2012 Annual Report - ZTE

ZTE CORPORATIONNotes to Financial Statements (continued)(Prepared in accordance with PRC ASBEs)(All amounts in RMB’000 unless otherwise stated)(English translation for reference only)VII.SHARE-BASED PAYMENT (continued)2. Share incentive scheme (continued)The proposals of profit distribution and capitalisation from capital reserve for 2007 were implementedon 10 July 2008, whereby 4 shares were issued for every 10 shares held. The proposals of profitdistribution and capitalisation from capital reserve for 2008 were implemented on 5 June 2009, whereby3 shares were issued for every 10 shares held. As a result, the Subject Share quotas of the ShareIncentive Scheme for the current period was adjusted to 87,323,600 shares accordingly, representing theadjustments of the Subject Share quotas under the First Award and the Second Award to 78,591,240shares and 8,732,360 shares, respectively. Taking into consideration the departure of or waiver ofparticipation in the Share Incentive Scheme by certain Scheme Participants, it was ratified at the TwentysixthMeeting of the Fourth Session of the Board of Directors of the Company held on 6 July 2009 thata total Subject Share quota of 85,050,238 shares had been granted to 4,022 Scheme Participants underthe Share Incentive Scheme, and the registration of such shares with China Securities Depository andClearing Company Limited, Shenzhen Branch was completed in July 2009. The total number of issuedshare capital of the Company has increased by 85,006,813 shares, after deducting 43,425 SubjectShares which have lapsed.In accordance with the Share Incentive Scheme, Subject Shares under the First Award shall be subjectto a lock-up period of two years commencing on 13 March 2007 (the date on which the Share IncentiveScheme was approved by the shareholders in a general meeting of the Company). As at 12 March 2009,the lock-up period for Subject Shares under the First Award had expired and the unlocking conditionshad been fulfilled. As at 25 November 2010, the lock-up period of Subject Shares under the SecondAward had expired and conditions for the unlocking of such share had been fulfilled. As at 31 December2012, the Subject Shares under the Phase I Share Incentive Scheme of the Company which had fulfilledconditions precedent to the unlocking was completely unlocked. For details of the unlocking of SubjectShares, please refer to Note V.36.270