Leigh, a public limited company, purchased the whole of the share capital of Hash, a limited company, on 1 June 20X6. The whole of the share capital of Hash was formerly owned by the five directors of Hash and under the terms of the purchase agreement, the five directors were to receive a total of three million ordinary shares of $1 of Leigh on 1 June 20X6 (market value $6 million) and a further 5,000 shares per director on 31 May 20X7, if they were still employed by Leigh on that date. All of the directors were still employed by Leigh at 31 May 20X7. Leigh granted and issued fully paid shares to its own employees on 31 May 20X7. Normally share options issued to employees would vest over a three-year period, but these shares were given as a bonus because of the company's exceptional performance over the period. The shares in Leigh had a market value of $3 million (one million ordinary shares of $1 at $3 per share) on 31 May 20X7 and an average fair value of $2.5 million (one million ordinary shares of $1 at $2.50 per share) for the year ended 31 May 20X7. It is expected that Leigh's share price will rise to $6 per share over the next three years.