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FLEXIGROUP LIMITED FINANCIAL REPORT 2011
Fair value of options, performance rights and deferred shares granted
Fair values at grant date are independently determined using a binomial tree option pricing methodology that takes into
account the exercise price, the term of the options, performance rights and deferred shares, the impact of dilution, the
share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free
interest rate for the term of the options.
The model inputs for performance rights and deferred shares granted during the year ended 30 June 2011 included:
a) Exercise price: various per performance rights and deferred shares granted
b) Grant date: various per performance rights and deferred shares granted
c) Expiry date: various per performance rights and deferred shares granted
d) Share price at grant date: various per performance rights and deferred shares granted
e) Expected price volatility of the Company’s shares: 40% (2010: 60%)
f) Expected dividend yield: 5.0% – 5.5% (2010: 5.0%)
g) Risk-free interest rate: 4.38% – 4.97% (2010: 5.03%)
Shares provided on exercise of remuneration options
No ordinary shares in the Company were issued as a result of the exercise of any remuneration options.
b. Employee share plan
The Employee Share Acquisition (Tax Exempt) Plan (“ESAP”) is a general employee share plan pursuant to which grants of
shares may be ofered to employees of FlexiGroup on terms and conditions as determined by the Board from time to time.
The Board is responsible for administering the ESAP in accordance with the ESAP Rules and the terms and conditions of
specifc grants of shares to participants in the ESAP. The ESAP Rules include the following provisions:
Eligibility
The Board may determine which persons will be eligible to be ofered the opportunity to participate in the ESAP from time
to time. The Board may make ofers to eligible persons for participation in the ESAP.
Terms of ofer
The Board has the discretion to determine the specifc terms and conditions applying to each ofer, provided that:
The terms of the ofer do not vary the disposal restrictions imposed on shares under the ESAP Rules under which shares
acquired under the ESAP cannot be transferred, sold or otherwise disposed of until the earlier of:
• The time when the participant is no longer employed by FlexiGroup or by the Company that was the employer of the
participant as at the time the shares were acquired, or
• The third anniversary of the date on which the shares were acquired, and
• The ofer does not include any provisions for forfeiture of shares acquired under the ESAP in any circumstances
It is intended that the ESAP will satisfy the requirements of Division 13A of the relevant Australian Tax Legislation.
Consideration for grant
The Board may determine the price at which the shares will be ofered to an employee. Shares may be granted at no cost
to the employee or the Board may determine that market value or some other price is appropriate.
Allocation of shares
Shares allocated under the ESAP may be existing shares or newly issued shares. Allocated shares must be held in the name
of the employee. Any shares that are issued under the ESAP will rank equally with those traded on the ASX at the time of
issue.
A participant under the ESAP is entitled to receive distributions/dividends made in respect of, and exercise voting rights
attaching to, shares held under the ESAP (whether or not the shares are subject to disposal restrictions).
Restrictions on shares
Shares acquired under the ESAP will be subject to the disposal restrictions described above. FlexiGroup will implement
such arrangements (including a holding lock) as it determines are necessary to enforce this restriction.
Once the restriction is removed, and subject to FlexiGroup’s Share Trading Policy, shares acquired under the ESAP may
be dealt with freely. Details of FlexiGroup’s Share Trading Policy are in the Corporate Governance Statement.