Blackberry 1998 Annual Report Download - page 30

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(b) Stock options
The Company has 4,252,000 options outstanding which expire at various dates between March 1, 1998
and December 4, 2006 and are exercisable at prices ranging from $0.05 to $7.25.
12. Capital Dividend
A capital dividend was declared on October 24, 1997 to the shareholders of record at that date.
13. Government Assistance
The government assistance from the Ontario Technology Fund may be repayable in the form of royalties
based on future sales related to the technology funded. Such amounts, if any, that may be repayable will be
accounted for in the period in which conditions arise that will cause repayment. These royalty payments
will be repayable over a period of ten years from the date of commencement of the future sales related to
the technology funded or until the total aggregate amount of all royalty payments equals the total amount
of government assistance, whichever occurs first. The royalty payments will be based on the company’s
value added component to the products, being the excess of selling price over material costs, and will be
1% in year 1, 2% in year 2, 3% in year 3, 4% in year 4 and 5% in each of years 5 to 10, subject to annual
maximum contributions of $100,000 in year 1, $400,000 in year 2, $600,000 in year 3, $800,000 in year 4,
$1,000,000 in year 5 and $1,250,000 per year in each of years 6 to 10, inclusive, until the total $4,710,000 of
the grant has been paid back.
The government assistance from Technology Partnerships Canada (“TPC”) is subject to royalty payments
of 2.2% of gross product revenues based on future sales related to the technology funded. The first royalty
payment is due 46 days after February 28, 2000. If by February 28, 2003, the royalty payments paid or due
equal or exceed $9,100,000, no further royalty payments will be payable. If by February 28, 2003, the royalty
payments paid or due do not equal or exceed $9,100,000, royalty payments will continue to be payable to a
limit of $9,100,000, but such royalty payments shall be payable on revenue from all two-way pager products
instead of solely products developed with the TPC funding.
No amounts have been accrued with respect to repayments as the conditions for repayment have not
been met.
Included in revenue are government grants and investment tax credits totalling $2,041,182 (1997 –
$2,234,255).
14. Comparative Figures
Certain of the prior year’s figures have been reclassified for consistency with the presentation adopted for
the current year.
As at February 28, 1998, share issue costs previously charged to retained earnings have been reallocated
to share capital. As a result, as at February 28, 1997 and 1998, retained earnings increased and share capital
decreased by $2,253,717.