Rogers 2014 Annual Report Download - page 128

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 25: STOCK-BASED COMPENSATION
The table below is a summary of our stock-based compensation
expense, which is included in employee salaries and benefits expense:
(In millions of dollars) 2014 2013
Stock-based compensation:
Stock options (9) 30
Restricted share units 34 42
Deferred share units 24
Equity Derivative effect, net of interest receipt 10 8
37 84
As at December 31, 2014, we had a total liability recorded at its fair
value of $144 million (December 31, 2013 – $164 million), related to
stock-based compensation, including stock options, RSUs and DSUs.
The current portion of this is $106 million (December 31, 2013 –
$128 million) and is included in accounts payable and accrued
liabilities. The long-term portion of this is $37 million (December 31,
2013 – $36 million) and is included in other long-term liabilities (see
note 22).
The total intrinsic value of vested liabilities, which is the difference
between the strike price of the share-based awards and the trading
price of the RCI Class B Non-Voting shares for all vested share-based
awards as at December 31, 2014 was $67 million (December 31,
2013 – $85 million).
We paid $48 million in 2014 (2013 – $101 million) to holders of stock
options, RSUs and DSUs upon exercise using the cash settlement
feature, representing a weighted average share price on the date of
exercise of $43.42 (2013 – $48.18).
STOCK OPTIONS
Options to purchase our Class B Non-Voting shares on a one-for-one
basis may be granted to our employees, directors and officers by the
Board of Directors or our Management Compensation Committee.
There are 65 million options authorized under various plans, and each
option has a term of seven to ten years. The vesting period is generally
graded vesting over four years, however, the Management
Compensation Committee may adjust the vesting terms on the grant
date. The exercise price is equal to the fair market value of the Class B
Non-Voting shares, determined as the five-day average before the
grant date as quoted on the TSX.
Performance options
We granted 845,989 performance-based options in 2014
(2013 – 1,415,482) to certain key executives. These options vest on a
graded basis over four years provided that certain targeted stock
prices are met on or after each anniversary date. As at December 31,
2014, we had 4,740,308 performance options (December 31,
2013 – 4,728,959) outstanding.
Summary of stock options
The table below is a summary of the stock option plans, including performance options:
2014 2013
Number of
options
Weighted
average
exercise price
Number of
options
Weighted
average
exercise price
Outstanding, beginning of year 6,368,403 $37.39 8,734,028 $32.34
Granted 845,989 $42.94 1,415,482 $47.56
Exercised (1,259,533) $34.14 (3,323,239) $27.78
Forfeited (195,073) $43.37 (457,868) $42.15
Outstanding, end of year 5,759,786 $38.71 6,368,403 $37.39
Exercisable, end of year 3,363,046 $35.47 4,066,698 $35.08
The table below shows the range of exercise prices, the weighted average exercise price and the weighted average remaining contractual life as
at December 31, 2014:
Options outstanding Options exercisable
Range of exercise prices
Number
outstanding
Weighted average
remaining contractual
life (years)
Weighted
average
exercise price
Number
exercisable
Weighted
average
exercise price
$29.39 – $29.99 623,075 1.16 $29.40 623,075 $29.40
$30.00 – $34.99 1,503,278 2.47 $33.90 1,348,319 $33.85
$35.00 – $39.99 1,638,787 2.47 $38.27 1,210,212 $38.43
$40.00 – $44.99 838,064 8.95 $43.06 – –
$45.00 – $48.57 1,156,582 8.48 $47.47 181,440 $48.56
5,759,786 4.48 $38.71 3,363,046 $35.47
124 ROGERS COMMUNICATIONS INC. 2014 ANNUAL REPORT