Spirit Airlines 2014 Annual Report Download - page 73

Notes to Financial Statements—(Continued)
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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. 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. As of
December 31, 2014 and 2013, there were no shares of non-voting common stock outstanding.
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, 2014 and 2013,
there were no shares of preferred stock outstanding.
8. Stock-Based Compensation
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.
On May 9, 2011, the Company's board of directors adopted, and the Company's stockholders approved, the 2011 Equity
Incentive Award Plan, or 2011 Plan. Under the 2011 Plan, 3,000,000 new shares of common stock are reserved for issuance
pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights or SARs, restricted
stock awards, restricted stock unit awards, deferred stock awards, dividend equivalent awards, stock payment awards and
performance share awards and other stock-based awards, plus the number of shares remaining available for future awards under
the Company's 2005 Stock Plan. The number of shares reserved for issuance or transfer pursuant to awards under the 2011 Plan
will be increased by the number of shares represented by awards outstanding under the Company's 2005 Stock Plan that are
forfeited or lapse unexercised and which, following the effective date of the 2011 Plan, are not issued under the Company's
2005 Stock Plan. No further awards will be granted under the 2005 Stock Plan, and all outstanding awards will continue to be
governed by their existing terms. As of December 31, 2014 and December 31, 2013, 2,682,457 and 2,789,276 shares of the
Company’s common stock, respectively, remained available for future issuance under the 2011 Plan.
Stock-based compensation cost is included within salaries, wages and benefits in operating expenses in the
accompanying statements of operations. Stock-based compensation cost amounted to $8.8 million, $5.7 million and $4.3