Westjet 2005 Annual Report Download - page 59

2005 WESTJET ANNUAL REPORT
57
9. Commitments and contingencies:
(a) Aircraft:
The Corporation has remaining commitments to purchase 10 737-600s and nine 737-700s to be delivered over the
course of 2006 through to 2008.
The Corporation has signed an agreement with Aviation Partners Boeing to install Blended Winglet Technology on certain
of the Corporation’s committed Boeing Next-Generation aircraft, including leased aircraft.
The Corporation has an agreement with LiveTV to install, maintain and operate live satellite television on all aircraft
with the ability to cancel installing the system on future aircraft deliveries, subject to certain applicable penalties.
This agreement contains an exclusivity clause which expires on July 1, 2009.
The Corporation has signed an agreement with Bell ExpressVu for a seven-year term to provide satellite programming.
The agreement commenced in 2004 and can be renewed for an additional five years.
The remaining estimated amounts to be paid in deposits and purchase prices in US dollars relating to the purchases of
the remaining aircraft, live satellite television systems and winglets are $368,154,000 for 2006, $143,540,000 for 2007
and $110,809,000 for 2008.
The Corporation also has an agreement to purchase a Next-Generation flight simulator, where remaining instalments
for 2006 is $3,640,000.
(b) Employee profit share:
The Corporation has an employee profit sharing plan whereby eligible employees participate in the pre-tax operating
income of the Corporation. The profit share ranges from a minimum of 10% to a maximum of 20% of earnings before
employee profit share and income taxes. The amounts paid under the plan are subject to prior approval by the Board
of Directors.
(c) Contingencies:
An Amended Fresh as Amended Statement of Claim was filed by Air Canada and ZIP Air Inc. in the Ontario Superior
Court on March 11, 2005 (amending the original Statement of Claim filed on April 6, 2004) against the Corporation, two
officers, two employees, two former officers, and one former employee (the “Defendants”). The principal allegations are
that the Defendants unlawfully obtained confidential flight load and load factor information from Air Canada’s employee
travel website and, as a result, the Plaintiffs are seeking disgorgement of any incremental revenue, profits and other
benefits acquired by the Defendants as a result of having access to the alleged confidential information. The Plaintiffs are
claiming disgorgement, damages for the tort of spoliation and punitive damages in the aggregate amount of $220 million,
but the Plaintiffs have provided no meaningful details or evidence to substantiate their claim for disgorgement and damages.
A Statement of Claim was also filed by Jetsgo Corporation in the Ontario Superior Court on October 15, 2004 against
the Corporation, an officer, and a former officer (the “Defendants”). The principal allegations are that the Defendants
conspired together to unlawfully obtain Jetsgo’s proprietary information and to use this proprietary information to harm
Jetsgo and benefit the Corporation. The Plaintiff is seeking damages in an amount to be determined plus $50 million,
but the Plaintiff has provided no details or evidence to substantiate its claim. On May 13, 2005 Jetsgo Corporation