Executive Stock Option Plan
As of this date, the number of Class A shares reserved for issuance pursuant to the executive stock option plan is 3,405,033. The number of Class A shares underlying outstanding options under the executive stock option plan is 2,665,000, of which 2,438,750 are vested, at prices ranging from $2.43 to $7.00. 740,033 options remain available to grant.
During the year, the Company granted 60,000 options (2009 – 220,000) at a weighted average exercise price of $6.77 (2009 – $6.52). The options vest at a rate of twenty-five percent on the date of grant and twenty-five percent on each of the three succeeding anniversary dates and they expire March 4, 2015. No options were exercised in 2010 or 2009. Contributed surplus was increased by $0.3 million (2009 – $0.2 million) related to compensation expense.
Stock Appreciation Rights Plan
A total of 1,745,000 stock appreciation rights (“rights”) have been granted since 2006 at a weighted-average reference price of $5.75. The rights’ expiry dates range from March 2011 to February 2015. As at December 31, 2010, 270,000 rights had expired and 454,250 rights had been exercised. The rights vest at a rate of 50% at the end of year three, 25% at the end of year four and 25% at the end of year five and are exercisable as they vest. At the date of exercise, cash payments are made to the holders based on the difference between the market value of the Company’s Class A shares and the reference price. All rights granted under this plan expire on the 60th day following the 5th anniversary of the grant date. For the year ended December 31, 2010, the compensation expense related to the rights was less than $0.1 million (2009 – $1.5 million) bringing the total obligation to $1.0 million, of which $0.9 million was current (2009 – current obligation of $1.1 million).