page 112 Bombardier Inc. Annual Report 2003-04 15 S HARE- BASED PLANS Share option plans Prior share option plans Under share option plans, options are granted to key employees and up to October 1, 2003 to directors to purchase Class B Shares (Subordinate Voting). Of the 135,782,688 Class B Shares (Subordinate Voting) initially reserved for issuance, 61,967,660 were available for issuance under these share option plans as at January 31, 2004. For options issued to key employees prior to May 27, 2003, and options issued to directors, the exercise price is equal to the average of the closing prices on the stock exchange during the five trading days preceding the date on which the option was granted. These options vest at 25% per year during a period beginning two years following the grant date, except for 245,000 outstanding options granted to directors, which vest at 20% per year beginning on the grant date. The options terminate no later than 10 years after the grant date. The summarized information on options issued and outstanding and exercisable is as follows as at January 31, 2004: The number of options has varied as follows for the years ended January 31: $^{(1)}$Including 3.1 million options held by former employees of the Corporation’s recreational products segment. Effective May 27, 2003, the Corporation amended prospectively the share option plan for key employees. The exercise price is equal to the average of the closing prices on the stock exchange during the five trading days preceding the date on which the option was granted. However, predetermined target market price thresholds must be achieved in order for the options to be exercised. As at January 31, 2004, target prices ranged between $6 and $10. The options granted under the amended plan vest at 25% per year during a period beginning one year following the grant date. The options terminate no later than seven years after the grant date. Options granted prior to May 27, 2003 have not been affected by this amendment. Current performance share option plan 2004 2003 WEIGHTED WEIGHTED AVERAGE AVERAGE NUMBER OF EXERCISE NUMBER OF EXERCISE OPTIONS PRICE OPTIONS PRICE Balance at beginning of year 41,347,086 $11.32 43,841,984 $ 9.95 Granted – – 5,855,000 12.98 Exercised (1,898,000) 2.24 (6,916,032) 2.91 Cancelled (2,021,600) 15.83 (1,433,866) 16.64 Balance at end of year 37,427,486 $11.54 41,347,086 $11.32 Options exercisable at end of year 24,240,236 $ 9.24 21,010,071 $ 7.33 ISSUED AND OUTSTANDING EXERCISABLE WEIGHTED WEIGHTED AVERAGE WEIGHTED AVERAGE EXERCISE PRICE NUMBER OF REMAINING AVERAGE NUMBER OF EXERCISE RANGE OPTIONS LIFE (YEARS) EXERCISE PRICE OPTIONS PRICE $0 to $5 9,520,466 2.8 $ 4.95 8,520,466 $ 4.92 $6 to $10 12,299,270 4.5 9.11 9,412,020 8.66 $11 to $15 6,735,250 7.2 13.45 2,992,250 11.30 $16 to $20 5,609,000 6.7 19.11 2,344,250 18.90 $21 to $25 3,263,500 7.0 23.01 971,250 23.23 37,427,486 (1) 24,240,236