NOTE 24: STOCK OPTIONS, SHARE UNITS AND SHARE PURCHASE PLANS tock Options NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 121 We paid $101 million in 2013 (2012 – $76 million) to holders of stock options, RSUs and DSUs upon exercise, representing a weighted average share price on the date of exercise of $48.18 (2012 – $39.42). Stock Option Plans Options to purchase our Class B Non-Voting shares on a one-for-one basis may be granted to our employees, directors and officers by the Board of Directors or our Management Compensation Committee. There are 65 million options authorized under various plans, and each option has a term of seven to ten years. The vesting period is generally graded vesting over four years, however, the Management Compensation Committee may adjust the vesting terms on the grant date. The exercise price is equal to the fair market value of the Class B Non-Voting shares, determined as the five-day average before the grant date as quoted on the TSX. We measure stock-based compensation to employees at fair value. We determine fair value using our Class B Non-Voting share price, and the Black-Scholes option pricing model or trinomial option pricing models, depending on the nature of the share-based award. The table below is a summary of our stock-based compensation expense, which is included in employee salaries and benefits expense: At December 31, 2013, we had a total liability recorded at its fair value of $164 million (December 31, 2012 – $195 million) related to stock- based compensation, including stock options, RSUs and DSUs. The current portion of this is $128 million (December 31, 2012 – $158 million) and is included in accounts payable and accrued liabilities. The total intrinsic value of vested liabilities, which is the difference between the strike price of the share-based awards and the trading price of the RCI Class B Non-Voting shares for all vested share-based awards at December 31, 2013 was $85 million (December 31, 2012 – $109 million). Summary of Stock Options The table below is a summary of the stock option plans, including performance options: Performance Options We granted 1,415,482 performance-based options in 2013 (2012 – 806,100) to certain key executives. These options vest on a graded basis over four years provided that certain targeted stock prices are met on or after each anniversary date. At December 31, 2013, we had 4,728,959 performance options (December 31, 2012 – 5,435,555) outstanding. 2013 2012 Stock-based compensation: Stock options $3 0 $35 Restricted share units 42 35 Deferred share units 4 7 Equity Derivative effect, net of interest receipt 8 – $8 4 $77 The table below shows the range of exercise prices, the weighted average exercise price and the weighted average remaining contractual life at December 31, 2013: Options outstanding Options exercisable Range of exercise prices Number outstanding Weighted average remaining contractual life (years) Weighted average exercise price Number exercisable Weighted average exercise price $12.30 – $18.99 132,332 0.28 $ 12.28 132,332 $ 12.28 $19.00 – $29.99 737,888 2.13 29.41 727,888 29.41 $30.00 – $34.99 1,777,365 3.48 33.97 1,288,612 33.81 $35.00 – $39.99 2,427,906 2.86 38.39 1,712,529 38.62 $40.00 – $48.56 1,292,912 9.19 47.35 205,337 48.30 6,368,403 4.18 $ 37.39 4,066,698 $ 35.08 2013 2012 Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding, beginning of year 8,734,028 $ 32.34 10,689,099 $ 28.59 Granted 1,415,482 47.56 1,397,751 37.86 Exercised (3,323,239) 27.78 (3,075,879) 21.53 Forfeited (457,868) 42.15 (276,943) 35.53 Outstanding, end of year 6,368,403 $ 37.39 8,734,028 $ 32.34 Exercisable, end of year 4,066,698 $ 35.08 4,638,496 $ 28.94