Westjet 2015 Annual Report Download - page 86

Notes to Consolidated Financial Statements
As at and for the years ended December 31, 2015 and 2014
(Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts)
WestJet Annual Report 2015 | 84
11. Share capital (continued)
(b) Issued and outstanding
2015
2014
Number
Amount
Number
Amount
Common and variable voting shares:
Balance, beginning of period
127,690,868
603,287
128,625,420
603,861
Issuance of shares pursuant to compensation plans
115,299
1,833
500,598
6,177
Shares repurchased
(4,719,690)
(22,324)
(1,435,150)
(6,751)
Balance, end of period
123,086,477
582,796
127,690,868
603,287
At December 31, 2015, the number of common voting shares outstanding was 109,089,643 (December 31, 2014 – 107,998,929)
and the number of variable voting shares was 13,996,834 (December 31, 2014 – 19,691,939).
On May 8, 2015, the Corporation filed a notice with the TSX to make a normal course issuer bid to purchase outstanding shares
on the open market. As approved by the TSX, the Corporation is authorized to purchase up to 2,000,000 common voting shares
and variable voting shares (representing approximately 1.6 per cent of the Corporation’s issued and outstanding shares at the
time of the bid) during the period May 13, 2015 to May 12, 2016, or until such time as the bid is completed or terminated at the
Corporation’s option. The filing was subsequently amended to increase the maximum number of shares authorized for
repurchase to 4,000,000 shares and was approved by the TSX on July 28, 2015 (collectively, the 2015 bid). Any shares
purchased under this bid are purchased on the open market at the prevailing market price at the time of the transaction.
Common voting shares and variable voting shares acquired under this bid are cancelled.
On May 5, 2014, the Corporation filed a notice with the TSX to make a normal course issuer bid to purchase outstanding shares
on the open market. The bid expired on May 7, 2015, with the Corporation purchasing and cancelling all 2,000,000 of the shares
it was authorized to purchase.
During the year ended December 31, 2015, the Corporation purchased and cancelled a total of 4,719,690 shares (December 31,
2014 – 1,435,150) for total consideration of $123,813 (December 31, 2014 – $39,431). The average book value of the shares
repurchased was $4.73 per share (December 31, 2014 – $4.70) and was charged to share capital. The excess of the market
price over the average book value, including transaction costs, was $101,489 (December 31, 2014 – $32,680) and was charged
to retained earnings.
(c) Stock option plan
The Corporation has a stock option plan, whereby at December 31, 2015, 9,109,276 (2014 – 9,224,575) voting shares were
reserved for issuance to officers and employees of the Corporation, subject to the following limitations:
(i) the number of voting shares reserved for issuance to any one optionee will not exceed 5% of the issued and outstanding
voting shares at any time;
(ii) the number of voting shares reserved for issuance to insiders shall not exceed 10% of the issued and outstanding voting
shares; and
(iii) the number of voting shares issuable under the stock option plan, which may be issued within a one-year period, shall not
exceed 10% of the issued and outstanding voting shares at any time.
Stock options are granted at a price equal to the five day weighted average market value of the Corporation’s voting shares
preceding the date of grant and vest completely or on a graded basis on the first, second and third anniversary from the date of
grant. Stock options expire no later than seven years from the date of grant.
The fair value of options granted and the assumptions used in their determination are as follows:
2015
2014
Weighted average fair value per option
4.83
4.55
Weighted average risk-free interest rate
0.95%
1.5%
Weighted average expected volatility
27%
27%
Expected life of options (years)
3.8
3.8
Weighted average dividend yield
1.7%
1.6%