Blackberry 2009 Annual Report Download - page 71

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The following details the changes in issued and
outstanding common shares for the three years ended
February 28, 2009:
Number
Outstanding
(000's)
Common
Shares
Balance as at March 4, 2006 558,006
Exercise of stock options 9,126
Conversion of restricted share units 21
Common shares repurchased pursuant to Common
Share Repurchase Program (9,540)
Balance as at March 3, 2007 557,613
Exercise of stock options 5,039
Balance as at March 1, 2008 562,652
Exercise of stock options 3,565
Conversion of restricted share units 2
Balance as at February 28, 2009 566,219
On October 11, 2005, the Company’s Board of Directors
approved the repurchase by the Company, from time to
time, on the NASDAQ Stock Market, of up to an aggregate
of 28.5 million common shares during the subsequent 12
month period. This represented approximately 5% of the
Company’s outstanding shares. Pursuant to the Common
Share Repurchase Program, which is no longer in effect,
the Company repurchased 19.0 million common shares at a
cost of $391.2 million during the third quarter of fiscal 2006
and repurchased 9.5 million common shares at a cost of
$203.9 million during the second quarter of fiscal 2007 which
brought the total number of common shares repurchased to
the approved maximum of 28.5 million common shares. The
amounts paid in excess of the per share paid-in capital of
the common shares of $328.2 million in the third quarter of
fiscal 2006 and $172.2 million in the second quarter of fiscal
2007 were charged to retained earnings. All common shares
repurchased by the Company pursuant to the Common Share
Repurchase Program have been cancelled. The common
shares noted above have been adjusted to reflect the 3-for-1
stock split.
(b) Stock-based compensation
Stock Option Plan
The Company has an incentive stock option plan for
directors, officers and employees of the Company or its
subsidiaries. No stock options were granted to independent
directors in fiscal 2009.
The Company records stock compensation expense under
SFAS 123(R) resulting in a charge to earnings of $38.1 million in
fiscal 2009 (fiscal 2008 - $33.7 million; fiscal 2007 - $18.8 million).
In accordance with SFAS 123(R), the Company has
presented excess tax benefits from the exercise of stock-
based compensation awards as a financing activity in the
consolidated statement of cash flows.
Options granted under the plan generally vest over a
period of five years and are generally exercisable over a
period of six years to a maximum of ten years from the grant
date. The Company issues new shares to satisfy stock option
exercises. There are 8.7 million stock options vested and not
exercised as at February 28, 2009. There are 13.3 million stock
options available for future grants under the stock option plan.
As a result of measures implemented by the Company’s
Board of Directors following the Company’s Review (as
more fully discussed in note 12(c)), certain outstanding stock
options held by employees, directors and officers of the
Company have been repriced to reflect a higher exercise
price. Repriced options in fiscal 2009 include 43 stock option
grants to 40 individuals in respect of options to acquire
752,775 common shares (fiscal 2008 - 87 stock option grants
to 65 individuals in respect of options to acquire 9,426,000
common shares). In addition, during fiscal 2008, the Company
received $8.7 million in restitution, inclusive of interest,
related to incorrectly priced stock options that were exercised
prior to fiscal 2008. As the repricing of stock options reflects
an increase in the exercise price of the option, there is no
incremental stock compensation expense related to these
repricing events.