Samsung 2007 Annual Report Download - page 117

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23. STOCK OPTION PLAN
SEC has a stock option plan that provides for the granting of stock purchase options to employees r 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:
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 will be fully vested after two years of continuous employment 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:
The compensation expense related to stock options amounted to ￦780 million for the year ended December 31, 2007. No
compensation expense was estimated for future periods.
As of December 31, 2007, 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. The compensation expense recognized by
Samsung Card Co., Ltd. was ￦2,237 million for the year ended December 31, 2006. The stock options of ￦1,231 million according to
SEC’s ownership ratio are included in a separate component of shareholders’ equity as other capital adjustments.
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 4 years 4 years 3 years 3 years 3 years 3 years 3 years 3 years
Expected
dividend yield 0.39% 0.89% 0.73% 0.74% 1.25% 0.73% 0.99% 1.14%
22. TREASURY STOCK
SEC purchases its own common shares and non-voting preferred shares at market price for stock price stabilization. As of December
31, 2007, SEC holds 20,872,261 common shares with acquisition cost of ￦8,535,649 million, and 2,979,693 preferred shares
with acquisition cost of ￦621,843 million, as treasury stock recorded as capital adjustment. As of December 31, 2006, SEC held
18,540,684 common shares with acquisition cost of ￦7,078,265 million, and 2,579,693 preferred shares with acquisition cost of
￦441,758 million. SEC is planning to use the treasury stock for stock options in the future.
Quantity net of
forfeitures and
exercises 769,356 1,102,704 530,319 82,682 200,122 548,549 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 2 3~10 years 3~10 years 2~10 years 2~10 years 2~10 years 2~10 years 2~4 years 2~10 years
Date of the Grant
March March February March March April October December
16, 2000 9, 2001 28, 2002 25, 2002 7, 2003 16, 2004 15, 2004 20, 2005
Date of the Grant
March March February March March April October December
16, 2000 9, 2001 28, 2002 25, 2002 7, 2003 16, 2004 15, 2004 20, 2005