Activity in the RSU plan for the period ended October 31, 2011 and October 31, 2010 is summarized below:
Quarter ended Six Months Ended
October 31, October 31,
Period ended 2011 2010 2011 2010
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Outstanding, beginning of period 126,660 141,413 126,660 141,413
Granted - 39,758 - 39,758
Settled (33,969) (20,730) (33,969) (20,730)
Forfeited - - - -
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Outstanding, end of period 92,691 160,441 92,691 160,441
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The Company funds an independent trustee to purchase the required shares and to provide custodial services.
c) Employee and Director Stock Purchase Plan (ESPP)
For two six-month periods commencing on the second business day after the Company's second period or fiscal year-end financial results are publicly announced (each an "Offering Period"), eligible employees are given an opportunity to request that a percentage of their salary be deducted each pay period for the purpose of acquiring common shares of the Company. Directors may elect to put a maximum lump sum payment of 50% of their annual compensation per offering. Employees may elect to designate up to 5% of their annual salary. The purchase price under the ESPP is the lesser of 90% of the fair market value of the common shares, as determined by calculating the weighted average sale price for board lots as posted on the TSX the ten trading days immediately preceding: (i) the first day of the Offering Period in which the purchase date falls or (ii) the purchase date. The common shares are not considered to be issued by the Company until the end of the six month period. The Company measures compensation expense based on the fair value of the stock using the Black-Scholes option pricing model.
As at October 31, 2011, $90,136 (2010 - $108,292) was committed under the ESPP but the common shares were unissued. This amount is presented as part of cash and cash equivalents on the Consolidated Balance Sheets.
d) Deferred share unit plan (DSU)
The Company has a share-based compensation plan whereby directors and officers are granted DSUs. DSUs vest evenly over a four-year period except for DSUs which are issued to directors who elect to receive quarterly retainer amounts in the form of DSUs, which vest immediately. To the extent the Company pays normal cash dividends, participants receive dividend equivalents in the form of additional fully vested DSUs in respect of DSUs which are fully vested. DSUs do not have an exercise price and can only be settled using cash consideration after the individual has retired from all positions with the Company.
Activity in the DSU plan for the period ended October 31, 2011 and October 31, 2010 is summarized below:
Quarter ended Six Months Ended
October 31, October 31,
Period ended 2011 2010 2011 2010
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Outstanding, beginning of year 164,371 154,903 163,112 165,311
Granted in lieu of options - 17,556 - 17,556
Granted in lieu of retainers 1,181 585 2,539 1,287
Dividend equivalents 776 897 1,730 1,880
Settled (3,312) (506) (4,365) (8,251)
Forfeited - - - (4,348)
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Outstanding, end of period 163,016 173,435 163,016 173,435
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The DSU liability at October 31, 2011 is $6.8 million (2010 - $3.2 million).
Share based compensation expense
During the period ended October 31, 2011, the Company recorded share-based compensation expense relating to equity settled awards of $490,000 (2010 - $548,000) with the offsetting charge to contributed surplus. Share-based compensation was comprised of $225,000, $255,000 and $10,000 relating to the ESOP, RSU and ESPP Plans respectively (2010 - $202,000, $332,000, $14,000). Share-based compensation expense relating to the cash settled DSUs of $1,899,000 (2010 - $793,000) was recorded during the period.
8. Employee Benefits Expense
The following table presents the employee benefits earned by the employees during the periods noted below:
Quarter ended Six Months Ended
October 31, October 31,
Period ended 2011 2010 2011 2010
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Salaries including bonuses $2,573 $1,777 $4,555 $3,543
Benefits 313 205 598 425
Other labour costs 66 76 139 152
Share-based payments 2,389 1,341 3,696 2,212
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$5,341 $3,399 $8,988 $6,332
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9. Earnings Per Share
