JetBlue Airlines 2014 Annual Report Download - page 60

JETBLUE AIRWAYS CORPORATION-2014Annual Report54
PART II
ITEM 8Financial Statements and Supplementary Data
As of December 31, 2014, a total of approximately 1.4 million shares of our
common stock, which were lent to our share borrower pursuant to the terms
of our share lending agreement as described in Note 2, were issued and
outstanding for corporate law purposes. Holders of the borrowed shares
have all the rights of a holder of our common stock. However, because
the share borrower must return all borrowed shares to us, or identical
shares or, in certain circumstances of default by the counterparty, the
cash value thereof, the borrowed shares are not considered outstanding
for the purpose of computing and reporting basic or diluted earnings per
share. The fair value of similar common shares not subject to our share
lending arrangement based upon our closing stock price at December 31,
2014, was approximately $22 million.
NOTE 7 Share-Based Compensation
We have various equity incentive plans under which we have granted
stock awards to our eligible Crewmembers and members of our Board
of Directors. These include the JetBlue Airways Corporation 2002 Stock
Incentive Plan, and the Restated and Amended 2002 Stock Incentive Plan
which were replaced by the JetBlue Airways Corporation 2011 Incentive
Compensation Plan. We additionally have an employee stock purchase
plan which we refer to as the Crewmember Stock Purchase Plan, or CSPP,
that is available to all eligible Crewmembers.
Unrecognized stock-based compensation expense was approximately
$13 million as of December 31, 2014, and related to a total of 3.8 million
unvested restricted stock units, or RSUs, under our 2011 Plan. We expect
to recognize this stock-based compensation expense over a weighted
average period of approximately two years.
2011 Incentive Compensation Plan
At our Annual Shareholders Meeting held on May 26, 2011, our shareholders
approved the JetBlue Airways Corporation 2011 Incentive Compensation
Plan, or 2011 Plan. This replaced the Restated and Amended 2002 Stock
Incentive Plan, or 2002 Plan, which was set to expire at the end of 2011.
Upon inception, the 2011 Plan had 15.0 million shares of our common
stock reserved for issuance. The 2011 Plan, by its terms, will terminate
no later than May 2021. The RSUs vest in annual installments over three
years which can be accelerated upon the occurrence of a change in
control. Under this plan, we grant RSUs to certain Crewmembers and
members of our Board of Directors. Our policy is to grant RSUs based
on the market price of the underlying common stock on the date of grant.
Under this plan we grant deferred stock units, or DSUs, to members of
our Board of Directors and performance stock units, or PSUs, to certain
members of our executive leadership team.
The 2011 Plan was amended and restated effective January 1, 2014,
to include the definition of retirement eligibility. Once a Crewmember
meets the definition they will continue to vest their shares as if they
remained employed by JetBlue, regardless of their actual employment
status with the Company. In accordance with the Compensation-Stock
Compensation topic of the Codification, the grant’s explicit service
condition is non-substantive and the grant has effectively vested at the
time retirement eligibility is met.
The following is a summary of RSU activity under the 2011 Plan for the year ended December 31:
2014 2013 2012
Shares
Weighted
Average
Grant Date
Fair Value Shares
Weighted
Average
Grant Date
Fair Value Shares
Weighted
Average
Grant Date
Fair Value
Nonvested at beginning of year 4,118,849 $ 5.94 2,483,664 $ 5.77 65,914 $ 5.08
Granted 1,930,851 8.62 2,653,842 6.08 2,570,891 5.79
Vested (1,903,229) 5.97 (828,291) 5.77 (20,249) 5.09
Forfeited (361,385) 7.02 (190,366) 5.82 (132,892) 5.83
NONVESTED AT END OF YEAR 3,785,086 $ 7.18 4,118,849 $ 5.94 2,483,664 $ 5.77
The total intrinsic value, determined as of the date of vesting, for all RSUs
under both Plans that vested and converted to shares of common stock
during the year ended December 31, 2014, 2013 and 2012 was $23million,
$13 million and $11 million respectively.
The vesting period for DSUs under the 2011 Plan is either one or
three years of service. Once vested, shares are issued six months
and one day following the Director’s departure from the Board. During
the years ended December 31, 2014, 2013 and 2012, we granted an
immaterial amount of DSUs, almost all of which remain outstanding at
December 31, 2014. In 2014 and 2013, we granted immaterial PSUs
to members of our executive leadership team which are based upon
certain performance criteria.
Amended and Restated 2002 Stock
Incentive Plan
The 2002 Plan included stock options issued during 1999 through 2001
under a previous plan as well as all options issued from 2002 through
adoption of the 2011 Plan. It provided for incentive and non-qualified
stock options and RSUs to be granted to certain Crewmembers and
members of our Board of Directors. Additionally, it provided for DSUs to
be granted to members of our Board of Directors. The 2002 Plan became
effective following our initial public offering in April 2002. We began issuing
RSUs from 2007 and DSUs from 2008. Prior to 2011, the DSUs vested
immediately upon being granted. The RSUs vested in annual installments
over three years which could be accelerated upon the occurrence of a
change in control as defined in the 2002 Plan. Our policy to grant RSUs
was based on the market price of the underlying common stock on the
date of grant. No additional grants were made from this plan after the
adoption of the 2011 Plan.