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Notes to the Financial Statements
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41 22.3 Directors’ interest in options At 31 December 2008 and at 20 April 2009 (when these financial statements were approved) the Directors’ interest in share options was as follows: Date of grant Exercise price Number of options L Feldman 21 Dec 2004 £4.20 155,000 16 May 2006 £4.20 45,000 200,000 N Blythe-Tinker 21 Dec 2004 £4.20 155,000 16 May 2006 £4.20 95,000 250,000 K Alexander 1 Mar 2007* £1.00 800,000 R Cooper 12 Dec 2008 £1.26 400,000 K Diacono 1,650,000 * The exercise price for K Alexander was determined on the date of the announcement of him joining the company, 2 February 2007, when the mid-market closing price of the shares in the three days immediately preceeding the announcement was 81.33p 22.4 Weighted average exercise price of options The number and weighted average exercise prices of share options is as follows: Weighted Number of Weighted average Options average exercise price 2008 exercise price Number of 2008 2007 Options GBP GBP 2007 Outstanding at the beginning of the year 2.03 3,009,883 4.06 1,063,898 Granted during the year 1.29 550,000 1.27 2,222,180 Forfeited during the year 2.44 (836,524) 3.36 (276,195) Outstanding at the end of the year 1.76 2,723,359 2.03 3,009,883 Exercisable at the end of the year 1,075,227 592,339 The options outstanding at 31 December 2008 have a weighted average contractual life of 8 years. 22.5 Options granted after 1 January 2007 Binomial valuation method The fair value of services received in return for share options granted in 2008 and 2007 were measured by reference to the fair value of share options granted. The estimate of the fair value of the services received is measured on a Binomial valuation model. The contractual life of the option (10 years) is used as an input into this model. Expectations of early exercise are incorporated into the Binomial model. The option exercise price for individuals who were employed at 21 December 2004 was the market price on admission to AIM of £4.20 and for all other individuals either the average market price on grant date or a premium there to.