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Notes to Consolidated Financial Statements 

Year ended December 31, 2011 

## 9. Debt (continued): 

lending syndicate clarifying the exclusion of certain non-cash and extraordinary amounts in the calculation of the covenants for the remainder of the term of the agreement. 

During 2010, the Corporation repaid in full a $6,500,000 unsecured demand facility with a company controlled by its largest shareholder. Interest was payable at 13.00% per annum. 

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## 10. Share-based payments: 

The Corporation has a Restricted Share Unit Plan (“RSU Plan”) and a Stock Option Plan as approved by shareholders at a special shareholders meeting on July 31, 2008 that authorizes the Board of Directors to grant awards of RSUs and Options subject to a maximum of ten percent of the issued and outstanding common shares of the Corporation. 

The RSU Plan will settle in voting common shares which may be issued from treasury or purchased on the Toronto Stock Exchange. The Corporation has reserved 867,667 and issued 384,400 RSUs to management and Directors as of December 31, 2011. The RSUs issued to directors vest over a three- year period. The RSUs issued to management (290,650) do not vest until the end of the three-year period and are subject to certain performance conditions relating to operating cash flow per share. The stock-based compensation expense relating to the RSU Plan is based on the issue price at the time of grant and management’s estimate of the future performance conditions and will be amortized over the thirty-six month vesting period. Payments in lieu of dividends on the unvested RSUs are made monthly in accordance with the Corporation’s dividend policy. Payments to management are split evenly between cash and common shares. 

For the year ended December 31, 2011, the Corporation incurred stock-based compensation expenses of $1,978,727 (2010 - $1,817,981) which includes: $1,247,452 (non-cash expense) for the RSU Plan expense that is to be amortized over the thirty-six month vesting period of the plan (2010 - $1,521,424); $152,550 (non-cash expense) for shares issued in the year in lieu of dividends under the RSU Plan (2010 - $138,050); and $578,725 (non-cash expense) for the amortization of the fair 

