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Notes to Consolidated Financial Statements
For the years ended December 31, 2012 and 2011
(Stated in thousands of Canadian dollars, except share and per share amounts)
12. Share capital (continued)
(d) Key employee and pilot plan
The Corporation has a key employee and pilot (KEP) plan, whereby restricted share units (RSU) are issued to key employees and
pilots of the Corporation. The fair market value of the RSUs at the time of grant is equal to the weighted average trading price
of the Corporation’s voting shares for the five trading days immediately preceding the grant date. Each RSU entitles the
employee to receive payment upon vesting in the form of voting shares of the Corporation. The Corporation intends to settle all
RSUs with shares either through the purchase of voting shares on the open market or the issuance of new shares from treasury;
however, wholly at its own discretion, the Corporation may settle the units in cash. The RSU’s time vest at the end of a two or
three-year period, with compensation expense being recognized in net earnings over the service period. As at December 31,
2012, 947,398 (2011 – 979,021) voting shares of the Corporation were reserved for issuance under the KEP plan. For the year
ended December 31, 2012, the Corporation settled 31,610 and 87,058 RSUs with shares issued from treasury and through the
open market, respectively.
2012
2011
Number of
units
Weighted fair
value
Number of
units
Weighted fair
value
Units outstanding, beginning of year
171,129
12.77
Granted
Units, in lieu of dividends
Settled
Forfeited
Units outstanding, end of year
Vested, end of year
–
–
–
–
(e) Executive share unit plan
The Corporation has an equity-based executive share unit (ESU) plan, whereby RSUs and performance share units (PSU) may be
issued to senior executive officers. As at December 31, 2012, 1,023,507 (2011 – 959,425) voting shares of the Corporation were
reserved for issuance under the ESU plan.
The fair market value of the RSUs and PSUs at the time of grant is equal to the weighted average trading price of the
Corporation’s voting shares for the five trading days immediately preceding the grant date.
Each RSU entitles the senior executive officers to receive payment upon exercise in the form of voting shares of the Corporation.
RSUs time vest over a period of up to three years, with compensation expense being recognized in net earnings over the service
period.
Each PSU entitles the senior executive officers to receive payment upon exercise in the form of voting shares of the Corporation.
PSUs time vest over a period of up to three years and incorporate performance criteria established at the time of grant.
Compensation expense is recognized in net earnings over the service period based on the number of units expected to vest.
2012
2011
RSUs
PSUs
RSUs
PSUs
Number
of units
Weighted
fair value
Number
of units
Weighted
fair value
Number
of units
Weighted
fair value
Number
of units
Weighted
fair value
Units outstanding,
beginning of year
Granted
Settled
(50,087)
13.28
–
–
Forfeited
–
–
Units outstanding,
end of year
Vested, end of year
–
–
–
–
WestJet 2012 Annual Report
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