Caribbean Utilities Company, Ltd.  2011  Annual Report Notes to Financial Statements 46 (Expressed in thousands of United States dollars) The shareholders of the Company approved an Executive Stock Option Plan on October 24, 1991, under which certain employees, officers and directors may be granted options to purchase Class A Ordinary Shares of the Company. The exercise price per share in respect of options is equal to the fair market value of the Class A Ordinary Shares on the date of grant. Each option is for a term not exceeding ten years, and will become exercisable on a cumulative basis at the end of each year following the date of grant. The maximum number of Class A Ordinary Shares under option shall be fixed and approved by the shareholders of the Company from time to time and is currently set at 1,220,100. Options are forfeited if they are not exercised prior to their respective expiry date or upon termination of employment prior to the completion of the vesting period. The position with respect to outstanding unexercised options as at December 31, 2011 was as follows: Under the fair value method, the compensation expense was $0.05 million for the year ended December 31, 2011 (December 31, 2010: $0.05 million), resulting in a corresponding increase of the contributed surplus. Share Options Number of  Number of  Exercise  Term of  Weighted  Class A  exercisable  price  option  Average Ordinary Shares  Class A  ($)  Remaining Date of grant  under option  Ordinary Shares  Life of Option September 22, 2003  174,100  174,100  13.78  10 years April 11, 2008  145,200  108,900  12.22  February 27, 2009  143,300  68,900  8.76  10 years  Outstanding at end of period and Weighted Average  462,600  351,900  11.74  4.91 years  Dec. 31, 2011  Dec. 31, 2011  Dec. 31, 2010  Dec. 31, 2010  Weighted  Weighted average  average  Number of  exercise price  Number of  exercise price options  per share  options  per share Outstanding at beginning of period  850,403  11.59  904,903  11.59 Granted  -  -  -  - Exercised  (5,500)  (8.76)  Forfeited/Cancelled  -  -  (54,500)  (11.60) Expired  (382,303)  (11.46)  -  - Outstanding at end of period  462,600  11.74  850,403  11.59  Share Options 14. Share Options