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54 2006 | WestJet Annual Report
10. Commitments and contingencies (continued):
(b) Employee profi t share:
Th e Corporation has an employee profi t sharing plan whereby eligible employees participate in the pre-tax operating income
of the Corporation. The profi t share ranges from a minimum of 10% to a maximum of 20% of earnings before employee profi t
share and income taxes. The amounts paid under the plan are subject to prior approval by the Board of Directors.
(c) Contingencies:
On April 4, 2004, Air Canada commenced a lawsuit against the Corporation. Air Canada claimed damages in the amount of
$220 million in an amendment to its Statement of Claim. On May 29, 2006, as a full settlement, the Corporation agreed to pay
Air Canada’s investigation and litigation costs incurred of $5.5 million and accepted Air Canada’s request that the Corporation
make a donation in the amount of $10 million in the name of Air Canada and the Corporation to children’s charities across the
country. Air Canada accepted the Corporation’s apology and withdrew its claims in light of this settlement. All legal proceedings
between the parties have been terminated. These amounts and other settlement costs totalling $15,600,000 have been paid
as at December 31, 2006, and have been included in non-recurring expenses.
A Statement of Claim was also fi led by Jetsgo Corporation in the Ontario Superior Court on October 15, 2004, against the
Corporation, an offi cer, and a former offi cer (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
benefi t 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 declared bankruptcy. As a
result, this action has been stayed and no further steps can be taken in the litigation unless a court order is obtained.
The Corporation is party to other legal proceedings and claims that arise during the ordinary course of business. It is the
opinion of management that the ultimate outcome of these and any outstanding matters will not have a material effect upon
the Corporation’s fi nancial position, results of operations or cash fl ows.
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)