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50 2006 | WestJet Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
WestJet Airlines Ltd.
Years ended December 31, 2006 and 2005
(Tabular Amounts are Stated in Thousands of Dollars, Except Share and Per Share Data)
Under the terms of the Corporation’s Stock Option Plans, a cashless settlement alternative is available
whereby option holders can either (a) elect to receive shares by delivering cash to the Corporation or (b) elect
to receive a number of shares equivalent to the difference between the market value of the options and the
aggregate exercise price. For the year ended December 31, 2006, option holders exercised 433,129 (2005 –
3,151,923) options on a cashless settlement basis and received 73,589 (2005 – 979,089) shares.
In 2005, certain executives holding total options of 66,724, at an exercise price of $11.99, offered the
Corporation an opportunity to purchase and cancel their options in consideration of payment by the
Corporation in cash for a fi xed price of $320,000. The agreements were accepted by the Corporation and
the options were cancelled.
(d) Per share amounts:
The following table summarizes the shares used in calculating net earnings per share:
2006 2005
Weighted average number of shares outstanding - basic 129,585,403 128,031,694
Effect of dilutive employee stock options 124,321 392,408
Weighted average number of shares outstanding – diluted 129,709,724 128,424,102
For the year ended December 31, 2006, a total of 12,823,662 (2005 – 8,672,329) options were not included in
the calculation of dilutive potential shares as the result would be anti-dilutive.
(e) Employee Share Purchase Plan:
The Corporation has an Employee Share Purchase Plan (ESPP) whereby the Corporation matches every
dollar contributed by each employee. Under the terms of the ESPP, employees may contribute up to a
maximum of 20% of their gross pay and acquire voting shares of the Corporation at the current fair market
value of such shares.
The Corporation has the option to acquire voting shares on behalf of employees through open market
purchases or to issue new shares from treasury at the current market price. For the period January to October
2005, shares under the ESPP were issued from treasury at the current market price. Subsequent to this
period and continuing throughout 2006, the Corporation elected to purchase these shares through the open
market and will continue to review this option in the future. For the year ended December 31, 2006, $NIL (2005
– $35,410,000) of voting shares were issued from treasury, of which $NIL (2005 - $17,705,000) represented
the Corporation’s matching contribution for employee contributions, for which no cash was exchanged.
7. Share capital (continued):
(c) Stock Option Plans (continued):
The following table summarizes the options outstanding and exercisable at December 31, 2006:
Outstanding options Exercisable options
Weighted
average Weighted Weighted
Range of Number remaining average Number average
exercise prices outstanding life (years) exercise Price exercisable exercise Price
$9.74 – $11.28 2,283,929 0.44 $ 11.19 2,222,540 $ 11.21
$11.81 – $13.80 5,944,711 3.31 11.84 69,045 12.12
$14.13 – $18.41 6,817,561 1.94 15.08 2,554,651 15.78
15,046,201 2.25 $ 13.21 4,846,236 $ 13.63