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62 COGECO CABLE INC. 2008 Notes to the Consolidated Financial Statements
Under the Stock Option Plan, the following options were granted by the Corporation and are outstanding as at August 31:
OPTIONS
2008
WEIGHTED
AVERAGE
EXERCISE
PRICE OPTIONS
2007
WEIGHTED
AVERAGE
EXERCISE
PRICE
$ $
OUTSTANDING, BEGINNING OF YEAR 942,714 24.91 715,571 20.88
GRANTED 113,084 48.71 577,587 26.69
EXERCISED (157,481) 21.77 (348,131) 19.58
FORFEITED (53,593) 27.25 (2,313) 26.71
OUTSTANDING, END OF YEAR 844,724 28.53 942,714 24.91
EXERCISABLE, END OF YEAR 320,551 25.55 239,067 21.58
At August 31, 2008, the range of exercise prices, the weighted average exercise price and the weighted average remaining
contractual life of options are as follows:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
RANGE OF EXERCICE PRICES
$
NUMBER
OUTSTANDING
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
LIFE (YEARS)
WEIGHTED
AVERAGE
EXERCICE
PRICE
$
NUMBER
EXERCISABLE
WEIGHTED
AVERAGE
EXERCICE
PRICE
$
7.05 3,710 4.17 7.05 3,710 7.05
15.70 TO 18.12 56,035 5.20 16.51 56,035 16.51
21.50 TO 26.63 585,087 7.70 25.83 196,698 24.97
29.05 TO 33.12 85,937 7.22 29.21 39,375 29.19
36.10 TO 45.59 18,833 8.74 41.54 5,709 40.42
49.82 95,122 9.17 49.82 19,024 49.82
844,724 7.66 28.53 320,551 25.55
The Corporation recorded compensation expense for options granted on or after September 1, 2003. As a result, a compensation
expense of $1,721,000 ($1,662,000 in 2007) was recorded for the year ended August 31, 2008.
The fair value of each option granted was estimated on the grant date for purposes of determining stock-based compensation
expense using the binomial option pricing model based on the following assumptions:
2008 2007
% %
EXPECTED DIVIDEND YIELD 0.90 1.27
EXPECTED VOLATILITY 27 32
RISK-FREE INTEREST RATE 4.25 4.05
EXPECTED LIFE IN YEARS 4.0 4.0
The fair value of stock options granted for the year ended August 31, 2008 was $12.59 ($7.39 in 2007) per option.
For the purpose of compensation expense, stock-based compensation costs are amortized to expense on a straight-line basis over
the vesting period, which is three to four years.