Investor Presentaiton
Armour Energy and controlled entities
armourenergy.com.au
Financial report continued
Notes to the consolidated financial statements continued
NOTE 38. SHARE-BASED PAYMENTS
TYPES OF SHARE-BASED PAYMENTS
Employee Share Option Plan (ESOP)
Share options are granted to employees. The employee share option is designed to align participants' interests with those of
shareholders by increasing the value of the Armour Energy Ltd's shares.
When a participant ceases employment prior to the vesting of their share options, the share options are forfeited after 90 days
unless cessation of employment is due to termination for cause, whereupon they are forfeited immediately or death. The Group
prohibits KMP's from entering into arrangements to protect the value of unvested ESOP awards.
The contractual life of each option granted is generally three (3) years. There are no cash settlement alternatives. Each option can
be exercised from vesting date to expiry date for one share with the exercise price payable in cash.
Summary of share-based payment plans
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share based
payment share options granted during the year under the employee share option plan.
For personal uSCOBY
Outstanding at the beginning of the year
Forfeited during the year
Expired during the year
Outstanding and exercisable at the end of the year
2020
WAEP
2020
Number
2019
WAEP
2019
Number
$0.30
17,375,000
$0.29 22,875,000
$0.27 (5,500,000)
$0.28
(10,625,000)
$0.30
17,375,000
$0.33
6,750,000
There were no options issued to employees and Directors under the Armour Energy Employee Share Option Plan during 2020
(2019: NIL). The options outstanding as at 30 June 2020 have a weighted average remaining contractual life of 0.75 years and
exercise price of $0.33.
Other option issues
The following table illustrates the number of, and movements in, other options issued for commercial consideration during the year.
Balance at the start of the year¹
Granted during the year²
Expired during the year
2020
WAEP
30 June
2020
Number
30 June
2019
WAEP
2019
Number
$0.17 43,000,000
$0.01 8,000,000
$0.27 (2,000,000)
$0.20 7,000,000
$0.16 41,000,000
$0.20 (5,000,000)
$0.17 43,000,000
$0.15
49,000,000
The other options outstanding as at 30 June 2020 have a weighted average remaining contractual life of 1.44 years and exercise
price of $0.15.
1 The opening balance of options were issued in two tranches
(i) 2,000,000 unlisted options to take up one ordinary share in Armour Energy Limited at various prices. The options were
granted to MH Carnegie in lieu of any fees for their consent for the issue of further convertible notes, to change redemption
rights and in lieu of the requirement for the Company to issue options for a further MH Carnegie nominee to the Board.
(ii) On 31 July 2018, the Company issued 41,000,000 options to Tribeca Global Resources Credit Master Fund (Tribeca) at an
exercise price of $0.166 per ordinary share (adjusted to $0.161 per ordinary share following the 2018 entitlement issue). The
options were issued as part of the agreement for Tribeca to provide a $6.8 million environmental bonding funding facility (see
the financial liabilities note for further details).
2 Granted this year
Bizzell Capital Partners managed the private placement close on 23 September 2019 and was entitled to receive an
allotment of 8,000,000 unlisted options exercisable at 8 cents through to 30 September 2023. Of the 8 million, 2 million were
subsequently transferred to an unrelated sub-underwriter.
The fair value of these options at grant date was $212,800. This value was calculated using a Black Scholes option pricing
model applying the following inputs:
Number of options
Exercise price
Share price on grant date
Grant date
Expiry date
Volatility
8,000,000
$0.080
$0.056
30/09/2019
30/09/2023
75.493%
0%
Risk-free interest rate
0.78%
Weighted average fair value at grant date
$0.0266
Dividend yield
106
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