ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

8.1.5.25 Accounting for share-based paymentThe warrants have been accounted for in accordance withIFRS 2 Share-based payment. The share-based compensationexpense recognised in the income statements as such is givenbelow:Years ended December 31Thousands of Euro (€) 2010 2009 2008Research and development expenses 373 578 569Selling, general and administrative expenses 304 562 362Total for the year 676 1,140 931Total per year end 4,185 3,509 2,369The fair value of each warrant is estimated on the date of grantusing the binomial model by Black Scholes with the followingassumptions:• The historic volatility of the Company (currently determinedat 60%).• Weighted average risk-free interests rates based on BelgianSovereign Strips at the date of grant with a term equal to theexpected life of the warrants, ranging between 2.6% and4.6%.The expected lifetime of the warrants, which on average isabout 7.5 years for the warrants with a maximum duration of10 years.8.1.5.26 Related party transactionsTransactions between TiGenix NV/SA, TiGenix Inc., TC CEF LLC,TiGenix BV and TiGenix Ltd, which are related parties, have beeneliminated in consolidation and are not disclosed in this note.In 2010, there were no material services. Transactions betweenthe Company and its employees, consultants or directors aredisclosed below.There were no other related party transactions.Remuneration of key management personnelThe combined remuneration package, excluding employertaxes, amounted to the following:Years ended December 31Thousands of Euro (€) 2010 (1) 2009 2008Number of management members 4 6 7Short-term employee benefits 851 1,294 1,437Post-employment benefits 32 38 46Share based compensation 224 312 391Other employment costs 41 42 62Total benefits 1,148 1,685 1,936Number of warrants offered 30,000 65,000 151,000Cumulative outstanding warrants 522,749 492,749 527,377Exercised warrants 0 0 173,623Exercisable warrants 223,999 64,188 29,198Outstanding receivables from persons 0 244 0Outstanding payables to persons 0 3,067 0Shares owned 498,999 431,124 357,123(1) In 2010, the management team has changed. As a result the 2009 and 2010 figures are not fully comparable.No loans, quasi-loans or other guarantees are outstanding with members of the management team.190 • TiGenix • Rights Offering