Notes to the Consolidated Financial Statements Continued Note 30. Share‑based Payments The share‑based payment plans are described below. There has been no cancellation to a plan during the financial year. (a) Employee Share Option Plan (‘ESOP’) The Company currently only has the 2016 ESOP in place. ESOP options expire up to 4 years after they are granted. The exercise price of ESOP options is based on the volume weighted average price at which the Company’s ordinary shares are traded on the ASX during the 20 days of trading before the ESOP options were offered plus a premium to the market price. Each ESOP option provides eligible employees with the right to acquire one fully paid ordinary share of the Company at the exercise price determined upon grant, or its equivalent value, subject to the achievement of the relevant performance conditions. Share options granted under the ESOP carry no dividend or voting rights. If there is a change of control of the Company, for all unexercised ESOP options, a percentage amount of unvested ESOP options may vest on the basis of the pro‑rata achievement of pre‑determined performance conditions. During the financial year, the Group did not grant any ESOP options (2020: $Nil) over unissued ordinary shares in the Company to Executive Directors. The following summary reconciles the outstanding ESOP options over unissued ordinary shares in the Company at the beginning and end of the financial year: Consolidated 2021 2020 Weighted Weighted Average Exercise Average Exercise Number Price A$ Number Price A$ Balance at beginning of financial year 7,230,019 $1.54 9,995,521 $1.61 Granted during financial year – – – – Exercised during financial year – – – – Cancelled during financial year – – – – Expired during financial year – – – – Forfeited during financial year (3,163,896) $1.73 (2,765,502) $1.79 Balance at end of financial year 4,066,123 $1.40 7,230,019 $1.54 Exercisable at end of financial year – – – – ESOP options outstanding as at 30 June 2021 had an exercise price of A$1.40 (30 June 2020: range of exercise prices from A$1.40 to A$1.77) with a weighted average remaining contractual life of 365 days (30 June 2020: 573 days). Details of ESOP options outstanding at the end of the financial year are: Exercise Price Grant Date Date of Expiry Per ESOP Option Number 21 September 2018 30 June 2022 $1.40 2,996,437 31 December 2018 30 June 2022 $1.40 1,069,686 Total ESOP options 4,066,123 (b) Fair Value of Share Options The fair value of each share option issued during previous financial years was estimated on grant date using the Black‑Scholes option pricing model. The Black‑Scholes option pricing model takes into account the exercise price, the term of the share option, 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 share option. The last grant of share options was during the year ended 30 June 2019. Karoon Energy Ltd 120 Annual Report 2021