Westjet 1999 Annual Report Download - page 26

(c) Performance shares:
The performance shares are held by management and key employees of the
Corporation. These performance shares are convertible at the option of the
holder into common shares of the Corporation on the basis of one performance
share for each $1.86 of convertible amount. The convertible amount is
calculated as being 5% of the net earnings of the Corporation up to maximum
net earnings of $25,668,000. Net earnings is defined as net income after tax for
each fiscal year as per the audited financial statements in accordance with
generally accepted accounting principles, less an imputed interest charge on
new equity invested.
The interest charge is calculated as the aggregate of 20% times each amount of
new equity invested, times the number of days that the new equity was available
to the Corporation, divided by the number of days in the year. At the Annual
and Special Meeting of the Shareholders held on June 21, 1999, the
shareholders approved a six month deferral of this calculation with respect to
any new equity funds raised. The holders of the performance shares shall, on a
cumulative basis, be entitled to convert to a maximum of one-third of the
performance shares following each of the three fiscal years, beginning with the
completion of the 1997 fiscal year. The cumulative convertible amount is to be
allocated in proportion to the holders' percentage of outstanding performance
shares. The right to convert expires 90 days following issuance of audited
financial statements on the third fiscal year from the commencement date,
termination of employment or the death of the shareholder.
As at December 31, 1999, 333,644 (1998 - 118,252) performance shares are
eligible for conversion. These shares must be converted by June 2000 or the
right to convert expires.
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WestJet Airlines 1999 Annual Report
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