(c) Fair Value of Options Note 27. Share-based Payments  (continued) The fair value of each option during the financial year was estimated on grant date using the Black-Scholes option pricing model.  The Black-Scholes option pricing model takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term  of the option. The Group applied the following assumptions and inputs in estimating the weighted average fair value: NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011 Historical volatility was the basis for determining expected share price volatility as it is assumed that this is indicative of future  trends, which may not eventuate. (d) Share-based Payments Expense Total expenses arising from share-based payment transactions recognised during the financial year, included as part of employee  benefits expense in the consolidated statement of comprehensive income, was $5,069,475 (2010: $5,289,047). Note 28. Remuneration of Key Management Personnel Directors and other key management personnel at any time during the financial year were as follows: 2011 2010 Weighted average exercise price  $9.70 $12.98 Weighted average life of options  1,481 days 1,408 days Weighted average share price  $7.13 $8.21 Expected share price volatility  42% 55% Risk free interest rate  5.21% 5.44% Weighted average option value  $2.19 $2.90 Name  Position Directors Mr Robert Hosking  Executive Chairman Mr Mark Smith  Executive Director and Exploration Director Mr Geoff Atkins  Independent Non-Executive Director Mr Clark Davey  Independent Non-Executive Director Mr Stephen Power  Non-Executive Director Other key management personnel Mr Scott Hosking  Company Secretary and Chief Financial Officer (Group) Mr Tim Hosking  Chief Executive Officer South America Mr Lino Barro  Engineering Manager Mr Edward Munks  Chief Operating Officer All of the above persons were also Directors or other key management personnel during the previous financial year, except for  Mr Clark Davey and Mr Edward Munks. 74 Karoon Gas Australia Ltd  Annual Report 2011