The Canadian Transportation Agency has concluded that the proposed restructuring of the share capital of WestJet will continue to meet the Canadian ownership and control requirements as defined in the Canada Transportation Act.
To reduce international investors' inconveniences in buying and selling WestJet shares and to ensure WestJet's continuous compliance with the requirements to qualify as Canadian, WestJet management and Board of Directors have recommended to shareholders the introduction of a variable voting share structure. Under the proposed share reclassification, Variable Voting Shares and Common Voting Shares will replace existing WestJet Common Shares. The Variable Voting Shares would only be owned or controlled by Non-Canadians and will carry one vote per share unless the number of Variable Voting Shares represented at the relevant time exceeded 25% of all WestJet voting shares, in which case, the vote attached to the Variable Voting Share would decrease proportionately so that the Variable Voting Shares would never collectively carry more than 25% of the vote at any shareholders' meeting. The Common Voting Shares would only be owned and controlled by Canadians and would always carry one vote per share. All other rights, privileges, conditions and restrictions of the Variable Voting Shares and the Common Voting Shares remain the same as the existing WestJet Common Shares.
Assuming approval of the share reclassification, a person may purchase either Variable Voting Shares or Common Voting Shares, but will need to immediately convert (through a broker if held in a brokerage account) any shares they are not qualified to hold to those they are qualified to hold. For example, a Canadian can purchase Variable Voting Shares, but must convert those shares to Common Voting Shares. Similarly, a Non-Canadian can purchase Common Voting Shares, but must have those shares promptly converted to Variable Voting Shares.
In addition, there are a number of collateral by-law changes relating primarily to the share restructuring which have been proposed to shareholders for consideration at the meeting.
It is expected that if shareholders approve the share reclassification at the August 30, 2005 meeting, the Variable Voting Shares and the Common Voting Shares will replace the Common Shares on the Toronto Stock Exchange during the first week of September, 2005.