Notes to the Consolidated Financial Statements Dollar amounts are in thousands of Canadian dollars (except share and per share amounts) Killam’s $46.0 million convertible subordinated debentures are redeemable at the option of Killam after June 30, 2014, and on or  before June 30, 2016 (provided that the current market price of the common shares of the company on the date on which the  notice of redemption is given is not less than 125% of the conversion price). After June 30, 2016, the debentures are redeemable  at face value. Upon maturity or redemption, Killam may elect to repay all or any portion of the debentures outstanding by issuing  the number of common shares obtained by dividing the aggregate of the principal amount of the debentures that have matured or  are being redeemed by 95% of the weighted average market price of the common shares for the preceding 20 days (ending 5 days  preceding the fixed date for redemption or maturing). At the time of issuance, the fair value of Killam’s obligation to make principal  and interest payments was $43.9 million and the fair value of the holders’ conversion option was $2.1 million (which is reflected in  “Other paid‑in capital”). The effective rate of interest on the liability component, which is paid semiannually, is calculated at 6.3%. The Company’s $10.0 million of unsecured subordinated debentures expired, and were repaid, on January 4, 2013 and consisted  of three tranches of $2.5 million, $2.5 million and $5.0 million, bearing interest at 5.92%, 6.06% and 6.33%, respectively. Related  warrants associated with the subordinated debentures also expired on January 4, 2013. Authorized: Unlimited number of common shares, with no par value Unlimited number of preferred shares, issuable in series, with no par value Issued: The following table summarizes the changes in issued common shares of the Company: (i) Net of issue costs of $Nil (2012 ‑ $1,616) Killam paid monthly dividends as declared by the Board of Directors on or about the 15th day of each month. an annualized dividend of  $0.58 was paid in 2013. the dividend increased to $0.60 on an annualized basis for the January 2014 dividend payable on February 17,  2014. Dividends 16. Capital Stock and Contributed Surplus Capital Stock 15. Subordinated Debentures 14. Convertible Debentures (continued) Face interest  rate % Effective Interest  rate % Face amount December 31, 2013 December 31,  2012 5.92%  6.46%  $2,500 $ ‑ $2,500 6.06%  6.62%  2,500 ‑ 2,500 6.33%  7.10% 5,000 ‑ 4,998 $ ‑ $9,998 For the years ended December 31, 2013 2012 Number of  Shares Value number of  shares Value Balance, beginning of year 53,801,809 $391,120 49,290,751 $339,178 issued for cash (i) ‑ ‑ 2,875,000 32,877 Dividend reinvestment plan (ii) 296,004 3,346 347,473 4,367 Stock options exercised 144,349 1,036 471,593 4,195 Warrants exercised ‑ ‑ 816,992 10,000 Stock issued for acquisitions 194,774 2,390 ‑ ‑ restricted share units redeemed 21,838 289 ‑ ‑ Tax benefit of issuance costs ‑ ‑ ‑ 503 Balance, end of year 54,458,774 $398,181 53,801,809 $391,120 (ii) Net of issue costs of $31 (2012 ‑ $29 ) Killam ProPerties inc | 2013 85