Cogeco 2009 Annual Report Download - page 73

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72 COGECO CABLE INC. 2009 Consolidated financial statements
The weighted average 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:
2009
2008
%
%
EXPECTED DIVIDEND YIELD
1.40
0.90
EXPECTED VOLATILITY
29
27
RISK-FREE INTEREST RATE
4.22
4.25
EXPECTED LIFE IN YEARS
4.0
4.0
The fair value of stock options granted for the year ended August 31, 2009 was $8.74 ($12.59 in 2008) 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.
Deferred Share Unit Plan
In April 2007, the Corporation established a Deferred Share Unit Plan (“DSU Plan”) to assist in the attraction and retention of
qualified individuals to serve on the Board of the Corporation. Each existing or new member of the Board may elect to be paid a
percentage of the annual retainer in the form of deferred share units (“DSUs”) with the balance, if any, being paid in cash. The
number of DSUs that a member is entitled to receive is based on the average closing price of the subordinate shares on the Toronto
Stock Exchange for the twenty consecutive trading days immediately preceding the date of grant. Dividend equivalents are awarded
with respect to DSUs in a member’s account on the same basis as if the member was a shareholder of record of subordinate shares
on the relevant record date, and the dividend equivalents are credited to the individual’s account as additional DSUs. DSUs are
redeemable upon an individual ceasing to be a member of the Board or in the event of the death of the member. During the year,
6,282 (3,559 in 2008) deferred share units were awarded to the participants in connection with the DSU Plan. A compensation
expense of $117,000 ($153,000 in 2008) was recorded for the year ended August 31, 2009 related to this plan. Under the DSU plan,
the following DSUs were awarded by Cogeco Cable Inc. and are outstanding as at August 31:
2009
2008
OUTSTANDING, BEGINNING OF YEAR
3,586 –
AWARDED
6,282 3,559
DIVIDEND EQUIVALENTS
132 27
OUTSTANDING, END OF YEAR
10,000 3,586
16. ACCUMULATED OTHER COMPREHENSIVE INCOME
2009
2008
TRANSLATION OF A
NET INVESTMENT IN
SELF-SUSTAINING
FOREIGN
SUBSIDIARIES
CASH
FLOW
HEDGES
TOTAL
TRANSLATION OF A
NET INVESTMENT IN
SELF-SUSTAINING
FOREIGN
SUBSIDIARIES
CASH
FLOW
HEDGES
TOTAL
(in thousands of dollars)
$
$
$
$
$
$
BALANCE, BEGINNING OF YEAR
15,660
(306)
15,354
(3,110)
–
(3,110)
CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING POLICIES (NOTE 1 B))
–
–
–
–
(2,231)
(2,231)
OTHER COMPREHENSIVE INCOME (LOSS)
7,950
(3,723)
4,227
18,770
1,925
20,695
BALANCE, END OF YEAR
23,610
(4,029)
19,581
15,660
(306)
15,354