Notes to Consolidated Financial Statements  Year ended December 31, 2011  10. Share-based payments (continued):  11. Related parties:  Alaris Royalty Corp. 2011 Annual Report  45  In addition to their salaries, the Corporation also provides long-term compensation in the form of  options and RSUs. Key management personnel compensation comprised the following:  In 2010, the Corporation had a $6.5 million demand loan owing to a company controlled by the  Corporation’s largest shareholder. The loan was repaid before the end of 2010. For the year ended  December 31, 2010, the Corporation paid interest of $410,515 to this company.  In 2011, the Corporation formed a wholly-owned subsidiary, Alaris Cooperatief, U.A., a cooperative  in The Netherlands. The Corporation also formed a wholly-owned subsidiary, Alaris USA Inc, a  Delaware Corporation. All intercompany loans, interest and dividends have been eliminated upon  consolidation.  The fair value of the options was calculated using a Black-Scholes model with the following  assumptions:  The options outstanding at December 31, 2011, have an exercise price in the range of $7.27 to  $16.87 and a weighted average contractual life of 3.7 years (2010 – 4.0 years). value of outstanding stock options (2010 - $158,507). The Corporation has reserved 1,216,476 and  issued 929,975 options that vest over a four-year period and expire in five years. Weighted Avg Exercise Price  2011 Number of Options   2011  Weighted Avg Exercise Price  2010  Number of Options   2010  Outstanding at January 1  $11.01  610,150  $10.52  319,150  Exercised during the year  10.86  (10,375)  -  -  Granted during the year  16.32  330,000  11.56  291,000  Outstanding at December 31  12.96  929,775  11.01  610,150  Exercisable at December 31  $11.06 279,956 $11.12 134,575 Oct 2008  Dec 2009  Dec 2010  Aug 2011  Dec 2011  Dividend yield 12.00% 10.50% 8.72% 6.68% 6.79% Expected volatility 38.00% 56.0% 51.79% 46.49% 45.08% Risk free rate of return  2.66%  2.21%  2.23%  1.61%  1.16%  Expected life 4.325 4.325 4.325 4.325 4.325 Weighted average value  $ 1.2840  $ 1.5639  $ 2.5887  $ 3.5070   $ 3.5666  2011 2010  Base salaries and benefits 638,610 625,934 Bonus 900,000 172,500 Share-based payments (non-cash)  1,504,175  1,407,940  3,042,785 2,206,374