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## Notes to consolidated financial statements September 27, 2014 and September 28, 2013 

(Millions of dollars, unless otherwise indicated) 

## Stock option plan 

The Corporation has a stock option plan for certain Corporation employees providing for the grant of options to purchase up to 10,000,000 Common Shares. As at September 27, 2014, a balance of 2,626,052 shares could be issued following the exercise of stock options ( 2,814,512  as at September 28, 2013 ). The subscription price of each Common Share under an option granted pursuant to the plan is equal to the market price of the shares on the day prior to option grant date and must be paid in full at the time the option is exercised. While the Board of Directors determines other terms and conditions for the exercise of options, no options may have a term of more than five years from the date the option may initially be exercised, in whole or in part, and the total term may in no circumstances exceed ten years from the option grant date. Options may generally be exercised two years after their grant date and vest at the rate of 20% per year . 

The outstanding options and the changes during the year were summarized as follows: 

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The information regarding the stock options outstanding and exercisable as at September 27, 2014 was summarized as below : 

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The weighted average fair value of $ 8.89  per option ($ 11.30  in 2013 ) for stock options granted during fiscal 2014 was determined at the time of grant using the Black-Scholes model and the following weighted average assumptions: risk- free interest rate of 1.7 % ( 1.2% in 2013 ), expected life of 5.3  years ( 5.4  years in 2013 ), expected volatility of 16.3 % ( 21.0% in 2013 ) and expected dividend yield of 1.8 % ( 1.5% in 2013 ). The expected volatility is based on the historic share price volatility over a period similar to the life of the options. 

Compensation expense for these options amounted to $2.2for fiscal 2014 ($2.0 in 2013 ). 

