Page 72 - Bauxite Resources Annual Report 2013

Notes to the Financial Statements cont.
27. SHARE-BASED PAYMENTS
Director Options and the Employees and Contractors Option Plan
The Company provides benefits to employees and contractors of the Company in the form of share-based payment transactions,
whereby employees and contractors render services in exchange for options to acquire ordinary shares.
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share of the
Company with full dividend and voting rights.
Set out below are summaries of the options granted:
Consolidated Group
2013 2012
Number of
options
Weighted
average exercise
price cents
Number of
options
Weighted
average exercise
price cents
Outstanding at the beginning of the year 6,000,000 36.7 18,195,000 42.9
Granted - - 1,000,000 20.0
Forfeited/cancelled/expired (4,000,000) 23.33 (13,195,000) 20.4
Exercised - - - -
Outstanding at year-end 2,000,000 40 6,000,000 36.7
Exercisable at year-end 2,000,000 40 3,000,000 40.0
The weighted average remaining contractual life of share options outstanding at the end of the financial year was 2.65 years (2012: 3.78 years), with
exercise prices of 40 cents.
The weighted average fair value of option granted during last year was 2.28 cents. No options were granted during this year. The weighted average
fair value of performance rights granted during the year was Nil. The price was calculated by using the Black-Scholes European Option Pricing Model
incorporating a Monte Carlo simulation applying the following inputs:
Consolidated Group
2013 2012
Weighted average exercise price (cents) - 20.00
Weighted average life of the option (years) 0.77&1.77 4.85
Weighted average underlying share price (cents) 14.00 14.00
Expected share price volatility 90% 74%
Weighted average risk free interest rate 3.01% 4.25%
Historical volatility has been used as the basis for determining expected share price volatility as it assumed that this is indicative of future trends,
which may not eventuate.
The life of the options is based on historical exercise patterns, which may not eventuate in the future.
2013
$
2012
$
Options issued to directors, employees and contractors - 337,805
2013
$
2012
$
Performance rights awarded to directors, employees & contractors 1,500,000 -
1,000,000 rights to be issued if BAU’s market capitalisation trades above A$50m for 30 consecutive days prior to 31 December 2013.
A further 500,000 rights to be issued if BAU’s market capitalisation trades above A$72.5m for 60 consecutive days prior to 31 December 2014.
70 Bauxite Resources Annual Report 2013