JetBlue Airlines 2003 Annual Report Download - page 65

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JETBLUE AIRWAYS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2003
Note 7—Stock-Based Compensation
Crewmember Stock Purchase Plan: Our crewmember stock purchase plan, or CSPP, is available to
all employees and was adopted in February 2002, with 3.4 million shares of our common stock initially
reserved for issuance. The reserve will automatically increase each January by an amount equal to 3%
of the total number of shares of our common stock outstanding on the last trading day in December of
the prior calendar year. In no event will any such annual increase exceed 6.1 million shares. The plan
will terminate no later than the last business day of April 2012.
The plan has a series of successive overlapping 24-month offering periods, with a new offering
period beginning on the first business day of May and November each year. Employees can only join
an offering period on the start date and participate in one offering period at a time. Employees may
contribute up to 10% of their pay, through payroll deductions, toward the purchase of common stock at
the lower of 85% of the fair market value per share at the beginning of the offering period or on the
purchase date. Purchase dates occur on the last business day of April and October each year.
If the fair market value per share of our common stock on any purchase date within a particular
offering period is less than the fair market value per share on the start date of that offering period,
then the participants in that offering period will automatically be transferred and enrolled in the new
two-year offering period which will begin on the next business day following such purchase date and the
related purchase of shares.
Should we be acquired by merger or sale of substantially all of our assets or more than 50% of our
outstanding voting securities, then all outstanding purchase rights will automatically be exercised
immediately prior to the effective date of the acquisition at a price equal to the lower of 85% of the
market value per share on the start date of the offering period in which the participant is enrolled or
85% of the fair market value per share immediately prior to the acquisition.
The following is a summary of CSPP share reserve activity for the years ended December 31:
2003 2002
Weighted Weighted
Shares Average Shares Average
Available for future purchases, beginning of year ...... 3,010,923 —
Shares reserved for issuance(1) ................... 2,869,128 3,375,000
Common stock purchased ...................... (853,229) $11.08 (364,077) $10.20
Available for future purchases, end of year .......... 5,026,822 3,010,923
(1) On January 1, 2004, the number of shares reserved for issuance was increased by 3,062,073 shares.
The fair value of each purchase right is estimated at the inception of each offering period using
the Black-Scholes option pricing model. The following table shows our assumptions and weighted
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