Examine the information in Note 13 to Corus’s financial statements pertaining to the company’s stock option plan and answer the following questions:

a. Describe the terms of the share compensation plan.

b. How many employee stock options were outstanding on August 31, 2008? How many of the stock options could be exercised on August 31, 2008%

c. How many options were granted during fiscal 2008? What was the average exercise price of the options granted during fiscal 2008?

d. How many options were exercised during fiscal 2008? What was the average price paid for the shares purchased by the employees?

e. How many options expired during fiscal 2008? Why would an employee allow an option to expire without exercising it?

f. What amount did Corus expense in fiscal 2008 as a result of granting stock options to employees? Why is the stock option expense added back to net income in the calculation of cash from operations?
g. What do you think is the purpose of Corus’s share compensation plan?

Corus Entertainment, Inc. (Corus), a media and entertainment company, engages in the radio and television broadcasting business in Canada. The company operates 53 radio stations, various specialty television networks focused on children and adult genres, and three broadcast television stations. It also produces and distributes children's programming and merchandise products, offers cable advertising and digital audio services, and publishes children's books in English. The company was founded in 1998 and is based in Toronto. Corus's Class B common shares trade on the TSX and the New York Stock Exchange.12 Corus's consolidated balance sheets, statements of income and comprehensive income and shareholders' equity, and extracts from the statements cash flows and the notes to the financial statements are provided in Exhibit 10.9. 

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EXHIBIT 10.9 Corus Entertainment Inc. Consolidated balance sheets As at August 31 (in thousands of Canadian dollars) 2008 2007 Liabilities and shareholders' equity Current Accounts payable and accrued liabilities (note?) 196,026 166,083 Income taxes payable 1,474 Total current liabdities 196.026 167.557 Long-term debt (note 8) 692,750 610,697 Other long-term liabilities (note 9) 59,936 64,773 Future tax liability note 131 87.699 102.851 Total liabilities Non-controlling interest 1,036.411 945,878 20.237 15.196 Shareholders' equity Share capital note 10) 848,257 882,244 Contributed surplus 17,304 10,250 Retained earnings 131,594 95,568 Accumulated other comprehensive loss (note 20) (20,150) (12,169) Total shareholders' equity 977.005 975,893 2,033,653 1,936.967