JetBlue Airlines 2010 Annual Report Download - page 75

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Crewmember Stock Purchase Plan: Our CSPP, which is available to all employees, had 5.1 million
shares of our common stock initially reserved for issuance at its inception in April 2002. Through 2008, the
reserve automatically increased 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. The CSPP was
amended in 2008 to eliminate this automatic reload feature and, by its terms, terminates no later than the last
business day of April 2012.
The CSPP has a series of successive overlapping 6-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. Employees may contribute up to 10% of their pay, through payroll deductions, toward
the purchase of common stock. Purchase dates occur on the last business day of April and October each year.
Effective May 1, 2007, all new CSPP participation is considered non-compensatory following the
elimination of the 24-month offering period and the reduction of the purchase price discount from 15% to 5%.
Participants previously enrolled were allowed to continue to purchase shares in their compensatory offering
periods until those offering periods expired in 2008.
Prior to the 2007 amendment, if the fair market value per share of our common stock on any purchase
date within a particular offering period was less than the fair market value per share on the start date of that
offering period, then the participants in that offering period were automatically transferred and enrolled in the
new two-year offering period which began 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 sale of 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 95% 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:
Shares
Weighted
Average Shares
Weighted
Average Shares
Weighted
Average
2010 2009 2008
Available for future purchases,
beginning of year ............... 22,169,558 23,550,382 20,076,845
Shares reserved for issuance ......... — — 5,447,803
Common stock purchased........... (1,245,599) $5.96 (1,380,824) $4.82 (1,974,266) $4.65
Available for future purchases, end of
year ......................... 20,923,959 22,169,558 23,550,382
The compensation topic of the Codification requires that deferred taxes be recognized on temporary
differences that arise with respect to stock-based compensation attributable to nonqualified stock options and
awards. However, no tax benefit is recognized for stock-based compensation attributable to incentive stock
options (ISO) or CSPP shares until there is a disqualifying disposition, if any, for income tax purposes. A
portion of our stock-based compensation is attributable to ISO and CSPP shares; therefore, our effective tax
rate is subject to fluctuation.
LiveTV Management Incentive Plan. In April 2009, our Board of Directors approved the LiveTV
Management Incentive Plan, or MIP, an equity based incentive plan for certain members of leadership at our
wholly-owned subsidiary, LiveTV. Notional equity units are available under the MIP, representing up to 12%
of the notional equity interest of LiveTV, with the award value based on the increase in the value of the
LiveTV entity over time subject to certain adjustments. Awards are payable in cash upon the achievement of
certain events, or in February 2013, whichever is first. Compensation cost will be recorded ratably over the
service period ending in 2012. As of December 31, 2010, we have recorded approximately $2 million as a
liability related to the outstanding awards we expect to ultimately vest, including an estimate for pre-vesting
forfeitures. During 2010, approximately $2 million of previously accrued awards under the MIP were settled
in cash.
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