Orbit Garant 2012 annual rep O rt 53 b Share purchase fnancing On August 20 2007 13333 common shares were issued to an employee of the Company at 150 per common share under the Companys share purchase plan The Company granted a fveyear loan in the amount of 20 to this employee pursuant to the terms and conditions set out in a promissory note secured by 13333 common shares Interest on the principal of the loan is calcul ated and compounded annually at a rate of 8 The loan was repaid in June 2012 Earnings per share Diluted earnings per common share were calculated based on net earnings divided by the average number of common shares outs tanding taking into account the dilutive effect of stock options using the treasury stock method June 30 June 30 2012 2011 Earnings per share basic Net earnings available to common shareholders 10360 11446 Weighted average basic number of common shares outstanding 33175208 32918727 Earnings per share basic 031 035 Earnings per share diluted Net earnings available to common shareholders 10360 11446 Weighted average basic number of common shares outstanding 33175208 32918727 Adjustment to average number of common shares stock options 955726 851336 Weighted average diluted number of common shares outstanding 34130934 33770063 Earnings per share diluted 030 034 2007 stock option plan In January 2007 the Board of Directors adopted an equity settled stock option plan 2007 Stock Option Plan The purpose of this plan is to retain motivate and reward qualifed directors offcers employees and consultants of the Company The vesting and expiry terms of the outstanding options were modifed in June 2008 and will now vest at the rate of 50 31 days after the closing date of the IPO and 25 on each of the frst and second anniversary of the closing date of the IPO and will expire 10 years after the grant date 2008 stock option plan Also on June 26 2008 the Company established the new equity settled option plan 2008 Stock Option Plan which is intended to aid in attracting retaining and motivating the Companys offcers employees directors and consultants The new option pl an has been prepared in accordance with TSXs policies on listed company securitybased compensation arrangements Persons eligible to be granted options under the new option plan are any director offcer or employee of Orbit Garant or of any subsidiary company controll ed by any such person or a family trust of which at least one trustee is any such person and all of the benefciaries of which are suc h person and his or her spouse or children The aggregate number of common shares which may be issued from treasury under the new option plan or reserved for issuanc e upon the exercise of options under the 2008 stock option plan shall not exceed 10 of the issued and outstanding common shares after giving effect to the June 26 2008 offering less the number of options issued under the pri or option plan The number of common shares which may be reserved for issuance pursuant to options granted under the new option plan together with common shares reserved for is suance from treasury under any other employeerelated plan of the Company or options for services granted by the Company to any one person shall not exceed 5 of the then aggregate issued and outstanding common shares The Board of Directors through the recommendation of the Corporate Governance and Compensation Committee will manage the 2008 Stock Option Plan and will determine among other things optionees vesting periods exercise price and other attributes of the options in each case pursuant to the 2008 stock option plan applicable securities legislation and the rules of the TSX Unless otherwise determined by the Board of Directors options will vest at a rate of 20 per annum commencing 12 months after the date of grant and will expire no later than 10 years after the grant date Options are forfeited when the option holder ceases to be a director offcer or empl oyee of the Company The exercise price for any option may not be less than the fair market value the closing price of the common shares on the TSX on the last trading day on which common shares traded prior to such day or the average of the closing bid and ask prices over the last fve trading days if no trades accrued over that period of the common shares at the time of the grant of the option