Outstanding

11. Capital Stock [cont’d]
Additional information concerning stock options outstanding as at December 31, 2009 is as follows:
Exercise price Options outstanding Options exercisable
Number
Weighted
average
months
to expiry
Weighted
average
exercise price
$ Number
Weighted
average
exercise price
$
$4.19–$6.07 153,433 16 4.60 153,433 4.60
$6.60–$8.10 100,700 38 6.85 79,123 6.88
$9.90–$11.06 486,898 57 10.86 215,898 10.96
$11.10–$12.19 411,237 72 11.98 60,313 11.36
$16.55–$19.26 94,250 80 17.62 25,000 16.55
1,246,518 533,767
The Company recorded stock option compensation expense with a corresponding credit to other paid-in capital and determined the
fair value of stock options under the Black-Scholes option pricing model using the following assumptions:
2009 2008
Stock-based compensation expense $2,022 $1,382
Weighted average fair value of options $6.17 $5.73
Weighted average risk-free interest rate 2.48% 3.32%
Dividend yield Nil Nil
Weighted average volatility factor 42% 47%
Weighted average expected life 7 years 7 years
Stock Purchase Plan
The Company has a Stock Purchase Plan [“Purchase Plan”] allowing permanent employees to purchase up to 200,000 common
shares at fair market value from treasury. During 2009, 11,851 [10,481 in 2008] shares were issued from treasury at fair market
value under the Purchase Plan. As at December 31, 2009, 124,972 [2008 — 136,823] common shares reserved for stock purchase
arrangements remain available under the Purchase Plan.
Under the Purchase Plan, the Company will contribute 25% of employees’ contributions to a maximum of 6% of the employees’
salary in the form of common shares if the employee remains employed by the Company and has held the original shares for two
years from the original purchase date. The Company’s contribution in common shares is calculated using the lesser of the original
common share value at the original purchase date and the date of the Company’s contribution. During 2009, the Company issued
1,641 shares [1,391 in 2008] representing its 25% contribution and recorded a corresponding expense of $30 [$18 in 2008].
Share buyback
On February 27, 2009, the Company received regulatory approval from the TSX to carry out a normal course issuer bid effective
March 3, 2009. The Company has been authorized to purchase up to 811,548 of its common shares, or approximately 10% of its
public float of 8,115,483 common shares as at February 18, 2009, in the twelve-month period following the bid’s effective date.
The Company has an automatic share purchase plan with a broker in order to facilitate repurchases of its common shares
under its normal course issuer bid. The Company’s broker may repurchase shares under the normal course issuer bid at any
time including, without limitation, when the Company would ordinarily not be permitted to due to regulatory restrictions or
self-imposed blackout periods.
During the year ended December 31, 2009, under the terms of a normal course issuer bid approved in 2009, the Company repurchased
and cancelled 4,500 shares at an average price of $16.00 for a cash consideration of $72 resulting in an excess of purchase price
over stated capital of common shares $43 which was charged to retained earnings.
During the year ended December 31, 2008, under the terms of a normal course issuer bid approved in 2008, the Company repurchased
and cancelled 226,725 shares at an average price of $10.01 for a cash consideration of $2,269 resulting in an excess of purchase
price over stated capital of common shares $1,357 which was charged to retained earnings.
48 — Paladin Annual Report 2009