Lenovo 2013 Annual Report Download - page 171

2012/13 Annual Report Lenovo Group Limited 169
30 Share capital (continued)
(a) Long-term incentive program (continued)
Movements in the number of units of award granted during the year and their related weighted average fair values are
as follows:
Number of units
SARs RSUs
Outstanding at April 1, 2011 263,892,486 189,830,840
Granted during the year 65,914,897 81,294,699
Vested during the year (119,792,862) (71,466,078)
Lapsed/cancelled during the year (37,920,363) (23,595,385)
Outstanding at March 31, 2012 172,094,158 176,064,076
Outstanding at April 1, 2012 172,094,158 176,064,076
Granted during the year 82,786,156 80,087,089
Vested during the year (82,021,317) (81,848,623)
Lapsed/cancelled during the year (8,446,562) (3,896,006)
Outstanding at March 31, 2013 164,412,435 170,406,536
Average fair value per unit (HK$)
– At March 31, 2012 3.49 4.89
– At March 31, 2013 2.37 6.50
The fair values of the SARs awarded under the long-term incentive program were calculated by applying a Black-
Scholes pricing model. For the year ended March 31, 2013, the model inputs were the fair value (i.e. market value)
of the Company’s shares at the grant date, taking into account the expected volatility of 39.47 percent (2012: 55.23
percent), expected dividends during the vesting periods of 2.25 percent (2012: 1.84 percent), contractual life of 4.75
years (2012: 4.75 years), and a risk-free interest rate of 0.24 percent (2012: 0.57 percent).
The remaining vesting periods of the awards under the long-term incentive program as at March 31, 2013 ranged from
0.08 to 3.92 years (2012: 0.08 to 3.92 years).
(b) Share options
Under the Company’s employee share option scheme adopted on January 18, 1994 (“Old Option Scheme”), the
Company granted options to employees (including directors) of the Company or its subsidiaries to subscribe for ordinary
shares in the Company, subject to a maximum of 10 percent of the issued share capital of the Company from time to
time. Options granted are exercisable at any time during a period of ten years from the date upon which the option is
accepted. The subscription price of the option shares is the higher of the nominal value of the ordinary shares and an
amount which is 80 percent of the average of the closing prices of the listed ordinary shares on the five trading days
immediately preceding the date on which the offer is made. The Old Option Scheme was terminated on April 26, 2002.
On March 25, 2002, an ordinary resolution approving the adoption of a new share option scheme (“New Option
Scheme”) was passed by shareholders at an extraordinary general meeting of the Company.
Under the New Option Scheme, the Company may grant options to qualified participants as defined in the New Option
Scheme to subscribe for ordinary shares in the Company, subject to a maximum of 10 percent of the issued share
capital of the Company as at the date of adoption of the New Option Scheme. Options granted are exercisable at any
time during a period of ten years from the date upon which the option is accepted. The subscription price of the option
shares is the highest of the closing price of the listed ordinary shares on the date of grant; the average of the closing
prices of the listed ordinary shares for the five trading days immediately preceding the date of grant; and the nominal
value of the ordinary shares.
The New Option Scheme was expired on April 26, 2012, and no further options could thereafter be granted under the
New Option Scheme. However, all remaining provisions will remain in full force and effect to govern the exercise of all
the options granted under the New Option Scheme prior to its expiration.