Mitch Cronin Posted March 10, 2004 Share Posted March 10, 2004 "Under the new Trinity plan: o Current retirees would not be affected; o All current non-unionized employees would have the freedom to choose to stay under the DB regime or transfer to a DC plan as of January 1, 2005; o A 10% bonus would be paid, concurrent to an IPO of a restructured Air Canada, to all employees who convert from a DB to DC system, provided that the aggregate pool does not exceed 10% of the IPO; and o New hires would automatically fall under the new DC plan. Can anyone de-mystify that bold text for me? Thanks, in advance, to anyone who tries... Link to comment Share on other sites More sharing options...
Guest neo Posted March 10, 2004 Share Posted March 10, 2004 Piece o' cake. You see, Mitch, a long, long time ago, when the universe was just getting started, light was sent from those galaxies and is only now arriving here... oh, wrong explanation. Hmmm... concurrent IPO, and aggregate pools... are you sure you wouldn't just know about cosmology? It's easier. "...concurrent to an IPO of a restructured Air Canada..." ...just means that when Air Canada comes out of CCAA, they will issue new stock. A large quantity of that stock will be owned by Mr. Li, some will be distributed to creditors in lieu of the money they were owed, and some will be sold to the public. (IPO = Initial Public Offering) "...provided that the aggregate pool does not exceed 10% of the IPO..." When the stock goes up for sale to the public in that IPO, those employees who switched from the DB plan to the DC plan will receive a 10% bonus in the form of AC stock. (At this time, only non-unionized employees are addressed in this plan.) The amount of the bonus paid to all the employees collectively may not exceed 10% of the amount of the IPO. For example, if the IPO offers 10 million shares of The New Air Canada Corporation, the maximum available to the employees who switch will be 1 million shares. That's how I understood it, anyway. Does anyone else have a different perspective? neo Link to comment Share on other sites More sharing options...
Mitch Cronin Posted March 10, 2004 Author Share Posted March 10, 2004 Hmmmm.... Thanks Neo... So... how is the number of shares in that "IPO" determined? Or, what kinds of variables might effect that? Any idea? I guess I'm just trying to get a handle on what the chances might be that 10% (and I'm presuming that's 10% of one's annual salary?) could actually be the "bonus"? I can be bought! Or is it likely that 10% will only be watered down if all of us were to opt for the DC plan - which certainly doesn't seem likely, especially if so many of us aren't even being offered a choice... I wonder if these questions are feeding into someone's poker game some more?... They could have made it a bit clearer, after all, couldn't they? Or do you suppose they've assumed we all know these answers? ... no, I reckon they want us asking questions... maybe I should shut up. Thanks for the answers Richard. BTW... hang tough on the BC wine bit... No way I'd give'em that one! Link to comment Share on other sites More sharing options...
Guest neo Posted March 10, 2004 Share Posted March 10, 2004 "...how is the number of shares in that "IPO" determined?" We're getting into some business esoterica here, but my understanding is that it's an important judgment call on the part of senior management and the BOD. They will be ably advised by investment bankers, lawyers, etc, because there are quite a few things to consider when you set the quantity and price of the initial share offering. Variables that affect the choice? Probably dozens that I don't know about, but some simple ones might be quality of the assets that underlie the shares, liabilities (such as debts, pension obligations, etc) forward outlook, regulatory requirements, and the like. On that last one, Air Canada has some special legal constraints on its ownership, so something like that might need to be considered. Well, right off the bat you're asking the right question on the offer as presented: this bonus is 10% of what, exactly? And how is that bonus going to be paid to you? Logic suggests that it should be 10% of some pension-related amount. To put it bluntly, Mr. Li is telling those employees, "Reduce my liability/costs here, and I will reward you over here." That's how I read it, anyway. How will the bonus be paid? I don't know. Would there be a reason why they would want to pay it into your DC plan, rather than give it to you in hand? If so, you couldn't touch the money now. Good questions, for sure. As for the behind-the-scenes poker playing, I haven't a clue. But I'll share a little irony with you. All the players in this game: Trinity Time Investments, Air Canada, and its unions have all the numbers in front of them. They all knows the pension situation down to a T, I'm sure. The only group that's in the dark, so to speak, are the employee-beneficiaries. neo Link to comment Share on other sites More sharing options...
Mitch Cronin Posted March 10, 2004 Author Share Posted March 10, 2004 Kokey cow! Thanks for all that Richard... Link to comment Share on other sites More sharing options...
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