Westjet 2005 Annual Report Download - page 57

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2005 WESTJET ANNUAL REPORT
55
(f) Stock-based compensation:
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model.
The following weighted average assumptions were used to determine the fair market value of options granted during
the years ended December 31:
2005 2004
Weighted average fair market value per option $ 5.26 $ 5.83
Average risk-free interest rate 3.4% 3.7%
Average volatility 43% 45%
Expected life (years) 3.7 3.5
Dividend per share $ 0.00 $ 0.00
Employee stock option compensation expense is included in flight operations and general and administration expenses
and totaled $17,604,000 (2004 - $12,305,000), net of repurchase of $320,000 (2004 – $NIL) as noted in 7(c).
(g) Contributed surplus:
Changes to contributed surplus were as follows:
2005 2004
Balance, beginning of year $ 21,977 $ –
Stock-based compensation – adoption – 10,117
Stock-based compensation expense 17,604 12,305
Stock-options exercised (488) (445)
Balance, end of year $ 39,093 $ 21,977