Air Canada 2007 Annual Report Download - page 119

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Consolidated Financial Statements and Notes
119
Performance Share Units
The Long-term Incentive Plan also includes Performance Share Units (“PSUs”). The value of the PSUs is based on the fair
market value of the shares at the time of the grant. The vesting term of PSUs is three years, generally commencing on
January 1 of the year following granting, and incorporate performance vesting features based upon achieving the average
Earnings Per Share target established over the vesting period. Subject to vesting and other conditions, each PSU shall entitle
the employee to receive a payment in the form of one common share, cash in the amount equal to market value of one
common share, or a combination thereof, at the discretion of the Board of Directors. The terms of the plan specify that upon
the retirement of an employee, the number of PSUs that vest will be prorated based on the total number of completed
months of active service during the PSU vesting term.
The number of PSUs granted to employees and the related compensation expense were as follows:
2007 2006
Compensation expense ($millions) $ 2 $ -
Number of PSUs granted 232,760 345,805
Weighted average fair value per PSU granted ($) $ 16.46 $ 19.40
Aggregate fair value of PSUs granted $ 4 $ 7
During the year 27,314 PSUs were forfeited (2006 – nil).
Jazz Long-Term Incentive Plan
Jazz provides certain of its employees with unit based compensation plans. The Jazz segment recorded compensation
expense of $1 for the period ended May 24, 2007 (2006 - $2) related to this plan. The units under this plan relate to units
in Jazz Air Income Fund. Effective May 24, 2007, Jazz is no longer consolidated.
Employee Ownership Plans
Employee ownership plans have been established for shares of ACE and Air Canada under which eligible employees are
allowed to invest up to 6% of their base salary for the purchase of shares on the secondary market. Air Canada will
match 33.3% of the investments made by the employee. During 2007, the Corporation recorded compensation expense of
$1 (2006 - $2).