Blackberry 2007 Annual Report Download - page 80

78
RESEARCH IN MOTION LIMITED
notes to the consolidated financial statements continued
For the Years Ended March 3, 2007, March 4, 2006 and February 26, 2005
In thousands of United States dollars, except share and per share data, and except as otherwise indicated
the resulting exercise price was lower than the closing
price of the common shares on the day immediately prior
to the respective employee’s start date.
Grants to Existing Employees
Grants to the co-CEOs
• From December 1996 to August 2006, the Company made
eight grants of stock options to each of the co-CEOs
involving options to acquire an aggregate of 3,700,000
common shares. As set out above, grants to the co-
CEOs were approved by the Company’s Compensation
Committee or the Board. The Company found that
four of the grants to the co-CEOs involving options to
acquire an aggregate of 1,300,000 common shares had no
measurement date issues, and 12 grants to the co-CEOs
involving options to acquire an aggregate of 2,000,000
common shares were priced at a date prior to, or in
two instances subsequent to, Board or Compensation
Committee approval. In one instance, two of the option
grants to acquire an aggregate of 400,000 common
shares were granted and priced at a date prior to required
shareholder approval to increase the size of the Stock
Option Plan pool, which resulted in a nominal negative
intrinsic value. The aggregate intrinsic value of all the Co-
CEO awards measured on the date of final approval is $1.6
million for each of Mr. Balsillie and Mr. Lazaridis.
Grants on Promotion
• Grant dates established prior to approval dates – During
the period under review, the Company regularly awarded
options to employees upon promotion to a senior
management position. In certain circumstances, the
Company granted options based on the date and share
price of the effective promotion date; however, the
terms of the award and the approval of the award were
often not determined until after the effective date of the
promotion. In other instances, the Company selected
the same grant date for several employees who received
promotions around the same date; however, the option
grant date selected by the Company preceded the
approval date. For the purposes of the Restatement, the
Company has determined that the measurement date
is the approval date and has calculated an additional
intrinsic value based on the number of options granted
multiplied by the difference between (a) the share price on
the date immediately prior to the approval date, and (b)
the exercise price of the option. The Company identified
two instances of incorrect measurement dates involving
options to acquire an aggregate of 21,000 common
shares relating to promotional grants in the period prior
to February 27, 2002, and 85 instances involving options
to acquire an aggregate of 466,500 common shares
subsequent to that date.
Group Grants
• A group grant is a granting of options that is made to
all or substantially all employees within a department or
departments. In certain group grants, the grant date
used was a date before the specific individuals eligible
to receive those awards were determined with finality. In
these instances, the share price increased between the
date the preliminary group grants were established and
the date the listing of employees and their respective
grants was finalized and approved. In these instances,
the measurement date for the entire group grant has
been determined to be the later date when the listing of
employees and their respective grants were finalized and
the listing and the determination of the exercise price was
approved. In other instances, the option exercise price
used for the respective group grant was selected with
hindsight. In these instances, the measurement date for
the entire group grant was determined to be the later date
when the listing was finalized and the determination of
the exercise price was approved. The Company identified
three group grants involving grants of options to 710
individuals to acquire an aggregate of 1,375,240 common
shares with measurement date issues in the period prior to
February 27, 2002, and five group grants involving grants
of options to 211 individuals to acquire an aggregate of
2,448,000 common shares with measurement date issues
subsequent to that date.
Periodic Grants
• Periodic grants with look-back pricing – In certain
instances, the Company established the grant date of
awards with reference to a historical low price in a month
or in a range of dates. For awards where the exercise
price was set by reference to an earlier date, the Company
has determined, primarily through contemporaneous email
documentation, the appropriate date at which all of the