Westjet 2008 Annual Report Download - page 84

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80 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)
(g) 2007 Restricted share units
The Corporation has a cash-settled restricted share unit (RSU) plan, whereby up to a maximum of 2,000,000 RSUs may be issued to executive
offi cers of the Corporation. Each RSU entitles a participant to receive cash equal to the market value of the equivalent number of shares of
the Corporation. Compensation expense is accrued over the vesting period of the RSU. Fluctuations in the market value are recognized in
the period in which the fl uctuations occur. For the year ended December 31, 2008 no 2007 RSUs were granted (2007 – 68,058) with $75 of
compensation expense being recovered (2007 – $736 expense) and included as a deduction to marketing, general and administration expense
and accounts payable and accrued liabilities and other liabilities. As at December 31, 2008 68,058 (2007 – 68,058) 2007 RSUs are outstanding,
all of which are scheduled to vest in 2010.
(h) Deferred share units
The Corporation has a cash-settled deferred share unit (DSU) plan as an alternative form of compensation for the independent Board of Directors.
Each DSU entitles a participant to receive cash equal to the market value of the equivalent number of shares of the Corporation. The number
of DSUs granted is determined based on the closing price of the Corporation’s common shares on the TSX on the trading day immediately prior
to the date of grant. Total compensation expense is recognized at the time of grant. Fluctuations in the market value are recognized in the
period in which the fl uctuations occur. For the year ended December 31, 2008, 15,192 DSUs were granted (2007 – 2,299), with $180 of expense
(2007 – $49) included in marketing, general and administration expense and accounts payable and accrued liabilities. DSUs are redeemable
upon the Director’s retirement from the Board. As at December 31, 2008, 17,491 (2007 – 2,299) DSUs are vested and outstanding.
(i) 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 years ended December 31, 2008 and 2007, the Corporation elected to purchase these shares
through the open market and will continue to review this option in the future. Current market price for shares issued from treasury is
determined based on the weighted average trading price of the common shares on the TSX for the fi ve trading days preceding the issuance.
Shares acquired for the ESPP are held in trust for one year. Employees may offer to sell shares, which have not been held for at least one year
to the Corporation, four times per year. The purchase price of the voting shares shall be equal to 50% of the weighted average trading price of
the shares on the TSX for the fi ve days preceding the employee’s notice to the Corporation.
The Corporation’s share of the contributions in 2008 amounted to $42,937 (2007 – $35,449) and is recorded as compensation expense within the
related business unit.