Subsequent to year-end, 643,531 stock options were granted at an exercise price of $22.00 per share. Options Exercisable Range of Number exercisable Weighted average exercise price December 31, 2004 exercise price $15.75-18.05 556,500 $17.10 $18.50-22.20 1,580,874 $20.84 $25.00-29.01 704,884 $25.14 $15.75-29.01 2,842,258 $21.18 2004 2003 Maturing 2005 2006 2004 2005 Subscription price $26.45 $28.01 $23.76 $26.45 Number of shares 156,173 178,804 154,201 178,531 Weighted average Shares exercise price January 1, 2003 6,446,817 $19.91 Granted 620,625 25.50 Exercised (1,521,342) 17.54 Cancelled (91,875) 19.60 December 31, 2003 5,454,225 21.19 Granted 661,300 29.01 Exercised (1,139,167) 19.40 Cancelled (39,396) 23.02 December 31, 2004 4,936,962 $22.63 Options Outstanding Weighted average Range of Number outstanding remaining Weighted average exercise price December 31, 2004 contractual life exercise price $15.75-18.05 556,500 3.9 years $17.10 $18.50-22.20 2,566,375 5.7 years $21.01 $25.00-29.01 1,814,087 6.8 years $26.64 $15.75-29.01 4,936,962 5.9 years $22.63 As at December 31, 2004 outstanding stock options were as follows: 9. STOCK-BASED COMPENSATION PLANS Eligible senior executives may be granted options  to purchase Class B shares at an option price which shall not be less than the closing market price of the shares on the last trading day before the grant. Prior to January 1, 2003, non-executive directors were also eligible to be granted options. The maximum number of shares that may be issued under the stock option plan is 12,500,000 shares of which 9,953,471 have been issued. In addition, the number of shares reserved for issuance to insiders cannot exceed 10% of the outstanding shares. The term of the options shall not exceed ten years from the date the option  is granted. Up to 25% of an option grant may be exercised twelve months after the date granted, and a further 25% after each subsequent anniversary. (d) The company has recognized in 2004, compensation expense totalling $1.6 million (2003 – $0.9 million) for the stock options granted in 2004 and 2003 and the employee share purchase plan originating in 2004 and 2003. The fair value of the executive stock options granted in 2004 was estimated to be $5.52 (2003 – $5.28) per option at the date of grant using the Black-Scholes option pricing model with the assumptions of a risk free interest rate of 4.1% (2003 – 4.1%), expected dividend yield of 2.4% (2003 – 2.5%), expected volatility of 20.6% (2003 – 23.2%) and an expected time until exercise of 5 years (2003 – 5 years). (c) Under the company’s annual employee share purchase plans, employees may subscribe for Class B shares to be paid for through payroll deductions over two-year periods at a purchase price which is the lower of the market price on the entry date or the market price at the end of  the payment period. The value of the shares that an employee may subscribe for is restricted to a maximum of 20% of salary at the beginning of the two year period. As at December 31, outstanding employee subscriptions were as follows: MANAGEMENT’S TORSTAR CORPORATION 53 TORSTAR 2004 (a) Stock option plan (b) summary of changes in the stock option plan is as follows: