Full-year - Chime Communications PLC

Notes to the consolidated financial statements40. Share-based payments (continued)The fair value was calculated using the Black-Scholes model (2007 – Black-Scholes).In valuing the options, the following assumptions were used:2008 2007(restated)Weighted average share price £1.400 £2.930Weighted average exercise price £1.125 £2.350Expected volatility 33.58 33.58%Expected life – savings-related scheme 5 years 5 yearsRisk-free rate 5.0% 5.5%Dividend yield 2.50% 1.89%Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous two years. The expected lifeused in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions andbehavioural considerations.Deferred Shares20072008 restatedDeferred DeferredShares SharesOutstanding at beginning of year 406,732 244,750Awarded during the year 348,575 172,282Lapsed during the year (50,450) (10,300)Outstanding at the end of the year 704,857 406,732The restricted shares were awarded on 28 May 2008. The share price at the date of award was £1.257 (2007 – £2.775). The remaining contractuallife is 579 days (2007 – 685 days). The estimated fair values of the restricted shares awarded is £346,644 (2007 – £370,459).The fair value was calculated with reference to the share price at the date of award.Co-Investment Plan20072008 restatedMatching MatchingShares SharesOutstanding at beginning of year 2,923,000 2,591,000Surrendered in the year (493,415) –Granted during the year – 332,000Outstanding at the end of the year 2,429,585 2,923,000There were no matching shares awarded in the year. In 2007 the share price at the date of award was £2.425. The remaining contractual life is626 days. The estimated fair value of the matching shares granted is £nil (2007 – £391,618).The fair value of the matching shares allocated to the market-based performance criteria was calculated using the Monte Carlo model.84Chime Communications plc