NOTES TO CONSOLIDATED FINANCIAL STATEMENTS COMMON SHARES ISSUED AND OUTSTANDING The Company is authorized to issue an unlimited number of common shares of no par value. NET INCOME PER SHARE Basic and diluted earnings per share is calculated based on the weighted average number of common shares outstanding during the year of 475.8 million and 476.6 million (2000 - 474.6 million and 475.2 million; 1999 - 469.5 million and 470.0 million) respectively. STOCK OPTIONS  Weighted Number Average Options of Shares Exercise Exercisable (thousands) Prices (thousands) Outstanding at January 1, 1999 9,928 $ 19.97 7,400 Granted 3,988 $ 20.57 Exercised (569) $ 15.16 Cancelled or expired (476) $ 22.82 Outstanding at December 31, 1999 12,871 $ 20.27 9,661 Granted 3,475 $ 10.30 Exercised (382) $ 12.86 Cancelled or expired (573) $ 18.85 Outstanding at December 31, 2000 15,391 $ 18.25 12,102 Granted 2,142 $ 18.07 Exercised (1,718) $ 14.08 Cancelled or expired (1,365) $ 21.45 Outstanding at December 31, 2001 14,450 $ 18.42 11,376 The following table summarizes information about stock options outstanding at December 31, 2001: Options Outstanding Options Exercisable Weighted Average Remaining Weighted Weighted Number Contractual Average Number Average of Options Life Exercise of Options Exercise Range of Exercise Prices (thousands) (years) Price (thousands) Price $10.03 to $13.91 3,006 7.9 $ 10.88 1,668 $ 11.10 $14.21 to $18.89 3,817 7.7 $ 17.38 2,482 $ 17.05 $19.00 to $20.59 4,340 6.7 $ 20.15 3,981 $ 20.14 $21.00 to $24.61 3,287 6.2 $ 24.23 3,245 $ 24.26 14,450 7.1 $ 18.42 11,376 $ 19.32 The Key Employee Stock Incentive Plan (KESIP) permits the award of options to purchase the Company’s common shares to certain key employees, some of whom are officers. Options may be exercised at a price determined at the time the option is awarded. Generally, 25 per cent of the common shares subject to an option may be purchased on the award date and 25 per cent on each of the three following award date anniversaries. At December 31, 2001, an additional seven million common shares have been reserved for future issuance under KESIP. Shareholder Rights Plan The Company’s Shareholder Rights Plan is designed to encourage the fair treatment of shareholders in connection with any takeover offer for the Company. Under certain circumstances, each common share is entitled to one right which entitles certain holders to purchase common shares of the Company at 50 per cent of the then market price. The Plan was reaffirmed by shareholders in 2001 with certain amendments. Restriction on Dividends Certain terms of the Company’s preferred shares, preferred securities, junior subordinated debentures and debt instruments could restrict the Company’s ability to declare dividends on preferred and common shares. At December 31, 2001, such terms did not restrict or alter the Company’s ability to declare dividends. 2001 ANNUAL REPORT  55