Lenovo 2013 Annual Report Download - page 104

DIRECTORS’ REPORT
Lenovo Group Limited 2012/13 Annual Report
102
Directors’ Rights to Acquire Shares or Debentures (continued)
Share Option Scheme (continued)
1. 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 Company’s ordinary shares as stated
in the Stock Exchange’s daily quotation sheet on the date of grant of the share options; (ii)) the average of the closing
prices of the Company’s ordinary shares as stated in the Stock Exchange’s daily quotation sheets for the 5 trading days
immediately preceding the date of the 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.
2. 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 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, 2013 are set out under the
section headed “Long-Term Incentive Schemes” in the Compensation Committee Report.
Save as disclosed in the sections headed “Directors’ Interests”, “Share Option Scheme and “Long-Term Incentive Program” of this
report, and “Long-Term Incentive Program” of the Compensation Committee Report, at no time during the year ended March 31,
2013 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.