The dividend reinvestment plan allows eligible  common shareholders to use their dividends to buy additional common shares. A trustee buys BCE Inc. common shares for the participants on the open market, by private purchase or from BCE Inc. (where the shares are issued from treasury). BCE Inc. chooses the method the trustee uses to buy the shares. A total of 3,198,015 common shares were bought in the open market under this plan for $89 million in 2004. A total of 2,807,899 common shares were bought from treasury for $82 million in 2003. There were 37,843 employees participating in the plans at December 31, 2004. The total number of common shares bought for employees was 6,818,079 in 2004 and 6,352,654 in 2003. Compensation expense related to ESPs was $38 million in 2004, $38 million in 2003 and $43 million in 2002. At December 31, 2004, 13,513,812 common shares were reserved for issue under the ESPs. Under BCE Inc.’s long-term incentive programs, BCE Inc. may grant options to key employees to buy BCE Inc. common shares. The subscription price is usually equal to the market value of the shares on the last trading day before the grant comes into effect. At December 31, 2004, 25,777,551 common shares were authorized for issue under these programs. ESPs are designed to encourage employees of BCE Inc. and its participating subsidiaries to own shares of BCE Inc. Each year, employees who participate in the plans can choose to have up to a certain percentage of their annual earnings withheld through regular payroll deductions to buy BCE Inc. common shares. In some cases, the employer may also contribute up to a maxi- mum percentage of the employee’s annual earnings  to the plan. For options granted before January 1, 2004, the right to exercise options generally vests or accrues by 25% a year for four years of continuous employment from the day of grant, unless a special vesting period applies. Options become exercisable when they vest and can be exercised for a period of up to 10 years from the date of grant.  For most options granted after January 1, 2004, the right to exercise options vests after two to three years of continuous employment from the day of grant, if specific performance targets are met. Options become exercisable when they vest and can be exercised for  a period of up to six years from the date of grant. Subject to achieving specific performance targets, 50% of the options will vest after two years and 100% after three years. Each participating company decides on its maxi- mum percentages. For Bell Canada, employees can contribute up to 12% of their annual earnings. Bell Canada contributes up to 2%. The trustee of the ESPs buys BCE Inc. common shares for the participants on the open market, by pri- vate purchase or from BCE Inc. (where the shares are issued from treasury). BCE Inc. chooses the method the trustee uses to buy the shares. Bell Canada Enterprises  2004 Annual Report 109 Employee Savings Plans (ESPs) Note  22 : Stock-Based Compensation Plans  Stock Options Dividend Reinvestment Plan The table below provides details about the outstanding common shares of BCE Inc. No Class B shares were  outstanding at December 31, 2004 and 2003. 2004 2003 NUMBER STATED NUMBER STATED OF SHARES CAPITAL OF SHARES CAPITAL Outstanding, beginning of year 923,988,818 16,749 915,867,928 16,520 Shares issued: under employee savings plans – – 4,951,199 145 under dividend reinvestment plan – – 2,807,899 82 under employee stock option plans 1,946,864 32 552,681 9 Shares purchased for cancellation – – (190,889) (7) Outstanding, end of year 925,935,682 16,781 923,988,818 16,749