Letter To Shareholders - Mitac

(c) The Company assumed the employee stock options issued by Tyan as a result of
the merger. The Company estimated the fair value of stock options as of grant
date under Black-Scholes option model except the grant date of September 26,
2007 was under Binomial option model. The factor’s weighted average
information and fair value are listed as follows:
Grant date
August 31,
2005
Grant date
March 10,
2006
Dividend yield rate 0% 0%
Expected price volatility 50.00% 50.00%
Risk-free interest rate 2% 2.00%
Expected vesting period 6 years 6 years
Options granted (in shares) 3,422,000 667,000
Weighted-average fair value per
share (in dollars)
12.44 12.46
Grant date
June 30, 2006
Grant date
March 19,
2007
Dividend yield rate 0% 0%
Expected price volatility 50.00% 75.00%
Risk-free interest rate 2.00% 2.00%
Expected vesting period 6 years 6 years
Options granted (in shares) 510,000 897,000
Weighted-average fair value per
share (in dollars)
12.78 10.78
Grant date
September 26,
2007
Dividend yield rate 0%
Expected price volatility 27.78%
Risk-free interest rate 2.52%
Expected vesting period
4.375 years
Options granted (in shares) 1,569,000
Weighted-average fair value per
4.68
share (in dollars)
I. For the stock options granted after January 1, 2008 with the compensation cost
accounted for using the fair value method, their fair value on the grant date is
estimated using Black-Scholes option-pricing model. The weighted-average
parameters used in the estimation of the fair value are as follows:
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