Spirit Airlines 2012 Annual Report Download - page 73

Notes to Financial Statements—(Continued)
Non-Voting Common Stock
Dividend Rights. Holders of the Company’s non-voting common stock are entitled to receive dividends, if any, as may be declared from time to time by the
Company’s board of directors out of legally available funds ratably with shares of the Company’s common stock, subject to preferences that may be applicable to any then
outstanding preferred stock and limitations under Delaware law.
Voting Rights. Shares of the Company’s non-voting common stock are not entitled to vote on any matters submitted to a vote of the stockholders, including the
election of directors, except to the extent required under Delaware law.
Conversion Rights . Shares of the Company’s non-voting common stock will be convertible on a share-for-share basis into common stock at the election of the holder
subject to the Company remaining in compliance with applicable foreign ownership limitations.
Liquidation. In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s non-
voting common stock will be entitled to share ratably
with shares of the Company’s common stock in the net assets legally available for distribution to stockholders after the payment of all of the Company’s debts and other
liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock.
Rights and Preferences. Holders of the Company’s non-voting common stock have no preemptive, subscription or other rights, and there are no redemption or sinking
fund provisions applicable to the Company’s common stock. The rights, preferences and privileges of the holders of the Company’
s common stock are subject to and may be
adversely affected by, the rights of the holders of shares of any series of the Company’s preferred stock that the Company may designate in the future.
On December 7, 2011, the Company entered into a Stock Distribution Agreement with Indigo Miramar LLC and its members. Pursuant to the Stock Distribution
Agreement 10,576,180 shares of outstanding common stock were exchanged on a share-for-share basis for shares of non-voting common stock. As of December 31, 2012 ,
the number of outstanding non-voting common stock had decreased to 1,669,205 . In February 2013, all of the remaining outstanding shares of non-voting common stock
were converted to voting shares in accordance with the Stock Distribution Agreement.
Preferred Stock
The Company’s board of directors has the authority, without further action by the Company’s stockholders, to issue up to 10,000,000 shares of preferred stock in one
or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights,
voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of
which may be greater than the rights of common stock. The Company’s issuance of preferred stock could adversely affect the voting power of holders of common stock and
the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying,
deferring or preventing a change of control of the Company or other corporate action. As of December 31, 2012 and 2011 , there were no shares of preferred stock
outstanding.
Prior to the Company’s IPO and related recapitalization on June 1, 2011, there were issued and outstanding 100,000 shares of Class A preferred stock, 2,850 shares of
Class B preferred stock, 20,848,847 shares of Class A common stock and 5,964,489 shares of Class B common stock. In the recapitalization consummated on June 1, 2011,
all shares of preferred stock and all notes not repaid with the net proceeds received by the Company in the IPO were exchanged for shares of common stock in accordance
with the Recapitalization Agreement. In addition, each share of Class B common stock was exchanged for one share of common stock. See Note 18.
The Company has stock plans under which directors, officers, key employees, and consultants of the Company may be granted restricted stock awards, stock options
and other equity-based instruments as a means of promoting the Company’s long-term growth and profitability. The plans are intended to encourage participants to
contribute to and participate in the success of the Company.
The Company's board of directors adopted, and the Company's stockholders approved, the Amended and Restated 2005 Incentive Stock Plan, or the 2005 Stock Plan,
effective January 1, 2008. The total number of shares of common stock authorized for issue pursuant to awards granted under the 2005 Stock Plan was 2,500,000
shares. The
2005 Stock Plan provided for the grant of non-qualified stock options, stock appreciation rights, restricted stock, performance shares, phantom stock, restricted stock units
and other awards that are valued in whole or in part by reference to the Company's stock.
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8. Stock-
Based Compensation