Blackberry 2012 Annual Report Download - page 190

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
In connection with its stock option review and the restatement of prior year financial statements, the Company applied judgment in
choosing whether to revise measurement dates for prior option grants. While the Company believes it made appropriate judgments in
determining the correct measurement dates for its stock option grants in connection with the restatement, the issues surrounding past
stock option grants and financial statement restatements are complex and guidance in these areas may continue to evolve.
The Company has a Restricted Share Unit Plan (the “RSU Plan”) under which eligible participants include any officer or employee of
the Company or its subsidiaries. The RSU Plan was approved at the Company’s Annual General Meeting on July 18, 2005 and
received regulatory approval in August 2005. Restricted Share Units (“RSUs”) are redeemed for either common shares issued by the
Company, common shares purchased on the open market by a trustee selected by the Company or the cash equivalent on the vesting
dates established by the Board of Directors or the Compensation, Nomination and Governance Committee of the Board of Directors.
The compensation expense is calculated based on the fair value of the equity award as determined by the closing value of the
Company’s common shares on the business day of the grant and the amount is recognized over the vesting period of the RSU.
The Company has a Deferred Share Unit Plan (the “DSU Plan”), adopted by the Board of Directors on December 20, 2007, under
which each non-executive director will be credited with Deferred Share Units (“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 non-executive members of the Board of Directors. At a minimum, 60% of each non-executive
director’s annual retainer will be satisfied in the form of DSUs. Each director can elect to receive the remaining 40% in any
combination of cash and DSUs. Within a specified period after such a director ceases to be a director, DSUs will be redeemed for
cash with the redemption value of each DSU equal to the weighted average trading price of the Company’s common 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 common shares purchased on the open market or issued by the Company. DSUs are accounted for as
liability-classified awards and are awarded on a quarterly basis. These awards are measured at their fair value on the date of grant, and
remeasured at each reporting period, until settlement.
For further details on the Company’s stock-based compensation, refer to Note 9 to the Consolidated Financial Statements.
Impact of Accounting Pronouncements Not Yet Implemented
In September 2011, the Financial Accounting and Standards Board (“FASB”) issued an amendment to Topic 350, Intangibles -
Goodwill and Other, to simplify how entities test goodwill for impairment. The most significant amendment in this update is the
option of a qualitative test for impairment, by providing entities the option to first assess qualitative factors to determine whether the
existence of events or circumstances leads to a determination that it is more likely than not (as defined as likelihood greater than 50%)
that the fair value of a reporting unit is less than its carrying value. An entity has an unconditional option to bypass the qualitative
assessment for any reporting unit in any period and proceed directly to the two step test and may resume performing the qualitative
assessment in any subsequent period. The amendment is effective for annual and interim goodwill impairment tests performed for
fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company will adopt the guidance in the first quarter
of fiscal 2013 and is currently evaluating the impact that the adoption of this guidance will have on its results of operations, financial
condition and disclosures.
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