Annual Report 2016
97
Report of the Directors
Directors’ Interests in Shares, Underlying Shares and Debentures
(continued)
(B) Long Position in Underlying Shares — Share Options
(continued)
Share Option Scheme of the Company
(continued)
Share options granted to other eligible participants
(continued)
The fair values of the share options granted during the year with exercise prices per share of HK$9.966, HK$7.200 and
HK$7.540 are estimated at HK$1.574, HK$1.042 and HK$0.966 per share respectively using the Binomial pricing model.
Values are estimated based on the risk-free rate ranging from 0.709% to 1.027% per annum with reference to the market
yield rates of the Hong Kong government bond (maturing 30 September 2019 and 22 June 2020) as of the value date, a
historical volatility ranging from 26.00% to 30.98% calculated based on the historical price with period equals to the life of
the options, assuming dividend yield ranging from 3.82% to 4.26% based on the average dividend yield in the past four to
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
shares 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. No further share options will be granted under the
NWCL 2011 Share Option Scheme.
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.
The period within which the shares must be
taken up under an option
At any time during a period to be notified by NWCL’s directors, which
period not to exceed five years commencing on the expiry of one month
after the date on which the option is accepted and expiring on a date not
later than the last day of the five-year period.
