Vtech 2004 Annual Report Download - page 44

42
Notes to the
Financial Statements
VTech Holdings Ltd Annual Report 2004
(ii) HomeRelay Plan Pursuant to the stock option plan
adopted by a subsidiary, HomeRelay Communications, Inc.
(“HomeRelay”) in August 2000 (the “HomeRelay Plan”), the
directors of HomeRelay may grant options to the employees of
HomeRelay up to 10% of HomeRelay’s common stock in issue from
time to time for incentive purposes. Options for common stock
may be incentive stock options or non-statutory stock options. A
committee designated by the directors of HomeRelay may fix the
terms and vesting of all stock options; however, in no event will
the contractual term exceed 10 years. Unless specified otherwise,
stock options vest 25% one year from the grant date and the
remaining 75% vest in successive equal semi-annual instalments
over the succeeding three year period until the stock options are
fully vested. The HomeRelay Plan has a life of 10 years and will
expire on 29th August 2010.
No stock option may be granted to any employee if it would result
in the total amount of stock option to be issued or already issued
to him under the HomeRelay Plan exceeding 25% of the maximum
aggregate amount of stock subject to the HomeRelay Plan. The
exercise price under the HomeRelay Plan will be as follows: (i)
incentive stock options — an amount equal to not less than 100%
of the Fair Market Value (as defined in the HomeRelay Plan) of the
stock at the date of grant; (ii) non-statutory stock options - an
amount equal to not less than 85% of the Fair Market Value of the
stock at the date of grant; and (iii) incentive stock options to 10%
Employees (as defined in the HomeRelay Plan) — an amount equal
to not less than 110% of the Fair Market Value of the stock at the
date of grant.
18 SHARE CAPITAL, SHARE OPTIONS AND WARRANTS (continued)
Share options (continued)
Number of Number of Number of Balance
Balance in share options share options share options in issue
Exercise issue at granted exercised lapsed at 31st March
Date of grant price Exercisable period 1st April 2003 during the year during the year during the year 2004
(Note 1) (Note 2) (Note 3) (Note 4)
26th February 2002 to HK$10.2 26th February 2005 15,430,000 —(100,000) (970,000) 14,360,000
26th March 2002 to 25th March 2007
10th July 2002 to HK$8.71 10th July 2005 1,720,000 ——(380,000)
1,340,000
8th August 2002 to 7th August 2007
17,150,000 —(100,000) (1,350,000) 15,700,000
Note 1: Due to the large number of employees participating in the 2001 Scheme, the information can only be shown within a reasonable range in this Annual Report. For options granted to
employees, the options were granted during the underlying periods for acceptance of the offer of such options by the employees concerned.
Note 2: As one of the conditions of grant, the employees concerned agreed with the Company that the options shall not be exercisable within the period of 36 months from the date on
which such options were accepted and shall not be exercisable after 60 months from the date on which such options were accepted. However, options shall be automatically vested
to the grantees when the grantees reach 60 years of age.
Note 3: Following the exercise of 100,000 options in March 2004, 100,000 new ordinary shares were issued and allotted in April 2004. The closing price of the Company’s shares traded on
The Stock Exchange of Hong Kong Limited on 11th March 2004 (being the date immediately before the date on which options were exercised) was HK$13.3.
Note 4: No options were cancelled during the year.
Note 5: In April 2004, the Company granted 2,670,000 options to certain employees of the Company and its subsidiaries pursuant to the 2001 Scheme to subscribe for an aggregate of
2,670,000 ordinary shares of the Company at a price of HK$15.0 per ordinary share.