NewWorld Development Company Limited
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REPORT OF THE DIRECTORS
DIRECTORS’ INTERESTS IN SHARES, UNDERLYING SHARES AND DEBENTURES
(continued)
(B) Long position in underlying shares – share options
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Share Option Scheme of the Company
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Share options granted to other eligible participants
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The fair value of the share options granted during the year is estimated at HK$1.78 per share using the Binomial
pricing model. Value is estimated based on the risk-free rate of 1.026% per annum with reference to the market
yield rates of the Hong Kong government bond (maturing 10 December 2018) as of the value date, a historical
volatility of 31.726% calculated based on the historical price with period equals to the life of the options, assuming
dividend yield of 3.82% based on the average dividend yield in the past five years and an expected option life of
four years.
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.
Share Option Schemes of New World China Land Limited (“NWCL”)
On 26 November 2002, NWCL adopted a share option scheme (“NWCL 2002 Share Option Scheme”) pursuant
to which employees, including directors of NWCL and its subsidiaries (“NWCL Group”), were given opportunity
to obtain equity holdings in NWCL. In anticipation of the expiry of the NWCL 2002 Share Option Scheme, NWCL
adopted a new share option scheme (“NWCL 2011 Share Option Scheme”) at the annual general meeting of
NWCL held on 22 November 2011 and terminated the operation of the NWCL 2002 Share Option Scheme. Any
share options which were granted under the NWCL 2002 Share Option Scheme prior to such termination shall
continue to be valid and exercisable in accordance with the rules of the NWCL 2002 Share Option Scheme.
A summary of share option schemes of NWCL disclosed in accordance with the Listing Rules is as follows:
NWCL 2002 Share Option Scheme and
NWCL 2011 Share Option Scheme
Purpose of the schemes
To provide an opportunity for the full-time or part-time employees,
including directors, of NWCL Group to participate in the equity of
NWCL as well as to motivate them to optimise their performance.
Participants of the schemes
Full-time or part-time employees, including directors, of NWCL
Group.
Total number of shares available for issue
under the schemes and percentage of
issued share capital of NWCL as at the
date of this annual report
NWCL had granted share options representing the rights to
subscribe for 96,226,400 shares of NWCL under the NWCL 2002
Share Option Scheme up to the date of this report, together with
share options representing 6,465,900 shares, 5,357,008 shares and
2,029,087 shares by way of adjustment on the number of share
options as a result of NWCL’s issue of rights shares which became
unconditional on 8 April 2005, 16 November 2009 and 22 December
2011, respectively. No further share options will be granted under
the NWCL 2002 Share Option Scheme.
NWCL had granted share options representing the rights to
subscribe for 41,682,100 shares under the NWCL 2011 Share
Option Scheme up to the date of this report. NWCL may further
grant share options to subscribe for 537,812,151 shares of NWCL,
representing approximately 6.19% of NWCL’s total issued share
capital as at the date of this report.
Maximum entitlement of each participant
under the schemes
The total number of shares issued and to be issued upon exercise
of the options granted to each participant (including both exercised,
cancelled and outstanding options) in any 12-month period must not
exceed 1.0% of the shares in issue unless the same is approved by
NWCL’s shareholders in general meeting.
