Blackberry 2009 Annual Report Download - page 72

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70
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
and Kavelman undertaking not to exercise certain vested RIM
options to acquire an aggregate of 1,160,129 common shares
of RIM. These options have a fair value equal to the aggregate
contribution amounts determined using a BSM calculation
based on the last trading day prior to the day the OSC issued
a notice of hearing in respect of the matters giving rise to the
settlement. These options are shown as outstanding, vested
and exercisable as at February 28, 2009 in the table below.
Messrs. Balsillie, Lazaridis, Kavelman and Loberto have also
paid a total of CAD $9.1 million to the OSC as an administrative
penalty and towards the costs of the OSC’s investigation.
In June 2007, the Board amended the Stock Option Plan
to provide that options held by directors of the Company will
not terminate upon a director ceasing to be a director of the
Company if such person is appointed as a Director Emeritus
of the Board. This resulted in a modification for accounting
purposes of unvested options previously granted to two
directors who where appointed Directors Emeritus during
the second quarter of fiscal 2008, which in turn required the
Company to record additional compensation expense in fiscal
2008 in the amount of $3.5 million.
A summary of option activity since March 4, 2006 is shown
below.
As previously disclosed, the Company’s Co-Chief
Executive Officers voluntarily offered to assist the Company
in defraying costs incurred in connection with the Review and
the Restatement by contributing CAD $10.0 million (CAD $5.0
million by each Co-CEO) of those costs. As part of a settlement
agreement reached with a pension fund, an additional CAD
$5.0 million (CAD $2.5 million by each Co-CEO) was received
in the third quarter of fiscal 2008. The Company received these
voluntary payments in the second and third quarters of fiscal
2008 and were recorded net of income taxes as an increase to
additional paid-in capital. Furthermore, as part of a settlement
agreement reached with the Ontario Securities Commission
(“OSC”) as more fully described in note 12(c), Messrs. Balsillie,
Lazaridis and Kavelman also agreed to contribute, in aggregate,
a total of approximately CAD $83.1 million to RIM, consisting
of (i) a total of CAD $38.3 million to RIM in respect of the
outstanding benefit arising from incorrectly priced stock options
granted to all RIM employees from 1996 to 2006, and (ii) a
total of CAD $44.8 million to RIM (CAD $15.0 million of which
had previously been paid) to defray costs incurred by RIM in
the investigation and remediation of stock options, granting
practices and related governance practices at RIM. These
contributions are being made through Messrs. Balsillie, Lazaridis
Options Outstanding
Number
(in 000’s)
Weighted-
Average
Exercise
Price
Average
Remaining
Contractual
Life in Years
Aggregate
Intrinsic
Value
Balance as at March 4, 2006 26,883 $ 6.78
Granted during the year 1,752 37.15
Exercised during the year (9,126) 4.30
Forfeited/cancelled/expired during the year (348) 9.97
Balance as at March 3, 2007 19,161 $ 10.85
Granted during the year 2,518 101.60
Exercised during the year (5,039) 10.82
Forfeited/cancelled/expired during the year (174) 31.76
Balance as at March 1, 2008 16,466 $ 28.66
Exercised during the year (3,565) 7.60
Forfeited/cancelled/expired during the year (170) 60.25
Balance as at February 28, 2009 12,731 $ 27.51 2.60 $ 262,250
Vested and expected to vest at February 28, 2009 12,484 $ 26.99 2.57 $ 260,746
Exercisable at February 28, 2009 8,686 $ 15.07 1.82 $ 255,238
The aggregate intrinsic value in the table above represents the
total pre-tax intrinsic value (the aggregate difference between
the closing stock price of the Company’s common stock on
February 28, 2009 and the exercise price for in-the-money
options) that would have been received by the option
holders if all in-the-money options had been exercised on
February 28, 2009. The intrinsic value of stock options exercised
during fiscal 2009, calculated using the average market price
during the period, was approximately $82 per share.