Blackberry 2008 Annual Report Download - page 74

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72
RESEARCH IN MOTION LIMITED
notes to the consolidated financial statements continued
In thousands of United States dollars, except share and per share data, and except as otherwise indicated
The weighted-average fair value of stock options granted
during the year was calculated using the BSM option-pricing
model with the following assumptions:
For the year ended
March 1,
2008 March 3,
2007 March 4,
2006
Number of options granted (000’s) 2,518 1,752 2,733
Weighted-average Black-Scholes value of each option $ 47.11 $ 16.63 $ 12.39
Assumptions:
Risk-free interest rate 4.3% 4.8% 4.1%
Expected life in years 4.6 4.4 4.0
Expected dividend yield 0% 0% 0%
Volatility 41% - 57% 44% - 55% 60%
The Company has not paid a dividend in the previous ten
fiscal years and has no current expectation of paying cash
dividends on its common stock. The risk-free interest rates
utilized during the life of the stock option are based on a U.S.
Treasury security for an equivalent period. The Company
estimates the volatility of its common stock at the date of
grant based on a combination of the implied volatility of
publicly traded options on its common stock, and historical
volatility, as the Company believes that this is a better
indicator of expected volatility going forward. The expected
life of stock options granted under the plan is based on
historical exercise patterns which the Company believes are
representative of future exercise patterns.
Restricted Share Unit Plan
RSUs are redeemed for either common shares issued by the
Company, common shares purchased on the open market
or the cash equivalent on the vesting dates established by
the Company. Compensation expense is recognized upon
issuance of RSUs over the vesting period. The Company
recorded $33 of compensation expense with respect to RSUs
in the year ended March 1, 2008.
The Company issued 5,000 RSUs in the year ended
March 1, 2008 and there were 5,000 RSUs outstanding as at
March 1, 2008 (March 3, 2007 – nil).
Deferred Share Unit Plan
Under the DSU Plan, each independent director will be
credited with DSUs in satisfaction of all or a portion of the
cash fees otherwise payable to them for serving as a director
of the Company. Grants under the DSU Plan replace the stock
option awards that were historically granted to independent
members of the Board of Directors. DSUs will be redeemed
for cash with the redemption value of each DSU equal to the
weighted average trading price of the Company’s shares
over the five trading days preceding the redemption date.
Alternatively, subject to receipt of shareholder approval,
the Company may elect to redeem DSUs by way of shares
purchased on the open market or issued by the Company.
DSUs are accounted for as liability-classified awards under
the provisions of SFAS 123(R). These awards are measured at
their fair value on the date of issuance, and remeasured at
each reporting period, until settlement.
DSUs are to be awarded on a quarterly basis in future
years. The Company issued 8,926 DSUs in the year ended
March 1, 2008. The Company had a liability of $965 in relation
to the DSU plan as at March 1, 2008.