The Company has also authorized an unlimited number of Class A and Class B Preferred Shares of which none are outstanding.
The Class A Subordinate Voting shares (“Class A shares”) carry one vote per share and the Class B Common shares (“Class B shares”) carry ten votes per share. In the event of a vote to change any right, privilege, restriction or condition attached to either the Class A shares or Class B shares, the Class B shares are entitled to one vote per share. In addition, the ten votes attaching to each Class B share shall be decreased to one vote 180 days following the acquisition of Class B shares pursuant to a take-over bid where the ownership of Class B shares, after the acquisition, exceeds 50%. In all other respects, these shares rank equally. The outstanding Class B shares are convertible to Class A shares at the option of the shareholder, on a one-for-one basis.
The Company may impose restrictions respecting the issuance, transfer and voting of the Company’s shares due to externally-imposed regulations more fully described under “Capital risk” in note 14.
(a) Stock split
Effective on November 25, 2009, the Class A shares and Class B shares were split on a three-for-one basis.
During 2010, the Company declared dividends of $0.12 (2009 – $0.10) per Class A and Class B shares.
(c) Share repurchases
In 2010, pursuant to the Normal Course Issuer Bid which expired February 8, 2011, the Company repurchased for cancellation 1,459,978 of its outstanding Class A shares for $9,227,000. As a result of these share repurchases, capital stock was reduced by $2,100,000 and retained earnings by $7,127,000. No repurchases were made in 2009.
(d) Executive stock option plan
During the year, the Company granted 60,000 options (2009 – 220,000) at a weighted average exercise price of $6.77 (2009 – $6.52), pursuant to the executive stock option plan described in note 13(b). 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 $335,000 (2009 – $212,000) related to compensation expense from the Company accounting for its executive stock option plan.