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## Notes to Consolidated Financial Statements 

[in thousands of Canadian dollars, except per share amounts] 

December 31, 2012 and 2011 

During the year, CI granted 2,232,412 options [2011 - 1,577,170 options] to employees. The fair value method of accounting is used for the valuation of the 2012 and 2011 share option grants. Compensation expense is recognized over the three-year vesting period, assuming an estimated forfeiture rate of 0% to 1.4%, [options issued 2011 – 0% to 1%], with an offset to contributed surplus. When exercised, amounts originally recorded against contributed surplus as well as any consideration paid by the option holder is credited to share capital. The fair value of the 2012 and 2011 option grants was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: 

<img src='content_image/193798.jpg'>

(*) Based on the historical volatility of CI’s share price 

The maximum number of shares that may be issued under the Share Option Plan is 14,000,000 shares. As at December 31, 2012, there are 6,363,963 shares [2011 - 6,018,092 shares] reserved for issuance on exercise of share options. These options vest over periods of up to five years, may be exercised at prices ranging from $11.60 to $22.45 per share and expire at dates up to 2017. 

