value of the ordinary shares.
(h) Life of the scheme
The New Option Scheme shall be valid and effective for a period of 10 years from April 26, 2002, the date on which it is
deemed to take effect in accordance with its terms.
3. Valuation of share options
The share options granted are not recognized in the financial statements until they are exercised. The directors consider
that it is not appropriate to value the share options on the ground that certain crucial factors for such valuation are variables
which cannot be reasonably determined at this stage. Any valuation of the share options based on speculative assumptions
in respect of such variables would not be meaningful and the results thereof may be misleading to the shareholders. Thus, it
is more appropriate to disclose only the market price and exercise price.
Long-Term Incentive Program
TheCompanyadoptedthelong-termincentiveprogram(“LTIProgram”)onMay26,2005,underwhichtheBoardorthetrusteeof
the program shall select the employees (including but not limited to the directors) of the Group for participation in the program, and
determine the number of shares to be awarded.
Details of the movements in the share options and the share awards for the year ended March 31, 2012 are set out under the
section headed Long-Term Incentive Schemes in the Compensation Committee Report.
Apart from the share option schemes and the LTI Program, at no time during the year ended March 31, 2012 was the Company
or any of its subsidiaries a party to any arrangements to enable the directors of the Company to acquire benefits by means of
acquisitions of shares in, or debentures of, the Company or any body corporate.