James Omri has just been named the new CEO of ABC Bank. In addition to an annual salary of $400,000, his two-year contract states that his compensation will include 10,000 at the money lookback call options on the companys stock that expire in two years. The current stock price is $25 per share that can go up by 15% or down by 20% each year and with probabilities 60% and 40% respectively. Treasury bills that mature in two years yield a continuously compounded interest rate of 5%. Assume that James annual salary payments occur at the end of the year and that these cash flows should be discounted at a rate of 9%. Using the Binomial model to calculate the value of the stock options, determine the total value of the compensation package on the date the contract is signed.