Cogeco 2013 Annual Report Download - page 90

Consolidated financial statements COGECO CABLE INC. 2013 89
22. RELATED PARTY TRANSACTIONS
A) PARENT COMPANY
Cogeco Cable Inc. is a subsidiary of COGECO Inc., which holds 32.1% of the Corporation's equity shares, representing 82.5% of the
Corporation's voting shares. On September 1, 1992, Cogeco Cable Inc. executed a management agreement with COGECO Inc. under which
the parent company agreed to provide certain executive, administrative, legal, regulatory, strategic and financial planning services and
additional services to the Corporation and its subsidiaries (the “Management Agreement”). These services are provided by COGECO Inc.'s
senior executives, including the President and Chief Executive Officer, the Senior Vice President and Chief Financial Officer, the Vice President
Corporate Affairs, the Vice President Chief Legal Officer and Secretary, the Vice President Corporate Development, the Vice President and
Treasurer, the Vice President Public Affairs and Communications and the Vice President Internal Audit. No direct remuneration is payable to
such senior executives by the Corporation. However, the Corporation granted 71,233 stock options (47,729 in 2012) and 12,280 ISUs (11,006
in 2012) to these senior executives during fiscal year 2013. During fiscal 2013, the Corporation charged COGECO Inc. amounts of $386,000
($324,000 in 2012) and of $452,000 ($390,000 in 2012), respectively, with regard to the Corporation's stock options and ISUs granted to
COGECO Inc.'s senior executives.
Under the Management Agreement, the Corporation pays monthly fees equal to 2% of its total revenue to COGECO Inc. for the above-
mentioned services. In 1997, the management fee was capped at $7 million per year, subject to annual upward adjustment based on increases
in the Consumer Price Index in Canada. This limit can be increased under certain circumstances upon request to that effect by COGECO
Inc. For fiscal year 2013, the maximum amount of $9.6 million ($9.5 million in 2012) was paid to COGECO Inc. In addition, the Corporation
reimburses COGECO Inc.'s out-of-pocket expenses incurred with respect to services provided to the Corporation under the Management
Agreement.
B) COMPENSATION OF KEY MANAGEMENT PERSONNEL
Key management personnel are comprised of the members of the Board of Directors and of the Management Committee of the Corporation.
The compensation paid or payable to key management personnel for employee services is as follows:
Years ended August 31, 2013 2012
(In thousands of Canadian dollars) $$
Salaries and other short-term employee benefits 4,926 2,330
Post-employment benefits 680 446
Share-based payments 1,960 1,070
7,566 3,846
23. COMMITMENTS, CONTINGENCIES AND GUARANTEES
A) COMMITMENTS
At August 31, 2013, the Corporation and its subsidiaries are committed under operating lease agreements and other long-term contracts to
make annual payments as follows:
2014 2015 2016 2017 2018 Thereafter
(In thousands of Canadian dollars) $$$ $ $ $
Operating lease agreements(1) 31,958 31,725 29,454 26,555 25,045 80,778
Other long-term contracts(2) 11,583 3,878 1,026 761 750 750
43,541 35,603 30,480 27,316 25,795 81,528
(1) Include operating lease agreements for rent premises and support structures.
(2) Include long-term commitments with suppliers to provide services including minimum spend commitments.
B) CONTINGENCIES
The Corporation and its subsidiaries are involved in matters involving litigation arising out of the ordinary course and conduct of its business.
Although such matters cannot be predicted with certainty, management does not consider the Corporation's exposure to litigation to be
significant to these financial statements.