Vtech 2003 Annual Report Download - page 46

VTech Holdings Ltd44
Notes to the Financial Statements
20. SHARE CAPITAL, SHARE OPTIONS AND WARRANTS (continued)
The maximum number of shares on which options may be
granted may not exceed 10% of the issued share capital of the
Company from time to time. The maximum number of shares in
respect of which options may be granted under the 1991 Scheme
to any one participant (including shares issued and issuable to
him under all the options previously granted to him) is limited to
25% of the maximum aggregate number of shares of the
Company subject to the 1991 Scheme. The offer of a grant of
options may be accepted within 28 days from the date of offer,
upon payment of a nominal consideration of HK$1.0 in total by
the grantee. The exercise price in relation to each option offer
shall be determined by the directors at their absolute discretion,
but in any event shall not be less than the greater of (i) 80% of
the average of the official closing price of the shares on the
London Stock Exchange plc and The Stock Exchange of Hong
Number of Number of Number of
Balance in share options share options share options Balance in
issue at granted exercised lapsed/cancelled issue at
Date of grant Exercise price Exercisable period 1st April 2002 during the year during the year during the year 31st March 2003
1st May 1998 US$2.9 1st May 1998 190,000 — — (190,000 ) —
to 30th April 2008
17th December 1999 US$2.3 17th December 1999 80,000 — — (80,000 ) —
to 16th December 2009
270,000 — — (270,000 ) —
Kong Limited for the five trading days immediately preceding the
relevant offer date and (ii) the nominal value of the shares. The
terms of the 1991 Scheme provide that an option may be
exercised at any time during the period beginning with the
commencement date (being the first anniversary of the date of
grant of the option) and ending with the date which is 10 years
after the date of grant of the option and in the first 48 months
following the commencement date, a grantee may only exercise
to the extent of 25% of shares comprised in the options granted
to him in any 12 month period. The 1991 Scheme expired on 23rd
September 2001. Options granted and not yet exercised under
the 1991 Scheme will continue to remain effective.
As at 31st March 2003, all options granted pursuant to the 1991
Scheme have lapsed. The movements in the number of share
options under the 1991 Scheme during the year were as follows:
The 2001 Scheme Pursuant to the share option scheme adopted
on 10th August 2001 (the “2001 Scheme”), the directors are
authorized, at any time during the 10 years from the date of
approval of the 2001 Scheme, to grant options to certain
employees of the Company and subsidiaries of the Group,
including executive directors (but excluding non-executive
directors) to subscribe for shares in the Company at prices to be
determined by the directors in accordance with the terms of the
2001 Scheme. On 1st September 2001, Chapter 17 of the Rules
Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited (the “Listing Rules”) was amended whereby if
the Company wishes to grant options under the 2001 Scheme on
or after 1st September 2001, it must comply with the new
requirements set out therein.
Pursuant to the Listing Rules, the Company can issue options so
that number of shares that may be issued upon exercise of all
options to be granted under all the schemes does not in aggregate
exceed 10% of the relevant class of shares in issue from time to
time. The Company may renew this limit at any time, subject to
shareholders’ approval and the issue of a circular. The Company
may also seek separate shareholders’ approval for granting options
beyond the 10% limit to eligible employees specifically identified
by the Company, subject to shareholders’ approval and the issue of
a circular. The Company can issue options so that shares to be
issued upon exercise of all outstanding options does not exceed
30% of the relevant class of shares in issue from time to time. The
maximum entitlement for any one eligible employee is that the
total number of shares issued and to be issued upon exercise of
options granted and to be granted in any 12-month period up to
the date of the last grant does not exceed 1% of the relevant class
of shares in issue. The Company can grant further options in excess
of this limit, subject to shareholders’ approval (with that eligible
employee and his associates abstaining from voting) and the issue
of a circular. The offer of a grant of options may be accepted within
30 days from the date of offer, upon payment of a nominal
consideration of HK$1.0 in total by the grantee. The 2001 Scheme
has a life of 10 years and will expire on 9th August 2011.
Pursuant to the Listing Rules, the subscription price payable for
each share under the 2001 Scheme shall be at least the highest
of (i) the closing price of the shares as stated in the daily
quotation sheets of The Stock Exchange of Hong Kong Limited on
the date of grant, which must be a business day; and (ii) the
average closing price of the shares as stated in the daily
quotation sheets of The Stock Exchange of Hong Kong Limited
for the five business days immediately preceding the date of
grant; and (iii) the par value of the shares. The closing price of the
Company’s shares traded on The Stock Exchange of Hong Kong
Limited respectively on 25th February 2002 (being the day
immediately before the date on which options were granted or
deemed to be granted) was HK$9.7 and on 9th July 2002 (being
the day immediately before the date on which options were
granted or deemed to be granted) was HK$8.55.
The directors are of the view that value of options granted during
the period depends on a number of variables which are either
difficult to ascertain or can only be ascertained subject to a
number of theoretical basis and speculative assumptions.
Accordingly, the directors believed that any calculation of the
value of options will not be meaningful and may be misleading
to shareholders in the circumstances.