2012 Annual Report - ZTE

ZTE CORPORATIONNotes to Financial Statements(Prepared under Hong Kong Financial Reporting Standards)31 December 201241. ISSUED CAPITAL2012 2011RMB’000 RMB’000Restricted sharesDomestic natural person shares 2,537 9,126Senior management shares 8,724 8,33011,261 17,456Unrestricted sharesRMB ordinary shares 2,799,232 2,793,037Overseas listed foreign shares 629,585 629,5853,428,817 3,422,6223,440,078 3,440,07842. SHARE INCENTIVE SCHEMEThe implementation of the Phase I Share Incentive Scheme (Revised Version dated 5 February 2007)(hereinafter referred to as the “Share Incentive Scheme”) commenced upon consideration and approval byshareholders at the first extraordinary general meeting of the Company for 2007 convened on 13 March 2007,after the receipt of a no-comment letter from the China Securities Regulatory Commission (the “CSRC”). TheCompany granted 47,980,000 subject shares to the scheme participants by way of the issue of new shares (Ashares), including the grant to 3,435 scheme participants of the subject share quotas with 43,182,000 shares(accounting for 90% of the subject share quotas under the Share Incentive Scheme, hereinafter referred to asthe “First Award”) and the reservation of 4,798,000 subject shares accounting for 10% of the subject sharequotas under the Share Incentive Scheme. At the Twentieth Meeting of the Fourth Session of the Boardof Directors held on 25 November 2008, the grant of the full amount of the reserved subject share quotasto 794 scheme participants (hereinafter referred to as the “Second Award”) was considered and approved.The scheme participants of the Share Incentive Scheme were the directors and senior management of theCompany and key staff of the Company and its subsidiaries.The grant price of the Share Incentive Scheme shall be the closing price of the Company’s A shares as quotedon the Shenzhen Stock Exchange on the trading day immediately preceding the date of the Board Meetingat which the Share Incentive Scheme is reviewed. The price of the First Award was RMB30.05 per share.Scheme participants shall pay the subscription amounts for the subject shares on the basis of the purchaseof 5.2 subject shares for every 10 subject shares granted, out of which the subscription amounts for 3.8subject shares shall be funded by scheme participants at their own cost and the subscription amounts for1.4 subject shares shall be funded by the conversion of the deferred bonus that scheme participants wouldhave received had they participated in the distribution of 2006 deferred bonus, calculated as a percentageof the grant price. The price of the Second Award was RMB21.28 per share. Scheme participants shall paythe subscription amounts for the subject shares on the basis of the purchase of 5.2 subject shares for every10 subject shares granted.404