Westjet 2009 Annual Report Download - page 97

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WestJet 2009 Annual Report 67
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
For the years ended December 31, 2009 and 2008
(Stated in thousands of Canadian dollars, except share and per share data)
The Corporation has not incorporated an estimated forfeiture rate for stock options that will not vest. Rather, the Corporation accounts for actual
forfeitures as they occur.
(f) 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. Shares acquired for the ESPP are restricted 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 Corporation’s voting shares for the fi ve trading days immediately preceding the employee’s notice to
the Corporation.
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, which is determined based on the volume weighted average trading price of the Corporation’s voting shares
for the fi ve trading days preceding the issuance.
(e) Stock option compensation
As new options are granted, the fair value of the options is expensed over the vesting period, with an offsetting entry to contributed surplus. The
fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Upon the exercise of stock options,
consideration received, together with amounts previously recorded in contributed surplus, is recorded as an increase to share capital.
For the year ended December 31, 2009, stock-based compensation expense related to stock options included in fl ight operations and navigational
charges, and marketing, general and administration expenses totalled $12,045 (2008 – $12,597).
The fair value of options granted during the year ended December 31, 2009 and 2008, and the assumptions used in their determination are as
follows:
10. Share capital (continued)
(d) Stock option plan (continued)
The following table summarizes the options outstanding and exercisable as at December 31, 2009:
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 5,084,673 0.38 $ 11.81 5,023,365 $ 11.82
$12.00 – $14.99 2,987,619 3.29 12.49 82,918 12.40
$15.00 – $16.50 1,529,041 1.35 16.41 1,522,602 16.42
$16.51 – $19.99 1,920,511 2.34 16.72 18,640 19.12
11,521,844 1.59 $ 13.42 6,647,525 $ 12.90
2009 2008
Weighted average fair value per option $ 3.82 $ 5.24
Weighted average risk-free interest rate 1.7% 3.0%
Weighted average volatility 39% 37%
Expected life (years) 3.6 3.6
Dividends per share $ — $ —