Cue Energy Resources Limited Directors' report 30 June 2023 20 (D) Equity based remuneration Overview of share options The Board in their meeting held on 24 June 2019 approved the Employee Share Option Plan ('ESOP'), which was subsequently approved by shareholders at 2019 Annual General Meeting. The ESOP has been developed to provide the greatest possible flexibility in choice to the Board in implementing the executive incentive schemes. The ESOP enables the Board to offer employees a number of Options. A summary of material terms of the ESOP is set out as follows: ● the ESOP sets out the framework for the offer of Options by the Company, and is typical for an ESOP; ● in making its decision to issue Options, the Board may decide the number of securities and the vesting conditions which are to apply in respect of the securities. The Board has flexibility to issue Options having regard to a range of potential vesting criteria and conditions; ● in certain circumstances, unvested Options will immediately lapse and any unvested Shares held by the participant will be forfeited if the relevant person is a “bad leaver” as distinct from a “good leaver”. Unless the Board determines otherwise at its sole discretion, Options held by good leavers will expire upon cessation of employment; ● if a participant acts fraudulently or dishonestly or is in breach of their obligations to the Company or its subsidiaries, the Board may determine that any unvested Options held by the participant immediately lapse and that any unvested Shares held by the participant be forfeited; ● in certain circumstances Options can vest early upon a change of control event as defined under the Plan rules; ● the total number of Options and Shares which may be offered by the Company under these Rules shall not at any time exceed 5% of the Company's total issued Shares when aggregated with the number of Options and Shares issued or that may be issued as a result of offers made at any time during the previous three year period under an employee incentive scheme; ● the Board has discretion to impose restrictions (except to the extent prohibited by law or the ASX Listing Rules) on Shares issued or transferred to a participant on vesting of an Option or a Performance Right, and the Company may implement appropriate procedures to restrict a participant from so dealing in the Shares; and ● the Board is granted a certain level of discretion under the Employee Incentive Programme (EIP), including the power to amend the rules under which the EIP is governed and to waive vesting conditions, forfeiture conditions or disposal restrictions, including but not limited to the execution of the EIP's terms upon termination of employment. The options will vest on the date determined by the Board and as specified in the Invitation Letter. 3,649,298 options were granted under the ESOP during the financial year to 30 June 2023 (2022: 4,599,003). 216,124 options were forfeited due to an employee departure from the Company during the year. These options did not have any other vesting conditions other than continuing employment and the related time of service through the vesting date. Share-based compensation Issue of shares There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2023. Options The terms and conditions of each grant of options over ordinary shares affecting remuneration of KMP in this financial year or future reporting years are as follows: Number of Fair value options Vesting date and per option Name granted Grant Date exercisable date Expiry date Exercise price (Cents) at grant date (Cents) Matthew Boyall 1,288,338 29 July 2019 1 July 2021 1 July 2023 7.000 4.000 Matthew Boyall 1,399,595 4 October 2019 1 July 2022 1 July 2024 9.000 5.900 Matthew Boyall 1,102,607 16 July 2020 1 July 2023 1 July 2025 11.700 5.100 Matthew Boyall 1,428,843 23 July 2021 1 July 2024 23 July 2026 7.800 3.900 Matthew Boyall 1,714,612 30 August 2022 1 July 2025 1 July 2027 8.900 3.200 42 Cue Energy Resources Limited Annual Report 2023
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