Samsung 2006 Annual Report Download - page 120

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110
¹ The exercise price can be adjusted in the case of the issuance of new shares, stock dividends, stock splits, or stock mergers.
² The options can be fully vested after two years from the date of grant.
The fair value of each option grant was estimated using the Black-Scholes option-pricing model based on the date of the grant using the
following assumptions:
Date of the Grant
March
16, 2000
March
9, 2001
February
28, 2002
March
25, 2002
March
7, 2003
April
16, 2004
October
15, 2004
December
20, 2005
Risk-free interest rates 9.08% 6.04% 5.71% 6.44% 4.62% 4.60% 3.56% 4.95%
Expected stock price volatility 69.48% 74.46% 64.97% 64.90% 60.08% 43.09% 42.46% 32.71%
Expected life 4years 4years 3years 3years 3years 3years 3years 3years
Expected dividend yield 0.39% 0.89% 0.73% 0.74% 1.25% 0.73% 0.99% 1.14%
The compensation expense related to stock options amounted
to \16,470 million for the year ended December 31, 2006, and is
estimated to be \780 million in total for future periods.
As of December 31, 2006, Samsung Card Co,. Ltd., a domestic
subsidiary, has granted 120,472 shares including 45,472 shares,
which had been granted by Samsung Capital Co., Ltd. as part of
the merger in 2004. However, 602,395 shares in stock options,
which were granted as of December 31, 2005, were adjusted to
reflect issuance of new shares of five to one so that the number of
shares granted is decreased and exercise price is increased. The
compensation expense recognized by Samsung Card Co., Ltd.
was \2 million for the year ended December 31, 2005. The stock
options of \1,231 million according to the SEC’s ownership ratio
are included in a separate component of shareholders’ equity as
other capital adjustments.
Note 25 : Stock Option Plan
SEC has a stock option plan that provides for the granting of stock purchase options to employees or directors who have contributed or
are expected to contribute to the management and technological innovation of SEC.
A summary of the terms of stock options granted is as follows:
Date of the Grant
March
16,2000
March
9, 2001
February
28, 2002
March
25, 2002
March
7, 2003
April
16, 2004
October
15, 2004
December
20, 2005
Quantity net of forfeitures and exercises 918,656 1,032,600 596,578 84,982 250,790 560,649 7,200 10,000
Exercise price ¹\272,700 \197,100 \329,200 \342,800 \288,800 \580,300 \460,500 \606,700
Exercise period from the date of the grant ²3~10years 3~10years 2~10years 2~10years 2~10years 2~10years 2~4years 2~10years