LPL » Topics » (in Korean won)

This excerpt taken from the LPL 6-K filed May 15, 2006.

(in Korean won)

 

     Weighted-average
exercise price
   Number of shares
under option
  

Weighted average
remaining
contractual life

(in years)

Balance at December 31, 2005

   (Won) 44,050    410,000    —  

Options granted

     —      —     

Options exercised

     —      —     

Options canceled/expired

     —      —     
          

Balance at March 31, 2006

   (Won) 44,050    410,000    6
          

Exercisable at March 31, 2006

   (Won) —      —      —  
          

In connection with the adoption of SFAS 123(R), the company assessed its valuation technique and related assumptions. The company estimates the fair value of stock options using a Black-Scholes valuation model, consistent with the provisions of SFAS 123(R) and Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 107. Key input assumptions used to estimate the fair value of stock options include the grant price of the award, the expected option term, volatility of the company’s stock, the risk-free rate and the company’s dividend yield. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by selected managements who receive SARs, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the company under SFAS 123(R).

The fair value of SARs was estimated using a Black-Scholes valuation model with the following assumptions:

 

     March 31, 2006

Option term (years) 1

   5

Volatility 2

   39.92%

Risk-free interest rate (Korean government bond)

   5.13%

Dividend yield

   0%

Weighted average fair value per option granted

   (Won)18,779

1 The option term is the number of years that the company estimates that options will be outstanding prior to settlement.
2 Measured using historical weekly price changes of the Company’s stock over the respective term of the option.

 

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