The consolidated entity has an Employee Incentive Option Plan for employees of the Company. In accordance with the provisions of the scheme, as approved by shareholders in general meeting during the year, employees may be entitled to participate in the scheme at the sole discretion of the directors.
Each option issued under the scheme converts into one ordinary share of Rockeby biomed Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option and the options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The number of options granted is at the sole discretion of the directors subject to the total number of outstanding options being issued under the Scheme at any one time not exceeding 5% of the Company’s issued share capital.
The exercise price is calculated with reference to a formula contained within the Scheme Rules which was approved by shareholders at a previous general meeting and which rewards employees against the extent of the Company’s performance on the capital markets. Where appropriate the directors have established vesting conditions as appropriate to the particular employee being granted options.
The options are for varying periods but expire immediately on the dismissal, resignation or termination of the employee unless the directors resolve otherwise.
Incentive options issued to directors (executive and non-executive) are not issued under the Employee Incentive Option Plan but are subject to approval by shareholders and attach vesting conditions as appropriate.
The following share-based payment arrangements were in existence during the period:
The fair value of the share options granted during the fi nancial year under share based payments arrangements is $236,450 (2005: $41,371). Options were priced using a Black and Scholes model. The expected life used in the model has not been adjusted. Expected volatility is based on the movement of the underlying share price around its average price over the expected term of the option. No allowance has been made for the effects of early exercise.
Balance at end of the financial year
The share options outstanding and exercisable at the end of the fi nancial year had an exercise price of 3.88 cents and a weighted average remaining contractual life of 2.5 years.
