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106 ROGERS COMMUNICATIONS INC. 2007 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On January 7, 2008, the Board approved an increase in the annual
dividend from $0.50 to $1.00 per Class A Voting and Class B
Non-Voting share to be paid quarterly on each outstanding
Class A Voting and Class B Non-Voting share. Consequently, the
Class A Voting shares may receive a dividend at a quarterly rate
of up to $0.25 per share only after the Class B Non-Voting shares
have been paid a dividend at a quarterly rate of $0.25 per share.
The Class A Voting and Class B Non-Voting shares share equally in
dividends after payment of a dividend of $0.25 per share for each class.
Dividend
Date declared Date paid per share
April 25, 2006 July 4, 2006 $ 0.0375
October 30, 2006 January 2, 2007 0.0400
$ 0.0775
February 15, 2007 April 2, 2007 $ 0.0400
May 28, 2007 July 3, 2007 0.1250
July 31, 2007 October 1, 2007 0.1250
November 1, 2007 January 2, 2008 0.1250
$ 0.4150
Stock options, share units and share purchase plans:
As a result of the Company’s two-for-one stock split (note 19(a (ii)),
the numbers of options, restricted share units and deferred share
units outstanding were adjusted, in accordance with existing
provisions of the plans for these awards, such that the holders of
these awards would be in the same economic position before and
after effecting the stock split. Consequently, these adjustments did
not result in a new measurement date for these awards.
These amounts are exclusive of the $452 million charge related
to the amendment of the stock option plans on May 28, 2007, as
described below:
(A) STOCK OPTIONS:
(i) Amendments to stock option plans:
On May 28, 2007, the Company’s 1994 Stock Option Plan
(“1994 Plan”), 1996 Stock Option Plan (“1996 Plan”) and 2000
Stock Option Plan (“2000 Plan”) were amended to allow for cash
settled SARs to be attached to all new and previously granted
options. The SAR feature allows option holders to elect to receive
an amount in cash equal to the intrinsic value, being the excess
market price of the Class B Non-Voting share over the exercise
price of the option, instead of exercising the option and acquiring
Class B Non-Voting shares.
All prior period numbers of options, restricted share units and
deferred share units as well as exercise prices and fair values per
individual award have been retroactively adjusted to reflect the
two-for-one stock split.
A summary of stock-based compensation expense is as follows:
As a result, effective May 28, 2007, all outstanding stock options
are classified as liabilities and are carried at their intrinsic value as
adjusted for vesting. The intrinsic value is marked-to-market each
period and is amortized to expense over the period in which the
related services are rendered, which is usually the graded vesting
period or, as applicable, over the period to the date an employee
is eligible to retire, whichever is shorter. Prior to May 28, 2007, all
stock options were classified as equity and were measured at the
estimated fair value established by the Black-Scholes or binomial
models on the date of grant. Under this method, the estimated fair
value was amortized to expense over the period in which the related
services were rendered, which is usually the vesting period or, as
applicable, over the period to the date an employee was eligible
to retire, whichever was shorter. The impact of the amendment to
the stock option plans at May 28, 2007, was an increase in liabilities
of $502 million, a decrease in contributed surplus of $50 million and
a one-time non-cash charge of $452 million. In addition, a future
income tax recovery of $160 million was recorded on May 28, 2007,
as a result of the amendment.
20. STOCK-BASED COMPENSATION:
2007 2006
Stock-based compensation:
Stock options (a) $ 34 $ 32
Restricted share units (b) 21 12
Deferred share units (c) 7 5
$ 62 $ 49