Vtech 2004 Annual Report Download - page 43

41
Notes to the
Financial Statements
VTech Holdings Ltd Annual Report 2004
18 SHARE CAPITAL, SHARE OPTIONS AND WARRANTS
Share capital
2004 2003
US$ million US$ million
Authorised
Ordinary shares:
400,000,000 (2003 : 400,000,000)
of US$0.05 each
20.0 20.0
2004 2003
Number of shares US$ million US$ million
Issued and fully paid
Ordinary shares of
US$0.05 each:
Beginning of year and
end of year (Note 1) 225,527,133
11.3 11.3
Note 1: In April 2004, the issued and paid up share capital of the Company was increased
by 100,000 ordinary shares to 225,627,133 ordinary shares upon the exercise of
100,000 share options by a grantee in March 2004.
Share options
(i) The 2001 Scheme
Pursuant to the share option scheme
adopted on 10th August 2001 (the “2001 Scheme”), the directors
are authorised, 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 or 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.
Pursuant to the Chapter 17 of the Listing Rules, the Company can
issue options so that the number of shares that may be issued
upon exercise of all options to be granted under 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 must be accepted within 30 days from
the date of offer, upon payment of a non-refundable sum of
HK$1.0 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 on
which an offer is made, 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 on which an offer is
made; 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 date
immediately before the date on which options were granted) was
HK$9.70 and on 9th July 2002 (being the date immediately before
the date on which options were 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 of speculative assumptions. Accordingly, the
directors believe that any calculation of the value of options will
not be meaningful and may be misleading to shareholders.
As at 31st March 2004, the number of shares issuable under the
options granted pursuant to the 2001 Scheme was 15,700,000,
which represented approximately 7% of the issued share capital of
the Company. The movements in the number of share options
under the 2001 Scheme during the year were as follows: