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78 WestJet 2008 Annual Report
notes to consolidated
fi nancial statements
For the years ended December 31, 2008 and 2007
(Stated in thousands of Canadian dollars, except share and per share data)
8. Share capital (continued)
(d) Stock option plan
The Corporation has a stock option plan, whereby up to a maximum of 12,622,734 (2007 – 12,016,887) common and variable voting shares may
be issued to offi cers and employees of the Corporation subject to the following limitations:
(i) the number of common voting shares reserved for issuance to any one optionee will not exceed 5% of the issued and outstanding common
and variable voting shares at any time;
(ii) the number of common voting shares reserved for issuance to insiders shall not exceed 10% of the issued and outstanding common and
variable voting shares; and
(iii) the number of common voting shares issuable under the stock option plans, which may be issued within a one-year period, shall not exceed
10% of the issued and outstanding common and variable voting shares at any time.
Stock options are granted at a price that equals the market value of the Corporation’s common shares, have a term of between four and fi ve
years and vest on either the fi rst, second or third anniversary from the date of grant.
Changes in the number of options, with their weighted average exercise prices, are summarized below:
Under the terms of the Corporation’s stock option plan, a cashless settlement alternative is available, whereby option holders can either
(i) elect to receive shares by delivering cash to the Corporation in the amount of the options, or (ii) elect to receive a number of shares equivalent
to the market value of the options over the exercise price. For the year ended December 31, 2008, option holders exercised 1,998,926 options
(2007 – 4,139,944) on a cashless settlement basis and received 332,730 shares (2007 – 1,049,752). For the year ended December 31, 2008, 14,364
options (2007 – 136,630) were exercised on a cash basis.
The following table summarizes the options outstanding and exercisable as at December 31, 2008:
2008 2007
Number of options
Weighted average
exercise price Number of options
Weighted average
exercise price
Stock options outstanding, beginning of year 12,226,232 $ 13.66 15,046,201 $ 13.21
Granted 1,974,485 16.68 1,689,773 16.45
Exercised (2,013,290) 15.08 (4,276,574) 13.19
Forfeited (90,891) 13.24 (226,909) 13.24
Expired (178,368) 14.93 (6,259) 15.97
Stock options outstanding, end of year 11,918,168 $ 13.90 12,226,232 $ 13.66
Exercisable, end of year 7,849,131 $ 12.87 4,425,763 $ 14.93
Outstanding options Exercisable options
Range of
exercise prices
Number
outstanding
Weighted average
remaining life (years)
Weighted average
exercise price
Number
exercisable
Weighted average
exercise price
$ 9.00 – $11.99 5,383,388 1.32 $ 11.81 4,906,882 $ 11.82
$12.00 – $14.99 3,037,811 0.39 14.53 2,934,657 14.60
$15.00 – $16.50 1,548,322 2.35 16.41 4,100 16.26
$16.51 – $19.99 1,948,647 3.35 16.72 3,492 19.37
11,918,168 1.55 $ 13.90 7,849,131 $ 12.87