Westjet 2013 Annual Report Download - page 88

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WestJet Annual Report 2013 88
Notes to Consolidated Financial Statements
As at and for the years ended December 31, 2013 and 2012
(Stated in thousands of Canadian dollars, except percentage, ratio, share and per share amounts)
12. Share capital (continued)
(d) Key employee plan
The Corporation has a key employee plan (KEP), whereby restricted share units (RSU) are issued to senior management 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 date of grant. 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. At December 31, 2013,
944,738 (2012 – 947,398) voting shares of the Corporation were reserved for issuance under the KEP plan. For the year ended
December 31, 2013, the Corporation settled 2,660 and 156,610 RSUs with shares issued from treasury and purchased through
the open market, respectively.
2013 2012
Number of
units
Weighted fair
value
Number of
units
Weighted fair
value
Units outstanding, beginning of year
465,417
14.52


Granted 168,571 21.92  
Units, in lieu of dividends 7,612 24.75  
Settled (159,270) 14.27 
Forfeited (6,227) 14.49 
Units outstanding, end of year
476,103
17.39


(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. At December 31, 2013, 1,011,927 (2012 – 1,023,507) 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 vesting 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 vesting 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.
The Corporation intends to settle all RSUs and PSUs 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.
2013 2012
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 214,168 14.54 254,515 14.41    
Granted
68,205
21.82
82,635
21.89




Units, in lieu of
dividends 713 25.24 959 24.97 ––––
Settled
(71,765)
14.00
(68,893)
13.64


(50,087)
13.28
Forfeited (19,237) 14.70 (25,649) 14.70 – –  
Units outstanding,
end of year 192,084 17.35 243,567 17.18    
85 9 6
7 0 3)
4 1 73
46 0 6
22 0 2
5 5)
3 1 12
5 0 5
0 6 84
s
47 4 7)
2 8 )
60 1 )
47 4 7)
2) 6) 6)
0) 1) 9)
5) 7 )
2 8 )
) 3 )