3 A1 Incentive Share options In 2019, the S4Capital Group Board approved 2,000 options over A1 incentive shares in S4Capital 2 Ltd to executives. In accordance with IFRS 2, the Group recognises share-based payment charges from the date of granting the option plans till the moment of vesting of the option plans. During 2021 a total charge of £7.1 million (2020: £7.1 million) is recognised in relation to the A1 Incentive Share options. Full disclosure of these options is contained within the Remuneration Report on page 71. Valuation methodology For all of these schemes, the valuation methodology is based upon fair value on grant date, which is determined by the market price on that date or the application of a Black-Scholes model, depending upon the characteristics of the scheme concerned. The assumptions underlying the Black-Scholes model are detailed below. Market price on any given day is obtained from external, publicly available sources. During 2021, 948,525 granted options in the DSOP and ESOP plans have an exercise price in the range between £1.80 and £8.04. The weighted average fair value of options granted in the year calculated using the Black-Scholes model was as follows: 2021 Weighted average of fair value of options £2.25 Weighted average assumptions Risk free rate 0.03% Expected life (years) 4.0 Expected volatility 50% Dividend yield n/a Expected life is based on a review of historical exercise behaviour. Expected volatility is sourced from external market data and represents the historical volatility of share prices of comparable company datasets over a period equivalent to the expected option life. The options were exercised on a regular basis during the period; the average share price in 2021 was £6.20 (2020: £2.99). The range of exercise prices of the share options outstanding as at 31 December 2021 outstanding and the weighted average remaining contractual life were as follows: Remaining Number of Exercise contractual options price life Share options outstanding 13,938,589 £0.00 2022-2027 Share options outstanding 2,125,680 £1.42 2025 Share options outstanding 130,000 £1.80 2027 Share options outstanding 482,686 £4.88 2022-2024 Share options outstanding 36,356 £5.54 2024 Share options outstanding 90,585 £6.05 2024 Share options outstanding 38,509 £8.04 2024 Total share options outstanding 16,842,405 S4Capital Annual Report and Accounts 2021 157