JetBlue Airlines 2008 Annual Report Download - page 67

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2006
CSPP
Expected term (years) ............................................ 0.5-2.0
Volatility ...................................................... 44.5%
Risk-free interest rate ............................................ 5.0%
Weighted average fair value of purchase rights .......................... $ 3.75
Unrecognized stock-based compensation expense was approximately $24 million as of December 31,
2008, relating to a total of two million unvested restricted stock units and five million unvested stock options
under our 2002 Plan. We expect to recognize this stock-based compensation expense over a weighted average
period of approximately two years. The total fair value of stock options vested during the years ended
December 31, 2008, 2007 and 2006 was approximately $9 million, $6 million and $2 million, respectively.
Stock Incentive Plan: The 2002 Plan, which includes stock options issued during 1999 through 2001
under a previous plan as well as all options issued since, provides for incentive and non-qualified stock
options and restricted stock units to be granted to certain employees and members of our Board of Directors,
as well as deferred stock units to be granted to members of our Board of Directors. The 2002 Plan became
effective following our initial public offering in April 2002.
During 2007, we began issuing restricted stock units under the 2002 Plan. These awards will vest in
annual installments over three years or upon the occurrence of a change in control as defined in the 2002 Plan.
Our policy is to grant restricted stock units based on the market price of the underlying common stock on the
date of grant.
The following is a summary of restricted stock unit activity for the year ended December 31, 2008:
Shares
Weighted
Average
Grant Date
Fair Value
Nonvested at beginning of year ................................. 71,418 $10.42
Granted ................................................... 1,799,849 6.12
Vested .................................................... (23,805) 10.42
Forfeited .................................................. (111,791) 6.35
Nonvested at end of year ...................................... 1,735,671 $ 6.22
During 2008, we also began issuing deferred stock units under the 2002 Plan. These awards will vest
immediately upon being granted to members of the Board of Directors. During the year ended December 31,
2008, we granted 70,000 deferred stock units at a weighted average grant date fair value of $5.00, all of which
remain outstanding at December 31, 2008.
Prior to January 1, 2006, stock options under the 2002 Plan became exercisable when vested, which
occurred in annual installments of three to seven years. For issuances under the 2002 Plan beginning in 2006,
we revised the vesting terms so that all options granted vest in equal installments over a period of three or five
years, or upon the occurrence of a change in control. All options issued under the 2002 Plan expire ten years
from the date of grant. Our policy is to grant options with an exercise price equal to the market price of the
underlying common stock on the date of grant.
58