Annual Report 2015
FINANCIAL SECTION
153
14 STAFF COSTS
(continued)
(b) Share options
(continued)
Notes: (continued)
(iii) The share option scheme of NWSH, which was adopted on 21 November 2011, will be valid and effective for a period
of ten years from the date of adoption. The Board of NWSH may, at their discretion, grant options to any eligible
participant as defined under the scheme to subscribe for the shares of NWSH. The total number of shares which may
be issued upon exercise of all options to be granted under the scheme must not in aggregate exceed 10% of the share
capital of NWSH in issue as at 21 November 2011, i.e. 3,388,900,598 shares.
On 9 March 2015, 55,470,000 share options were granted to directors and certain eligible participants at the exercise
price of HK$14.160, which represents the average closing price of NWSH’s shares in the daily quotations sheets of
the Stock Exchange for the five trading days immediately preceding 9 March 2015. Such share options will expire on 8
March 2020.
The fair value of the share options granted during the year with exercise price per share of HK$14.160 (subsequently
being adjusted to HK$14.158) is estimated at approximately HK$2.2563 per share, using the Binomial pricing model.
Values are appraised based on the risk-free rate of 1.29% per annum with reference to the rate prevailing on the Hong
Kong government bond, an approximately five-year period historical volatility of 30%, assuming dividend yield of 5.34%
per annum and an expected option life of five years.
Pursuant to the scheme, the number of unexercised share options and exercise price may be subject to adjustment
in case of alteration in the capital structure of NWSH. NWSH declared the interim dividend for the six months ended
31 December 2014 in scrip form (with cash option) during the year which gave rise to adjustments to the number of
unexercised share options and the exercise price in accordance with the scheme. The exercise price per share for the
share options granted on 9 March 2015 was adjusted to HK$14.158 with effect from 19 May 2015.
The share options will be vested according to the scheme and the terms of grant provided that for the vesting to occur
the grantee has to remain as an eligible participant on such vesting date.
(iv) The Binomial pricing model requires input of subjective assumptions such as the expected stock price volatility.
Change in the subjective input may materially affect the fair value estimates.
