JetBlue Airlines 2004 Annual Report Download - page 66

JETBLUE AIRWAYS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2004
Note 4—Stockholders’ Equity
Effective with our initial public offering, our authorized shares of capital stock were increased to
500 million shares of common stock and 25 million shares of preferred stock, and all outstanding shares
of our convertible redeemable preferred stock were converted to common stock on a one-for-one basis.
The holders of our common stock are entitled to one vote per share on all matters which require a
vote by the Company’s stockholders as outlined in the articles of incorporation and the by-laws.
We distributed 34.0 million shares and 31.8 million shares for our November 2003 and December
2002 three-for-two stock splits, respectively. All common share and per share data for periods
presented in the accompanying consolidated financial statements and notes thereto give effect to these
stock splits.
On July 15, 2003, we completed a public offering of 4.5 million shares of our common stock at
$28.33 per share, raising net proceeds of $122.5 million, after deducting discounts and commissions
paid to the underwriters and other expenses incurred in connection with the offering. Net proceeds
were invested in short-term, investment-grade, interest-bearing instruments.
Unvested shares of common stock purchased by certain members of management in 1998 were
subject to repurchase by the Company upon their termination at the original purchase price. At
December 31, 2004 and 2003, all 8.9 million shares were fully vested and at December 31, 2002,
7.2 million shares were vested under these agreements.
Pursuant to our Stockholder Rights Agreement, which became effective in February 2002, each
share of common stock has attached to it a right and, until the rights expire or are redeemed, each new
share of common stock issued by the Company will include one right. Upon the occurrence of certain
events, each right entitles the holder to purchase one one-thousandth of a share of Series A
participating preferred stock at an exercise price of $53.33, subject to further adjustment. The rights
become exercisable only after any person or group acquires beneficial ownership of 15% or more (25%
or more in the case of certain Investors) of the Company’s outstanding common stock or commences a
tender or exchange offer that would result in such person or group acquiring beneficial ownership of
15% or more (25% or more in the case of certain Investors) of the Company’s common stock. If after
the rights become exercisable, the Company is involved in a merger or other business combination or
sells more than 50% of its assets or earning power, each right will entitle its holder (other than the
acquiring person or group) to receive common stock of the acquiring company having a market value
of twice the exercise price of the rights. The rights expire on April 17, 2012 and may be redeemed by
the Company at a price of $.01 per right prior to the time they become exercisable.
As of December 31, 2004, we had a total of 30.3 million shares of our common stock reserved for
issuance under our Crewmember Stock Purchase Plan, our Stock Incentive Plan and for our 31⁄2%
convertible notes.
Note 5—LiveTV
Purchased technology, which is an intangible asset related to our September 2002 acquisition of
the membership interests of LiveTV, is being amortized over six years based on the average number of
aircraft expected to be in service as of the date of acquisition. Projected amortization expense is $10.9
million in 2005, $13.1 million in 2006, $15.5 million in 2007 and $14.7 million in 2008.
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