Spirit Airlines, Inc.
Spirit Airlines, Inc. (Form: DEF 14A, Received: 04/28/2015 11:03:05)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________________
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
________________________________________________________________________
 
Filed by the Registrant   ý                              Filed by a Party other than the Registrant   ¨
Check the appropriate box:
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Preliminary Proxy Statement
 
 
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Definitive Proxy Statement
 
 
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Definitive Additional Materials
 
 
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Soliciting Material under §240.14a-12
SPIRIT AIRLINES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
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SPIRIT AIRLINES, INC.
2800 Executive Way
Miramar, Florida 33025
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 16, 2015
To the Stockholders of Spirit Airlines, Inc.:
Notice Is Hereby Given that the Annual Meeting of Stockholders (“Annual Meeting”) of Spirit Airlines, Inc., a Delaware corporation (the “Company”), will be held on June 16, 2015 , at 9:00 a.m. local time, at the Hilton Rosemont Chicago O'Hare, 5550 North River Road, Rosemont, Illinois 60018 , for the following purposes:
1.
To elect the following three Class I directors to hold office until the 2018 annual meeting of stockholders or until their successors are elected: Robert D. Johnson, Barclay G. Jones III and Dawn M. Zier;
2.
To ratify the selection, by the Audit Committee of the Board of Directors, of Ernst & Young LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2015 ;
3.
To approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in the attached Proxy Statement pursuant to executive compensation disclosure rules under the Securities Exchange Act of 1934, as amended;
4.
To approve the Company's 2015 Incentive Award Plan; and
5.
To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. Only stockholders who owned our common stock at the close of business on April 17, 2015 (the “Record Date”) can vote at this meeting or any adjournments or postponements thereof.
Our Board of Directors recommends that you vote “FOR” the election of the director nominees named in Proposal No. 1 of the Proxy Statement, “FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm as described in Proposal No. 2 of the Proxy Statement,“FOR” the approval, on a non-binding, advisory basis, of the compensation of our named executive officers as described in Proposal No. 3 of the Proxy Statement and "FOR" the approval of our 2015 Incentive Award Plan as described in Proposal No. 4 of the Proxy Statement.
For our Annual Meeting, we have elected to use the Internet as our primary means of providing our proxy materials to stockholders. Consequently, most stockholders will not receive paper copies of our proxy materials. We will instead send to these stockholders a Notice of Internet Availability of Proxy Materials with instructions for accessing the proxy materials, including our Proxy Statement and Annual Report to Stockholders, and for voting via the Internet. The Notice of Internet Availability of Proxy Materials also provides information on how stockholders may obtain paper copies of our proxy materials free of charge, if they so choose. The electronic delivery of our proxy materials will significantly reduce our printing and mailing costs and the environmental impact of the proxy materials.
The Notice of Internet Availability of Proxy Materials will also provide the date, time and location of the Annual Meeting; the matters to be acted upon at the meeting and the recommendation of the Board of Directors with regard to each matter; a toll-free number, an e-mail address and a website where stockholders can request a paper or email copy of the Proxy Statement, our Annual Report to Stockholders and a form of proxy relating to the Annual Meeting; information on how to access the form of proxy; and information on how to attend the meeting and vote in person.


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You are cordially invited to attend the Annual Meeting, but whether or not you expect to attend in person, you are urged to vote and submit your proxy by following the voting procedures described in the Notice of Internet Availability of Proxy Materials or on the proxy card.
By Order of the Board of Directors
 
/s/ Thomas Canfield
Thomas Canfield
Secretary
Miramar, Florida
April 28, 2015


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SPIRIT AIRLINES, INC.
2800 Executive Way
Miramar, Florida 33025
PROXY STATEMENT
FOR THE 2015 ANNUAL MEETING OF STOCKHOLDERS
JUNE 16, 2015
The Board of Directors of Spirit Airlines, Inc. is soliciting your proxy to vote at the Annual Meeting of Stockholders to be held on June 16, 2015 , at 9:00 a.m. , local time, and any adjournment or postponement of that meeting (the “Annual Meeting”). The Annual Meeting will be held at the Hilton Rosemont Chicago O'Hare, 5550 North River Road, Rosemont, Illinois 60018 .
We have elected to use the Internet as our primary means of providing our proxy materials to stockholders. Accordingly, on or about April 28, 2015, we are making this Proxy Statement and the accompanying proxy card, Notice of Annual Meeting of Stockholders and Annual Report to Stockholders available on the Internet and mailing a Notice of Internet Availability of Proxy Materials to stockholders of record as of April 17, 2015 (the “Record Date”). Brokers and other nominees who hold shares on behalf of beneficial owners will be sending their own similar notice. All stockholders as of the Record Date will have the ability to access the proxy materials on the website referred to in the Notice of Internet Availability of Proxy Materials or request to receive a printed set of the proxy materials. Instructions on how to request a printed copy by mail or electronically, including an option to request paper copies on an ongoing basis, may be found in the Notice of Internet Availability of Proxy Materials and on the website referred to in the notice. We intend to mail this Proxy Statement, together with the accompanying proxy card, to those stockholders entitled to vote at the Annual Meeting who have properly requested paper copies of such materials within three business days of request.
The only voting securities of Spirit Airlines, Inc. are shares of common stock, par value $0.0001 per share (the “common stock”), of which there were 72,986,762 shares outstanding as of the Record Date (excluding any treasury shares). We need the holders of a majority in voting power of the shares of common stock issued and outstanding and entitled to vote, present in person or represented by proxy, to hold the Annual Meeting.
In this Proxy Statement, we refer to Spirit Airlines, Inc. as the “Company,” “Spirit,” “we” or “us” and the Board of Directors as the “Board.” When we refer to Spirit’s fiscal year, we mean the twelve-month period ending December 31 of the stated year. Agreements, plans and other documents referenced to in this Proxy Statement are to be qualified in their entirety by reference to the actual full text of such agreements, plans and other documents.
The Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (“SEC”), is available in the “Financials” section of our website at http://ir.spirit.com . You also may obtain a copy of the Company’s Annual Report on Form 10-K, without charge, by contacting: Secretary, c/o Spirit Airlines, Inc., 2800 Executive Way, Miramar, FL 33025.























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THE PROXY PROCESS AND STOCKHOLDER VOTING
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Who can vote at the Annual Meeting?
Only stockholders of record at the close of business on April 17, 2015 will be entitled to vote at the Annual Meeting. At the close of business on the Record Date, there were 72,986,762 shares of common stock issued and outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If, on April 17, 2015 , your shares were registered directly in your name with the transfer agent for our common stock, Wells Fargo Shareowner Services, then you are a stockholder of record. As a stockholder of record, you may vote in person at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card or vote by proxy over the telephone or on the Internet as instructed below to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent
If, on April 17, 2015 , your shares were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid proxy card from your broker or other agent.
What am I being asked to vote on?
You are being asked to vote “FOR”:
the election of the following three Class I directors to hold office until our 2018 annual meeting of stockholders: Robert D. Johnson, Barclay G. Jones III and Dawn. M. Zier;
the ratification of the selection, by the Audit Committee of the Board, of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015 ;
the approval, on a non-binding, advisory basis, of the compensation of our named executive officers; and
the approval of our 2015 Incentive Award Plan.
In addition, you are entitled to vote on any other matters that are properly brought before the Annual Meeting.
How do I vote?
You may vote by mail or follow any alternative voting procedure described on the proxy card or the Notice of Internet Availability of Proxy Materials. To use an alternative voting procedure, follow the instructions on each proxy card that you receive or on the Notice of Internet Availability of Proxy Materials.
For the election of directors, you may either vote “FOR” each of the three nominees or you may withhold your vote for any nominee you specify. For the ratification of the selection of the Company’s independent auditors, the non-binding, advisory vote to approve named executive officer compensation and the approval of the 2015 Incentive Award Plan, you may vote “FOR” or “AGAINST” or abstain from voting.

The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at the Annual Meeting. Alternatively, you may vote by proxy over the Internet or, if you properly request and receive a proxy card by mail or email, by signing, dating and returning the proxy card, over the Internet or by telephone. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. Even if you have submitted a proxy before the Annual Meeting, you may still attend the Annual Meeting and vote in person. In such case, your previously submitted proxy will be disregarded.

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To vote by proxy over the Internet, follow the instructions provided in the Notice of Internet Availability of Proxy Materials or on the proxy card.
To vote by telephone, if you properly requested and received a proxy card by mail or email, you may vote by proxy by calling the toll free number found on the proxy card.
To vote by mail, if you properly requested and received a proxy card by mail or email, complete, sign and date the proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
To vote in person, come to the Annual Meeting, and we will give you a ballot when you arrive.
Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Agent
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a voting instruction card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the voting instruction card to ensure that your vote is counted. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact your broker, bank or other agent to request a proxy form.
Who counts the votes?
Broadridge Financial Solutions, Inc. (“Broadridge”) has been engaged as our independent agent to tabulate stockholder votes. If you are a stockholder of record, and you choose to vote over the Internet or by telephone, Broadridge will access and tabulate your vote electronically. If you choose to sign and mail your proxy card, your executed proxy card is returned directly to Broadridge for tabulation. As noted above, if you hold your shares through a broker, your broker (or its agent for tabulating votes of shares held in street name, as applicable) returns one proxy card to Broadridge on behalf of all its clients.
How are votes counted?
With respect to Proposal No. 1, the election of directors, the three nominees receiving the highest number of votes will be elected. With respect to Proposal Nos. 2, 3 and 4, the affirmative vote of the holders of a majority in voting power of the shares of common stock which are present in person or by proxy and entitled to vote on each proposal is required for approval.
Brokers who hold shares in street name for the accounts of their clients may vote such shares either as directed by their clients or, in the absence of such direction, in their own discretion if permitted by the stock exchange or other organization of which they are members. If your shares are held by a broker on your behalf, and you do not instruct the broker as to how to vote these shares on Proposal No. 2, the broker may exercise its discretion to vote for or against that proposal in the absence of your instruction. With respect to Proposal Nos. 1, 3 and 4, the broker may not exercise discretion to vote on those proposals. This would be a “broker non-vote” and these shares will not be counted as having been voted on the applicable proposal. However, broker non-votes will be considered present and entitled to vote at the Annual Meeting and will be counted towards determining whether or not a quorum is present. Please instruct your bank or broker so your vote can be counted .
If stockholders abstain from voting, these shares will be considered present and entitled to vote at the Annual Meeting and will be counted towards determining whether or not a quorum is present. Abstentions will have no effect with regard to Proposal No. 1 and, with regard to Proposal Nos. 2, 3 and 4, will have the same effect as an “AGAINST” vote.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you own as of April 17, 2015 .
How do I vote via Internet or telephone?
You may vote by proxy via the Internet by following the instructions provided in the Notice of Internet Availability of Proxy Materials or on the proxy card. If you properly request and receive printed copies of the proxy materials by mail, you may vote by proxy by calling the toll-free number found on the proxy card. Please be aware that if you vote over the Internet or by telephone, you may incur costs such as telephone and Internet access charges, as applicable, for which you will be responsible. The Internet and telephone voting facilities for eligible stockholders of record will close at 11:59 p.m. Eastern Time on June 15, 2015. The giving of such a telephonic or Internet proxy will not affect your right to vote in person should you decide to attend the Annual Meeting.
The telephone and Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions and to confirm that stockholders’ instructions have been recorded properly.

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What if I return a proxy card but do not make specific choices?
If we receive a signed and dated proxy card and the proxy card does not specify how your shares are to be voted, your shares will be voted “FOR” the election of each of the three nominees for director, “FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm, “FOR” the approval, on a non-binding, advisory basis, of named executive officer compensation and "FOR" the approval of our 2015 Incentive Award Plan. If any other matter is properly presented at the Annual Meeting, your proxy ( i.e. , one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors, officers and employees may also solicit proxies in person, by telephone or by other means of communication. Directors, officers and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one set of materials?
If you receive more than one set of materials, your shares are registered in more than one name or are registered in different accounts. In order to vote all the shares you own, you must follow the instructions for voting on each Notice of Internet Availability of Proxy Materials or the proxy card that you receive by mail or email pursuant to your request, which include instructions for voting over the Internet, by telephone or by signing, dating and returning any of such proxy cards.

Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:
You may submit another properly completed proxy over the Internet, by telephone or by mail with a later date.
You may send a written notice that you are revoking your proxy to our Secretary at 2800 Executive Way, Miramar, Florida 33025.
You may attend the Annual Meeting and vote in person. Simply attending the Annual Meeting will not, by itself, revoke your proxy.
If your shares are held by your broker, bank or other agent, you should follow the instructions provided by them.
When are stockholder proposals due for next year’s Annual Meeting?
To be considered for inclusion in the proxy materials for next year’s annual meeting, your proposal must be submitted in writing by December 30, 2015, to our Secretary at 2800 Executive Way, Miramar, Florida 33025; provided that if the date of that annual meeting is more than thirty (30) days before or more than sixty (60) days after the first anniversary of the Annual Meeting, the deadline will be a reasonable time before we begin to print and send our proxy materials for next year’s annual meeting. If you wish to submit a proposal that is not to be included in the proxy materials for next year’s annual meeting pursuant to the SEC’s shareholder proposal procedures or to nominate a director, you must do so between February 17, 2016 and March 18, 2016; provided that if the date of that annual meeting is earlier than May 17, 2016 or later than August 15, 2016, you must give notice not earlier than the 120 th day prior to the annual meeting date and not later than the 90 th day prior to the annual meeting date or, if later, the 10 th day following the day on which public disclosure of the annual meeting date is first made. You are also advised to review our Amended and Restated Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if the holders of a majority in voting power of the shares of common stock issued and outstanding and entitled to vote are present in person or represented by proxy at the Annual Meeting. On the Record Date, there were 72,986,762 shares outstanding and entitled to vote. Accordingly, not less than 36,493,382 shares must be represented by stockholders present at the Annual Meeting or by proxy to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy vote or vote at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, either the

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chairperson of the Annual Meeting or a majority in voting power of the stockholders entitled to vote at the Annual Meeting, present in person or represented by proxy, may adjourn the Annual Meeting to another time or place.
How can I find out the results of the voting at the Annual Meeting?
Voting results will be announced by the filing of a Current Report on Form 8-K within four business days after the Annual Meeting. If final voting results are unavailable at that time, we will file an amended Current Report on Form 8-K within four business days of the day the final results are available.


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PROPOSAL NO. 1:
ELECTION OF DIRECTORS
The Board is comprised of nine (9) members. In accordance with our Amended and Restated Certificate of Incorporation, the Board is divided into three classes with staggered three-year terms. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election.
Presently, our directors are divided among the three classes as follows:
Class I directors: Robert D. Johnson, Barclay G. Jones III and Stuart I. Oran , whose terms will expire at the Annual Meeting;
Class II directors: Carlton D. Donaway, David G. Elkins and Horacio Scapparone, whose terms will expire at the annual meeting of stockholders to be held in 2016; and
Class III directors: B. Ben Baldanza, Robert L. Fornaro and H. McIntyre Gardner, whose terms will expire at the annual meeting to be held in 2017.
Any additional directorships resulting from an increase in the number of directors would be distributed among the three classes so that, as nearly as possible, each class would consist of one-third of the directors.
The division of the Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.
Mr. Oran's term as a Class I director will expire at the Annual Meeting and he has decided not to seek re-election. On April 22, 2015, based on the recommendations of the Nominating and Corporate Governance Committee and pursuant to the Company's Amended and Restated Bylaws, the Board nominated Dawn M. Zier to stand for election at the Annual Meeting as a Class I director.
Accordingly, Robert D. Johnson, Barclay G. Jones III and Dawn M. Zier have been nominated and each has consented to being named in this proxy statement and to serve as Class I directors upon their election at the Annual Meeting. Each director to be elected will hold office until the third subsequent annual meeting of stockholders or until his or her successor is elected and has been qualified, or until such director’s earlier death, resignation or removal.
Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named above. In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as the Board may propose. Each person nominated for election has agreed to serve if elected, and management has no reason to believe that any nominee will be unable to serve.
Directors are elected by a plurality of the votes cast at the meeting. Pursuant to the Company's corporate governance guidelines, any director nominee who receives a greater number of votes withheld from his or her election than votes for such election must submit his or her resignation for consideration by the Nominating and Corporate Governance Committee. The Board will then act after considering the Nominating and Corporate Governance Committee's recommendation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE ELECTION OF EACH NAMED NOMINEE.

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The following table sets forth, for the Class I nominees and our other current directors who will continue in office after the Annual Meeting, information with respect to their ages and position/office held with the Company:
 
Name
 
Age
 
Position/Office Held With the Company
Class I Directors whose terms expire at the 2015 Annual Meeting of Stockholders
 
 
 
 
Robert D. Johnson (2) (4)
 
67
 
Director
Barclay G. Jones III (2) (3)
 
54
 
Director
Stuart I. Oran (2) (3)
 
64
 
Director
Class II Directors for election at the 2016 Annual Meeting of Stockholders
 
 
 
 
Carlton D. Donaway (3) (4)
 
63
 
Director
David G. Elkins (1)
 
73
 
Director
Horacio Scapparone (1) (3)
 
63
 
Director
Class III Directors whose terms expire at the 2017 Annual Meeting of Stockholders
 
 
 
 
B. Ben Baldanza (4)
 
53
 
President, Chief Executive Officer and Director
Robert L Fornaro (1) (4)
 
62
 
Director
H. McIntyre Gardner (2)
 
53
 
Director and Chairman of the Board
 
(1)    Member of the Compensation Committee of the Board.
(2)    Member of the Audit Committee of the Board.
(3)    Member of the Nominating and Corporate Governance Committee of the Board.
(4)    Member of the Safety, Security and Operations Committee of the Board.
If elected as a Class I director at the Annual Meeting, Ms. Zier will serve as a member of the Audit Committee effective June 16, 2015.
Set forth below is biographical information for the nominees and each person whose term of office as a director will continue after the Annual Meeting. The following includes certain information regarding our directors’ individual experience, qualifications, attributes and skills that led the Board to conclude that they should serve as directors.
Nominees for Election to a Three-Year Term Expiring at the 2018 Annual Meeting of Stockholders
Robert D. Johnson has been a member of the Board since July 2010. Mr. Johnson retired in 2008 as Chief Executive Officer of Dubai Aerospace Enterprise (DAE), a global aerospace engineering and services company. In 2005, prior to DAE, Mr. Johnson was Chairman of Honeywell Aerospace, a leading global supplier of aircraft engines, equipment, systems and services, where he also served prior to 2005 as President and Chief Executive Officer. Prior to Honeywell Aerospace, Mr. Johnson held management positions at various aviation and aerospace companies. He served on the board of directors of Ariba, Inc., a publicly traded software company, from 2005 to 2012, and currently serves on the board of directors of Spirit Aerosystems, a publicly traded aerospace components company that is not affiliated with Spirit Airlines, and Roper Industries, Inc., a publicly traded diversified industrial company. The Board has concluded that Mr. Johnson should continue to serve on the Board and on the Audit and Safety, Security and Operations Committees because of his experience in the aviation and aerospace industries, his financial expertise and his general business knowledge.
Barclay G. Jones III has been a member of the Board since 2006. Since March 2000, Mr. Jones has been the Executive Vice President of Investments for iStar Financial Inc., a publicly traded finance company focused on the commercial real estate industry. Prior to iStar, Mr. Jones was at W.P. Carey & Co., an investment management company, where he served in a variety of capacities, including Vice Chairman and Chief Acquisitions Officer. The Board has concluded that Mr. Jones should continue to serve on the Board and on the Audit and Nominating and Corporate Governance Committees based on his financial expertise and his general business experience.

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Dawn M. Zier will become a member of the Board effective June 16, 2015, if elected by our stockholders at our Annual Meeting. Since November 2012, Ms. Zier has served as President and Chief Executive Officer of Nutrisystem Inc., a commercial provider of weight loss products and services, and as a member of its board of directors. Before joining Nutrisystem, Ms. Zier served as the President of International at the Reader's Digest Association, Inc., a global media and direct marketing company (the "Reader's Digest Association"), from April 2011 to November 2012 and as an Executive Vice President of the Reader's Digest Association from February 2011 to November 2012. From October 2009 to April 2011, Ms. Zier served as President, Europe of the Reader's Digest Association. Prior to serving in these roles, she served as the President of Global Consumer Marketing for the Reader's Digest Association from June 2008 to October 2009 and as the President and Chief Executive Officer of Direct Holdings U.S. Corp., a marketer of audio and video products and at such time a subsidiary of the Reader's Digest Association, from June 2009 to October 2009. From August 2005 to June 2008, Ms. Zier served as the President of North American Consumer Marketing for the Reader's Digest Association. RDA Holding Co., the holding company and parent of Reader's Digest Association, underwent a reorganization under Chapter 11 of the U.S. Bankruptcy Code beginning in 2013. Ms. Zier also served on the Direct Marketing Education Foundation's Board of Trustees from October 2010 to October 2012 and on the Direct Marketing Association's Board of Directors from October 2008 to present, and also as its Secretary from October 2012 to October 2014. From 2005 to 2009, she chaired the Magazine's Director's Advisory Committee for the Audit Bureau of Circulations. The Board has concluded that Ms. Zier should serve on the Board and on the Audit Committee based on her leadership, consumer marketing expertise and general business experience.
Directors Continuing in Office Until the 2016 Annual Meeting of Stockholders
Carlton D. Donaway has been a member of the Board since January 2013. Since 2004, Mr. Donaway has been the principal and Chairman of JSKD Advisors LLC, a consulting firm. From 2004 to 2008, Mr. Donaway was an advisor to Cerberus Capital Management, L.P. (“Cerberus”), a private investment firm, and to Cerberus Operations and Advisory Company, an affiliate of Cerberus that offers senior management and advisory services. Prior to working with Cerberus, Mr. Donaway served as Executive Chairman of DHL Holdings-USA, a division of Deutsche Post DHL that provides international express and mail services. He was also Chairman and Chief Executive Officer of Airborne, Incorporated, a global transportation and logistics company. Mr. Donaway served as a board member and Chairman of Anchor Glass Container Corporation, a glass container manufacturer, from November 2004 to June 2005. In August of 2005, Anchor Glass Container Corporation filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Mr. Donaway also served as a board member of ACE Aviation Holdings, an investment holding company for various aviation interests, from 2004 to 2008. The Board has previously concluded that Mr. Donaway should serve on the Board and on the Nominating and Corporate Governance and Safety, Security and Operations Committees based on his knowledge of the aviation industry, experience in operational and governance matters, leadership and general business experience.
David G. Elkins has been a member of the Board since July 2010. Mr. Elkins retired in 2003 as President and Co-Chief Executive Officer of Sterling Chemicals, Inc., a North American chemicals producer headquartered in Houston, Texas. Prior to joining Sterling Chemicals in 1998, Mr. Elkins was a senior partner in the law firm of Andrews Kurth LLP, where he specialized in corporate and business law. Mr. Elkins formerly served as an independent director of numerous public and private corporations, including The Houston Exploration Company, Holley Performance Products, Inc. (non-executive Chairman), Pliant Corporation, Zilog, Inc., Sterling Chemicals, Inc., Guilford Mills, Inc., Pioneer USA, Inc. and Memorial Hermann Hospital System. Mr. Elkins currently serves on the Development Board of the University of Texas at Arlington. The Board has previously concluded that Mr. Elkins should serve on the Board and on the Compensation Committee based on his experience with corporate and financial transactions, corporate governance expertise, human resources and executive compensation expertise and business leadership experience .
Horacio Scapparone has been a member of the Board since 2006. From 1997 until 2012, he served as Chief Executive Officer of the Bristol Group, an Argentine insurance group dedicated to property and casualty and surety businesses. From 2002 to 2007, he was a board member and Chairman of Alpargatas SAIC, a large Argentine textile company sold in 2007 to a Brazilian textile company. In 2007 Alpargatas filed for protection under Argentinean bankruptcy law. The Board has previously concluded that Mr. Scapparone should serve on the Board and on the Compensation and Nominating and Corporate Governance Committees, based on his financial expertise, general business experience and familiarity with Latin America.

Directors Continuing in Office Until the 2017 Annual Meeting of Stockholders
B. Ben Baldanza has been a member of the Board since May 2006. He has served as our President and Chief Executive Officer ("CEO") since May 2006 and as our President and Chief Operating Officer from January 2005 to May 2006. From August 1999 to January 2005, Mr. Baldanza served as Senior Vice President of Marketing and Planning at US Airways, where he was responsible for route planning, scheduling, pricing and revenue management, marketing, sales, cargo, distribution and the international division. Prior to US Airways, Mr. Baldanza served as Managing Director and Chief Operating Officer of Grupo Taca, an airline group based in Latin America. Mr. Baldanza previously held positions at Continental Airlines,

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Northwest Airlines and American Airlines. The Board has previously concluded that Mr. Baldanza should serve on the Board and on the Safety, Security and Operations Committee based on his experience in the airline industry and due to his position as CEO.
Robert L. Fornaro has been a member of the Board since May 2014. He served as a consultant to Southwest Airlines Co. and AirTran Airways Inc., a subsidiary of AirTran Holdings Inc., from May 2011 through April 2014. Mr. Fornaro served as the President and Chief Executive Officer of AirTran Holdings Inc. from November 2007 to May 2011. He also served as President and Chief Operating Officer of AirTran Airways Inc. from March 2001 to November 2007 and as President and Chief Financial Officer from March 1999 to August 2000. From February 1998 to March 1999, Mr. Fornaro served as a consultant in the airline industry. From 1992 to February 1998, he served as Senior Vice President of Planning for US Airways. Prior to that, he served as Senior Vice President of Marketing Planning at Northwest Airlines from 1988 to 1992. He served as the Chairman of AirTran Airways Inc. from May 2008 to May 2011 and served on its board from 2001 to May 2011. He served as Chairman of the Board of AirTran Holdings Inc. from 2008 to May 2011. The Board has previously concluded that Mr. Fornaro should serve on the Board and on the Compensation and Safety, Security and Operations Committees based on his business skills, experience in the airline industry, operational expertise and his general business knowledge.
H. McIntyre Gardner has been a member of the Board since July 2010 and Chairman of the Board since August 2013. Mr. Gardner retired in 2008 from Merrill Lynch & Co., Inc. as the Head of Americas Region and Global Bank Group, Global Private Client. Prior to joining Merrill Lynch in July 2000, Mr. Gardner was the President and Chief Operating Officer of Helen of Troy Limited, a personal care products manufacturer. The Board has previously concluded that Mr. Gardner should serve on the Board as Chairman and on the Audit Committee, based on his financial and business skills, extensive corporate finance experience and broad financial expertise.
Executive Officers
The following is biographical information for our executive officers not discussed above.
Name
 
Age
 
Position(s)
Edward M. Christie, III
 
44
 
Senior Vice President and Chief Financial Officer
John Bendoraitis
 
51
 
Senior Vice President and Chief Operating Officer
Theodore C. Botimer
 
49
 
Senior Vice President, Network and Revenue Management
Thomas C. Canfield
 
59
 
Senior Vice President, General Counsel and Secretary
Edmundo Miranda
 
38
 
Vice President, Controller
Robert A. Schroeter
 
37
 
Vice President, Consumer Marketing
Martha Laurie Villa
 
54
 
Vice President and Chief Human Resources Officer

Edward M. Christie, III has served as our Senior Vice President and Chief Financial Officer since April 2012. Prior to joining Spirit, Mr. Christie served as Vice President and Chief Financial Officer of Pinnacle Airlines Corp. from July 2011 to March 2012. Prior to that, Mr. Christie was a partner in the management consulting firm of Vista Strategic Group LLC from May 2010 to July 2011. Mr. Christie served in various positions from 2002 to 2010 at Frontier Airlines, including as Chief Financial Officer from June 2008 to January 2010, as Senior Vice President, Finance from February 2008 to June 2008, as Vice President, Finance from May 2007 to February 2008, and before that in several positions, including Corporate Financial Administrator, Director of Corporate Financial Planning, and Senior Director of Corporate Financial Planning and Treasury. In April 2008, Frontier Airlines filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code.

John Bendoraitis has served as our Senior Vice President and Chief Operating Officer since October 2013.  Prior to joining Spirit, Mr. Bendoraitis served as Chief Operating Officer of Frontier Airlines from March 2012 to October 2013.  Previously, from 2008 to 2012, he served as President of Comair Airlines. From 2006 to 2008, he served as President of Compass Airlines, where he was responsible for the certification and launch of the airline. Mr. Bendoraitis began his aviation career in 1984 at Northwest Airlines, where over a 22-year span he worked his way up from aircraft technician to vice president of base maintenance operations.
Theodore C. Botimer has served as our Senior Vice President, Network Planning and Revenue Management since November 2014. From April 2008 to October 2014, he served as Senior Vice President, Revenue Management and Strategic Planning of XOJET and prior to that, from 2005 to 2008, as President of Perishable Asset Management, a transportation planning, pricing and revenue management consulting firm. From 2002 to 2005, Mr. Botimer served as Senior Vice President, Planning of Cendant Car Rental Group. Prior to that, from 1995 to 2001, he held various senior pricing and revenue positions in Continental Airlines and America West.

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Thomas C. Canfield has served as our Senior Vice President—General Counsel and Secretary since October 2007. From September 2006 to October 2007, Mr. Canfield served as General Counsel & Secretary of Point Blank Solutions, Inc., a manufacturer of antiballistic body armor. Prior to Point Blank, from 2004 to 2007, he served as CEO and Plan Administrator of AT&T Latin America Corp., a public company formerly known as FirstCom Corporation, which developed high-speed fiber networks in 17 Latin American cities. Mr. Canfield also served as General Counsel & Secretary at AT&T Latin America Corp from 1999 to 2004. Previously, Mr. Canfield was Counsel in the New York office of Debevoise & Plimpton LLP. Mr. Canfield serves on the board and on the audit and nominating and corporate governance committees of Iridium Communications Inc., a satellite communications company. Mr. Canfield previously served on the board of directors of Tricom S.A., a telecommunications company, from 2004 to 2010.
Edmundo Miranda has served as our Vice President and Controller since January 2012. Prior to that, he served as our Senior Director, Corporate Controller from January 2009 to December 2011 and as Director of Corporate Accounting from July 2007 to January 2009. From 2001 to 2007, Mr. Miranda served in the audit practice of KPMG LLP, where he worked with publicly traded and mid-sized to large private corporations before leaving as a Manager.
Robert A. Schroeter has served as our Vice President, Consumer Marketing since October 2012. Prior to that, he served as our Senior Director, Consumer Marketing from September 2006 to September 2012 and as Director, Interactive Marketing from July 2005 to August 2006. Prior to that, he held various positions at US Airways and was responsible for online advertising and e-mail marketing. Mr. Schroeter's early experience in the airline and travel industry includes e-commerce product management, project management and pricing roles with LasVegas.com, US Airways and America West Airlines.
Martha Laurie Villa has served as our Vice President & Chief Human Resources Officer since October 2014. Prior to that, Mrs. Villa was an independent consultant and, from March 2014 to September 2014, served as Interim Vice President, Human Resources at Charter Schools USA.  Other senior roles held by Mrs. Villa include Chief People Officer for Liberty Power from November 2009 to February 2013, VP, Human Resources for LexisNexis Risk Solutions from July 2006 to September 2009 and Senior VP, Human Resources for Ann Taylor Corporation from April 2002 to January 2005.  Prior to that, she held global senior human resources leadership positions at both Transora and Sara Lee Corporation.  She also serves on the Board of Advisors of Primate Technologies, a private software development company in the power utility industry, since March of 2013. 




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BOARD OF DIRECTORS, COMMITTEES AND CORPORATE GOVERNANCE
Independence of the Board of Directors
As required under the NASDAQ Stock Market rules, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the Board. The Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of the NASDAQ Stock Market, as in effect from time to time.
Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent registered public accounting firm, the Board has affirmatively determined that, with the exception of Mr. Baldanza who is our CEO, all the members of the Board are independent directors, in each case within the meaning of the applicable NASDAQ Stock Market listing standards.
As required under the NASDAQ Stock Market rules, our independent directors meet regularly in executive sessions at which only independent directors are present.
There are no family relationships among any of our directors or executive officers.
Board Responsibilities; Risk Oversight
The Board is responsible for, among other things, overseeing the conduct of our business; reviewing and, where appropriate, approving our major financial objectives, plans and actions; and reviewing the performance of our CEO and other members of management based on reports from the Compensation Committee. Following the end of each year, the Board conducts an annual self-evaluation, which includes a review of any areas in which the Board or management believes the Board can make a better contribution to our corporate governance, as well as a review of the committee structure and an assessment of the Board’s compliance with corporate governance principles. In fulfilling the Board’s responsibilities, directors have full access to our management and independent advisors. With respect to the Board’s role in our risk oversight, our Audit Committee discusses with management our policies with respect to risk assessment and risk management and our significant financial risk exposures and the actions management has taken to limit, monitor or control such exposures. Our Audit Committee reports to the full Board with respect to these matters, among others. Our Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and periodically reports to the entire Board about such risks.
Leadership Structure
We have historically separated the roles of CEO and Chairman of the Board in recognition of the differences between the two roles. The CEO is responsible for setting our strategic direction and our day-to-day leadership and performance, while the Chairman of the Board provides guidance to the CEO, and sets the agenda for Board meetings and presides over meetings of the full Board. Mr. Gardner currently serves as our Chairman of the Board and Mr. Baldanza currently serves as our President and CEO. In addition, our amended and restated bylaws provide that the independent directors may appoint a lead director from among them to perform such duties as may be assigned by the Board.
Board Committees
The Board has the following standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Safety, Security and Operations Committee. The composition and responsibilities of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by the Board. The Board also has an ad hoc Finance Committee, which meets at the request of the Board or management. A copy of the Finance Committee charter is available on the Company’s website at http://ir.spirit.com .








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Committee Membership as of April 28, 2015
Director
Independent (Y/N)
Audit
Compensation
Nominating and Corporate Governance
Safety, Security and Operations
B. Ben Baldanza
N
 
 
 
X
Carlton D. Donaway
Y
 
 
Chair
X
David G. Elkins
Y
 
Chair
 
 
Robert L. Fornaro
Y
 
X
 
Chair
H. McIntyre Gardner
Y
X
 
 
 
Robert D. Johnson
Y
Chair
 
 
X
Barclay G. Jones III
Y
X
 
X
 
Stuart I. Oran
Y
X
 
X
 
Horacio Scapparone
Y
 
X
X
 
If elected as a Class I director at the Annual Meeting, Ms. Zier will serve as a member of the Audit Committee effective June 16, 2015.
Audit Committee
Our Audit Committee oversees our corporate accounting and financial reporting process. Among other matters, the Audit Committee evaluates the independent auditors’ qualifications, independence and performance; determines the engagement of the independent auditors; reviews and approves the scope of the annual audit and the audit fee; discusses with management and the independent auditors the results of the annual audit and the review of our quarterly financial statements; approves the retention of the independent auditors to perform any proposed permissible non-audit services; monitors the rotation of partners of the independent auditors on the Company’s engagement team as required by law; reviews our critical accounting policies and estimates; oversees our internal audit function and annually reviews the Audit Committee charter and the committee’s performance. The current members of our Audit Committee are Messrs. Gardner, Johnson, Jones and Oran, with Mr. Johnson serving as the chair of the committee. All members of our Audit Committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the NASDAQ Stock Market. The Board has determined that each of Mr. Johnson and Mr. Gardner is an Audit Committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the applicable rules and regulations of the NASDAQ Stock Market. Messrs. Gardner, Johnson, Jones and Oran are independent directors as defined under the applicable rules and regulations of the SEC and the NASDAQ Stock Market. The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and the NASDAQ Stock Market. A copy of the Audit Committee charter is available on the Company’s website at http://ir.spirit.com . Mr. Oran will cease being a member of the Audit Committee at the time of the Annual Meeting and, if elected as a Class I director at the Annual Meeting, Ms. Zier will become a member of the Audit Committee effective June 16, 2015.
Compensation Committee
Our Compensation Committee reviews and approves, and in some instances makes recommendations with respect to, the Company's policies, practices and plans relating to compensation and benefits of our officers and employees. The Compensation Committee reviews and approves corporate goals and objectives relevant to compensation of our CEO and other executive officers, evaluates their performance in light of those goals and objectives, and sets the compensation of these officers based on such evaluations. The Compensation Committee considers recommendations of our CEO with respect to the compensation of other Company officers. Our CEO evaluates each other officer’s overall performance and contributions to us at the end of each fiscal year and reports to the Compensation Committee his recommendations for the other officers’ compensation. The Compensation Committee also administers the issuance of restricted stock units, performance share units and other awards under our equity-based compensation plans. The Compensation Committee also reviews, and makes recommendations to the Board with respect to, the form and amount of compensation of non-employee directors of the Company. The Compensation Committee reviews and evaluates, at least annually, the performance of the Compensation Committee and its members, including compliance of the Compensation Committee with its charter. The Compensation Committee performs other functions as set forth in the Compensation Committee charter. A copy of the Compensation Committee charter is available on the Company’s website at http://ir.spirit.com .

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During 2014, the Compensation Committee continued to engage Towers Watson & Co. (“Towers Watson”), an independent executive compensation advisory firm originally engaged by the Compensation Committee in 2011, as the Compensation Committee’s independent compensation advisor. Based on information provided by Towers Watson and by Company management, in March 2015 the Compensation Committee determined that no conflict of interest currently exists with, or was raised during the 2014 fiscal year by the work of, Towers Watson, and that Towers Watson is independent considering the factors enumerated by the SEC for evaluating compensation advisor independence.
The current members of our Compensation Committee are Messrs. Elkins, Fornaro and Scapparone, with Mr. Elkins serving as the chair of the committee. The Board has affirmatively determined that each of Messrs. Elkins, Fornaro and Scapparone meets the definition of “independent director” for purposes of the NASDAQ Stock Market listing rules and for purposes of Section 162(m) of the Internal Revenue Code.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for making recommendations regarding candidates for directorships and the size and composition of the Board. In addition, the Nominating and Corporate Governance Committee is responsible for overseeing our corporate governance guidelines, reporting and making recommendations concerning governance matters, and reviewing and making recommendations regarding succession plans with respect to our CEO and other named executive officers. A copy of our corporate governance guidelines is available on the Company's website at http://ir.spirit.com .

The Nominating and Corporate Governance Committee reviews candidates for director in the context of the current composition, skills and expertise of the Board, the operating requirements of the Company and the interests of stockholders. The Nominating and Corporate Governance Committee also takes into consideration applicable laws and regulations (including the NASDAQ Stock Market listing standards), diversity, age, skills, experience, integrity, ability to make independent analytical inquires, understanding of the Company’s business and business environment, willingness to devote adequate time and effort to Board responsibilities and other relevant factors. In the case of new director candidates, the Nominating and Corporate Governance Committee determines whether the nominee must be independent for purposes of NASDAQ Stock Market Rules and applicable SEC rules and regulations. The Nominating and Corporate Governance Committee then compiles a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the functions and needs of the Board. The Nominating and Corporate Governance Committee meets to discuss and consider such candidates’ qualifications. All members of the Nominating and Corporate Governance Committee, the Chairman and the CEO then interview candidates that the Nominating and Corporate Governance Committee believes have the requisite background, before recommending a nominee to the Board, which votes to elect the nominees. On April 22, 2015, the Nominating and Corporate Governance Committee found Ms. Dawn M. Zier to be well-qualified and recommended to the Board that Ms. Zier be nominated to stand for election as a Class I director at the Annual Meeting.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. Though the committee has not established a formal policy with regard to consideration of director candidates recommended by stockholders, the Board believes that the procedures set forth in the Company’s amended and restated bylaws are currently sufficient and that the establishment of a formal policy is not necessary.
Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by delivering, along with any updates or supplements required by the Company’s amended and restated bylaws, a written recommendation, c/o the Company’s Secretary, to the following address: Spirit Airlines, Inc., 2800 Executive Way, Miramar, Florida 33025 not earlier than the 120 th  day prior to and not later than the 90 th  day prior to the first anniversary of the Company’s annual meeting of stockholders for the preceding year; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, such recommendation shall be delivered not earlier than the 120 th day prior to the Company’s annual meeting and not later than the 90 th day prior to such annual meeting, or, if later, the 10 th day following the day on which public disclosure of the date of such annual meeting was first made. Submissions must include the required information and follow the specified procedures set forth in the Company’s amended and restated bylaws. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. The nominating and Corporate governance committee will evaluate any director candidates that are properly recommended by stockholders in the same manner as it evaluates all other director candidates, as described above.
The Nominating and Corporate Governance Committee is comprised of Messrs. Donaway, Jones, Oran and Scapparone, with Mr. Donaway serving as the chair of the committee. The Board has affirmatively determined that each of Messrs.

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Donaway, Jones, Oran and Scapparone meets the definition of “independent director” for purposes of the NASDAQ Stock Market listing rules. A copy of the Nominating and Corporate Governance Committee charter is available on the Company’s website at http://ir.spirit.com .
Safety, Security and Operations Committee
On January 21, 2015, the Board constituted a Safety, Security and Operations Committee to oversee the Company's activities, programs and procedures with respect to safety, security and airline operations. Among other matters, the Safety, Security and Operations Committee reviews the Company's safety programs, policies and procedures; reviews the Company's policies, procedures and investments, and monitors the Company activities, with respect to physical and information security; and reviews other aspects of airline operations such as reliability, organization and staffing. The current members of our Safety, Security and Operations Committee are Messrs. Donaway, Fornaro, Johnson and Baldanza, with Mr. Fornaro serving as the chair of the committee. The Safety, Security and Operations Committee operates under a written charter, a copy of which is available on the Company’s website at http://ir.spirit.com .
Meetings of the Board of Directors, Board and Committee Member Attendance and Annual Meeting Attendance
The Board met nine times during 2014 . The Audit Committee of the Board met eight times, the Compensation Committee of the Board met eleven times and the Nominating and Corporate Governance Committee met two times during 2014 . The Safety, Security and Operations Committee did not meet in 2014 as it was constituted by the Board on January 21, 2015. During 2014 , each Board member attended 75% or more of the aggregate of the meetings of the Board and of the committees on which he served. We encourage all of our directors and nominees for director to attend our annual meeting of stockholders; however, attendance is not mandatory. All of our directors attended our annual meeting of stockholders in 2014 .
Stockholder Communications with the Board of Directors
Should stockholders wish to communicate with the Board or any specified individual directors, such correspondence should be sent to the attention of the Secretary, at 2800 Executive Way, Miramar, Florida 33025. The Secretary will forward the communication to the Board members.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee is or has at any time during the past year been an officer or employee of ours. None of our executive officers currently serves or in the past year has served as a member of the board of directors or Compensation Committee of any entity that has one or more executive officers serving on our Board or Compensation Committee.
Executive Compensation
We seek to ensure a pay-for-performance culture with well-balanced and transparent compensation policies and practices, more fully described in the "Compensation Discussion and Analysis" section of this Proxy Statement.
Perquisites
Perquisites are not a significant part of our executive compensation program. As is common in the airline industry, senior executives and their immediate families are entitled to certain travel privileges on our flights, which may be on a positive space basis.
Stock Ownership Guidelines for Non-employee Directors and Executives
We maintain stock ownership guidelines applicable to non-employee directors and executives, more fully described in the "Compensation Discussion and Analysis" section of this Proxy Statement. All of our non-employee directors and executive officers, including our named executive officers, are currently in compliance with the guidelines.
Clawback Policy
In 2014 we adopted a clawback policy, pursuant to which the Company may seek reimbursement of incentive compensation (cash and equity-based) paid to executive officers on the basis of reported financial results that are later the subject of a financial statement restatement.
Retirement and Pension Practices

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We do not provide a defined benefit pension plan or any supplemental executive retirement plan or other form of non-qualified retirement plan for our executive officers.
Corporate Governance Guidelines     
The Board has adopted corporate governance guidelines to assist them in the exercise of its responsibilities and to serve the interests of the Company and its stockholders. The guidelines address areas such as Board and committee size and composition, director qualification standards and interaction with institutional investors. A copy of our corporate governance guidelines is available to security holders on the Company's website at http://ir.spirit.com .
Code of Business Conduct and Ethics
The Board has adopted a Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics is applicable to all members of the Board, executive officers and employees, including our CEO, Chief Financial Officer and principal accounting officer. The Code of Business Conduct and Ethics addresses, among other things, issues relating to conflicts of interests, including internal reporting of violations and disclosures, and compliance with applicable laws, rules and regulations. The purpose of the Code of Business Conduct and Ethics is to deter wrongdoing and to promote, among other things, honest and ethical conduct and to ensure to the greatest possible extent that our business is conducted in a legal and ethical manner. We intend to promptly disclose (1) the nature of any substantive amendment to our Code of Business Conduct and Ethics that applies to our directors, executive officers or other principal financial officers and (2) the nature of any waiver, including an implicit waiver, from a provision of our Code of Business Conduct and Ethics that is granted to one of these specified directors, executive officers or other principal financial officers, the name of such person who is granted the waiver and the date of the waiver, on our website. A copy of the Code of Business Conduct and Ethics is available on the Company’s website at http://ir.spirit.com .
Related Party Transactions
The Board has adopted a written related party policy setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we are to be a participant, the amount involved exceeds $120,000 and a related party had or will have a direct or indirect material interest, including purchases of goods or services by or from the related party or entities in which the related party has a material interest, indebtedness, guarantees of indebtedness and employment by us of such related party.

Limitation of Liability and Indemnification
Our amended and restated certificate of incorporation contains provisions that limit the liability of our directors for monetary damages to the fullest extent permitted by Delaware law. Consequently, our directors will not be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duties as directors, except liability for:
any breach of the director’s duty of loyalty to us or our stockholders;
any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or
any transaction from which the director derived an improper personal benefit.
Our amended and restated certificate of incorporation provides that we may indemnify our directors and executive officers, in each case to the fullest extent permitted by Delaware law. Our amended and restated bylaws also provide that we are obligated to indemnify our directors and executive officers to the fullest extent permitted by Delaware law and advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered into agreements to indemnify our directors, executive officers and other employees as determined by the Board. For more information, see “Certain Relationships and Related Transactions – Other Transactions” elsewhere in this Proxy Statement. With specified exceptions, these agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe these limitations of liability provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability insurance.

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The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation, amended and restated bylaws and indemnification agreements may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duty. Our amended and restated certificate of incorporation provides that any such lawsuit must be brought in the Court of Chancery of the State of Delaware. The foregoing provisions may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”), may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.


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PROPOSAL NO. 2:
RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2015 and is seeking ratification of such selection by our stockholders at the Annual Meeting. Ernst & Young LLP has audited our financial statements since 1995. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Neither our amended and restated bylaws nor other governing documents or law require stockholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm. However, the Audit Committee is submitting the selection of Ernst & Young LLP to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain Ernst & Young LLP. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of the Company and our stockholders.
To be approved, the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm must receive a “FOR” vote from the holders of a majority in voting power of the shares of common stock which are present in person or represented by proxy and entitled to vote on the proposal. Abstentions and broker non-votes will be counted towards a quorum. Abstentions will have the same effect as an “AGAINST” vote for purposes of determining whether this matter has been approved. Broker non-votes will have no effect on the outcome of this proposal.
Principal Accountant Fees and Services
The following table provides information regarding the fees incurred by Ernst & Young LLP during the years ended December 31, 2014 and 2013 . All fees described below were approved by the Audit Committee.
 
Year Ended December 31,

2014
 
2013
 
(in thousands)
Audit Fees
$
999

 
$
854

Audit-Related Fees

 

Tax Fees
30

 
3

All Other Fees
2

 
2

Total Fees
$
1,031

 
$
859

Audit Fees
Audit fees represent fees billed for professional services rendered for the audit of our annual financial statements, including reviews of our quarterly financial statements, as well as audit services provided in connection with certain other regulatory filings including our 2014 and 2013 filings of reports or registration statements on Form 10-K, Form 10-Q, Form 10-QA, Form 8-K and comfort letter consents.
Audit-Related Fees
There were no audit-related fees of Ernst & Young LLP during 2014 and 2013 .

Tax Fees
Tax fees represent fees billed for professional services rendered for the review and advice on U.S. and foreign tax matters.
All Other Fees
All other fees represent an annual license fee for access to Ernst & Young LLP’s web-based accounting research tool during 2014 and 2013 .


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Pre-Approval Policies and Procedures
The Audit Committee pre-approves all audit and non-audit services provided by its independent registered public accounting firm. This policy is set forth in the charter of the Audit Committee and is available on the Company's website at http://ir.spirit.com .
The Audit Committee approved all audit and other services provided by Ernst & Young LLP for 2014 and 2013 and the estimated costs of those services. Actual amounts billed, to the extent in excess of the estimated amounts, were periodically reviewed and approved by the Audit Committee.
The Audit Committee considered whether the non-audit services rendered by Ernst & Young LLP were compatible with maintaining Ernst & Young LLP’s independence and concluded that they were so compatible.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP
AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE YEAR ENDING DECEMBER 31, 2015 .


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PROPOSAL NO. 3:
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company is providing stockholders with a non-binding, advisory vote on compensation programs for our named executive officers (sometimes referred to as “say on pay”). In 2012, our stockholders voted on a proposal relating to the frequency of the "say-on-pay" vote. We recommended, and our stockholders approved on an advisory, non-binding basis, an annual say-on-pay vote. We agree with our stockholders and have included this advisory (non-binding) vote on the compensation of our named executive officers for fiscal year 2014.
Our stockholders have the opportunity to vote for, against or abstain from voting on the following resolution:
“RESOLVED, that the stockholders approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables and the related narrative disclosure in this Proxy Statement.”
To be approved, this proposal must receive a “FOR” vote from the holders of a majority in voting power of the shares of common stock which are present in person or represented by proxy and entitled to vote on the proposal. Abstentions and broker non-votes will be counted towards a quorum. Abstentions will have the same effect as an “AGAINST” vote for purposes of determining whether this matter has been approved. Broker non-votes will have no effect on the outcome of this proposal.
At our 2014 annual meeting of stockholders, approximately 98% of the shares voted were cast in favor of our management "say on pay" resolution. The Compensation Committee believes those voting results affirm our stockholders’ strong support of our approach to executive compensation and did not make any fundamental changes for 2015 . The Company recommends that stockholders again approve and support the decisions pertaining to the compensation of our named executive officers and the Company’s executive compensation programs.
As described in detail under the “Compensation Discussion and Analysis” section of this Proxy Statement, our compensation programs are designed to motivate our executives to create a successful company. Our philosophy is to make a significant percentage of an executive officer’s compensation “at-risk” and tied to the Company’s performance. We believe that our compensation program, with its balance of short-term incentives (including annual performance bonuses) and long-term incentives (including performance-based equity awards), rewards sustained performance that is aligned with long-term stockholder interests. Stockholders are encouraged to read the "Compensation Discussion and Analysis" section of this Proxy Statement, the accompanying compensation tables and the related narrative disclosure.
Among other programs applicable to executive officers, the Company (i) does not pay tax gross-ups to its executive officers with respect to retirement, severance or change-in-control payments; (ii) maintains stock ownership guidelines as well as a clawback policy, both applicable to executive officers; and (iii) has an anti-hedging and anti-pledging policy applicable to executive officers.
This vote is non-binding. The Board and the Compensation Committee expect to take into account the outcome of the vote when considering future executive compensation decisions to the extent they can determine the cause or causes of any significant negative voting results. Unless the Board modifies its determination on the frequency of future “say on pay” advisory votes, the next “say on pay” advisory vote will be held at the 2016 annual meeting of stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE APPROVAL, ON A NON-BINDING, ADVISORY BASIS, OF THE COMPENSATION OF
OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN
THE COMPENSATION DISCUSSION AND ANALYSIS SECTION OF THIS PROXY STATEMENT, THE ACCOMPANYING COMPENSATION TABLES
AND THE RELATED NARRATIVE DISCLOSURE.


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PROPOSAL NO. 4

APPROVAL OF 2015 INCENTIVE AWARD PLAN

    On December 16, 2014, our Board approved the Spirit Airlines, Inc. 2015 Incentive Award Plan (the “2015 Plan”) and now submits the 2015 Plan for stockholder approval. The affirmative vote of a majority of the Company's shares represented at the Annual Meeting and entitled to vote is required to approve the 2015 Plan.

The 2015 Plan is intended to replace the Company’s current 2011 Equity Incentive Award Plan (the "2011 Plan"), which received stockholder approval on May 19, 2011. The 2015 Plan is substantially identical to the 2011 Plan. The primary difference is that the 2015 Plan includes provisions that would allow the Company to avoid certain limitations imposed by Section 162(m) of the Internal Revenue Code ("Section 162(m)") on the income tax deductibility of performance-based compensation paid to our CEO and three other most highly compensated officers, excluding our Chief Financial Officer ("Section 162(m) Officers"). Since the date of our initial public offering in June 2011, we have not been subject to the provisions of Section 162(m) because of a transitional relief exception under Section 162(m) that applies to newly-public companies. However, this transitional relief expires on the date of the Annual Meeting.
    
Upon approval of the 2015 Plan by the stockholders, no further awards will be granted under the 2011 Plan. The 2011 Plan will continue to govern awards previously granted under the 2011 Plan. If the stockholders do not approve the 2015 Plan, we will continue to grant awards under the 2011 Plan. Failure of the stockholders to approve the 2015 Plan will mean that the Company cannot grant awards to our Section 162(m) Officers under the 2011 Plan that meet the requirements of "performance-based compensation" under Section 162(m). However, such failure will not limit in any other manner the amount and type of awards that may be granted to our Section 162(m) Officers under the 2011 Plan.

The same reasons for establishing the 2011 Plan are applicable to establishing the 2015 Plan, which are namely to: (i) help promote the success and enhance the value of the Company by linking the personal interests of the members of our Board, key employees and consultants to those of our stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to our stockholders and (ii) provide flexibility to the Company in its ability to attract, motivate and retain the services of members of our Board, key employees and consultants upon whose judgment, interests and special efforts the successful conduct of the Company's operations is largely dependent.

     We are not requesting approval of additional shares to be added to the 2015 Plan. Instead, the remaining shares available for grant under the 2011 Plan will be made available under the 2015 Plan if the 2015 Plan is approved.

The following summary of the material terms of the 2015 Plan does not purport to be a complete description of all the provisions of the 2015 Plan and is qualified in its entirety by reference to the 2015 Plan, a copy of which is attached as Annex A to this Proxy Statement and incorporated in its entirety in this Proposal No. 4 by reference. The 2015 Plan continues the following stockholder-friendly provisions found in the 2011 Plan:

The 2015 Plan will be administered by the Compensation Committee of our Board, which is comprised entirely of independent non-employee directors.
The 2015 Plan does not provide for single-trigger vesting acceleration upon a change in control of the Company unless the acquirer does not assume or replace the award.
The 2015 Plan limits transferability of awards. In general, awards may not be sold, pledged, assigned or transferred by the person to whom they are granted, except in limited circumstances approved by the administrator.
The 2015 Plan does not provide for any tax gross-ups.
The 2015 Plan permits the administrator the authority to provide for clawback provisions in any award, allowing the Company to recoup any proceeds, gains or economic benefits received by a holder of an award and to terminate an award in the event of competitive or other harmful activity by the holder.
The exercise price of options and stock appreciation rights cannot be less than 100% of the fair market value of the Company’s common stock on the date options or stock appreciation rights are granted.

In addition, the 2015 Plan has a number of new provisions for the benefit of our stockholders, including the following:

The 2015 Plan is intended to conform to the requirements of Section 162(m). Accordingly, assuming approval by the stockholders, the 2015 Plan will enable the Company to pay compensation to our Section 162(m) Officers that qualifies as "performance-based" within the meaning of Section 162(m) and to obtain the applicable tax deductions.

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The 2015 Plan limits the maximum number of shares that may be covered by awards to any one individual in any one year to 1,000,000 shares in the case of options and stock appreciation rights and 300,000 shares (or $10,000,000) for other types of awards.
The 2015 Plan “recaptures” fewer shares than the 2011 Plan. Shares of common stock tendered to, or withheld by, the Company to satisfy the grant or exercise price or tax withholding obligations pursuant to any award do not become available for future issuance.
The 2015 Plan provides for minimum vesting of awards. Awards granted under the 2015 Plan to our employees or consultants (excluding non-employee members of our Board) become vested on one or more vesting dates over a period of not less than one year following the date of grant, subject to limited exceptions.
Under the 2015 Plan, options and stock appreciation rights may not be repriced without first obtaining stockholder approval.
2015 Incentive Award Plan
The 2015 Plan permits the grant of a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock awards, dividend equivalent awards, stock payment awards and other equity-based awards. The 2015 Plan is also designed to permit us to make cash-based awards and equity-based awards intended to qualify as “performance-based compensation” under Section 162(m), which we refer to as “performance awards.”
Share Reserve
If the 2015 Plan is approved, the number of shares initially reserved for issuance thereunder will equal 2,682,457, which is the number of shares of common stock that were available for issuance under the 2011 Plan as of December 16, 2014. Such amount will be (i) reduced by any shares which are the subject of awards made under the 2011 Plan after December 16, 2014 and prior to the date the 2015 Plan is approved by the Company's stockholders and (ii) increased for any shares subject to outstanding awards that were previously granted under the 2011 Plan that, after December 16, 2014, expire or otherwise terminate without having been exercised or settled in full. As noted above, we are not requesting approval of additional shares to be added to the 2015 Plan. The same number of shares available for grant under the 2011 Plan will instead be made available under the 2015 Plan if the 2015 Plan is approved.

The following counting provisions will be in effect for the share reserve under the 2015 Plan:

to the extent that an award terminates, expires or lapses for any reason or an award is settled in cash without the delivery of shares, any shares subject to the award at such time will be available for future grants under the 2015 Plan;
to the extent shares are tendered or withheld to satisfy the grant, exercise price or tax withholding obligation with respect to any award under the 2015 Plan, such tendered or withheld shares will not be available for future grants under the 2015 Plan;
to the extent that shares of our common stock are repurchased by us prior to vesting so that shares are returned to us, such shares will be available for future grants under the 2015 Plan;
the payment of dividend equivalents in cash in conjunction with any outstanding awards will not be counted against the shares available for issuance under the 2015 Plan;
to the extent permitted by applicable law or any exchange rule, shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by us or any of our subsidiaries will not be counted against the shares available for issuance under the 2015 Plan;
the full amount of shares available under the 2015 Plan are available to be issued pursuant to incentive stock options; and
the maximum number of shares that may be covered by awards to any one individual in any one year to 1,000,000 shares in the case of options and stock appreciation rights and 300,000 shares (or $10,000,000) for other types of awards.

Administration. The Compensation Committee of our Board will administer the 2015 Plan unless our Board assumes authority for administration. The 2015 Plan provides that the Compensation Committee may delegate its authority to grant awards to employees other than executive officers and certain senior executives of the Company to a committee consisting of one or more members of our Board or one or more of our officers.
Subject to the terms and conditions of the 2015 Plan, the administrator has the authority to select the persons to whom awards are to be made, to determine the number of shares to be subject to awards and the terms and conditions of awards, and

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to make all other determinations and to take all other actions necessary or advisable for the administration of the 2015 Plan. The administrator is also authorized to adopt, amend or rescind rules relating to administration of the 2015 Plan. Our Board may also act with the authority to administer the 2015 Plan, and at any time remove the Compensation Committee as the administrator. The full Board will administer the 2015 Plan with respect to awards to non-employee directors.
Eligibility. Options, stock appreciation rights, restricted stock and all other stock-based and cash-based awards under the 2015 Plan may be granted to individuals who are then officers, employees, directors or consultants of the Company or any subsidiary of the Company (a total of approximately 4,371 individuals as of the date of this Proxy Statement). Only employees of our company or certain of our subsidiaries may be granted incentive stock options or ISOs.
Awards. The 2015 Plan provides that the administrator may grant or issue stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock, dividend equivalents, performance awards, stock payments and other stock-based and cash-based awards, or any combination thereof. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award.

Nonqualified Stock Options , or NQSOs, will provide for the right to purchase shares of our common stock at a specified price, which may not be less than fair market value on the date of grant, and usually will become exercisable (at the discretion of the administrator) in one or more installments after the grant date, subject to the participant’s continued employment or service with us and/or subject to the satisfaction of corporate performance targets and individual performance targets established by the administrator. NQSOs may be granted for any term specified by the administrator that does not exceed ten years from the grant date. In-the-money options that remain unexercised as of the expiration date will be automatically exercised, if the holder continues employment or service with us.
Incentive Stock Options , or ISOs, will be designed in a manner intended to comply with the provisions of Section 422 of the Code and will be subject to specified restrictions contained in the Code. Among such restrictions, ISOs must have an exercise price of not less than the fair market value of a share of common stock on the grant date, may only be granted to employees, and must not be exercisable after a period of ten years measured from the grant date. In the case of an ISO granted to an individual who owns (or is deemed to own) at least 10% of the total combined voting power of all classes of our capital stock, the 2015 Plan provides that the exercise price must be at least 110% of the fair market value of a share of common stock on the grant date and the ISO must not be exercisable after a period of five years from the date of grant.
Restricted Stock may be granted to any eligible individual and made subject to such restrictions as may be determined by the administrator. Restricted stock, typically, may be forfeited for no consideration or repurchased by us at the original purchase price if the conditions or restrictions on vesting are not met. In general, restricted stock may not be sold or otherwise transferred until restrictions are removed or expire. Purchasers of restricted stock, unlike recipients of options, will have voting rights and will have the right to receive dividends, if any, prior to the time when the restrictions lapse, however, extraordinary dividends will generally be placed in escrow, and will not be released until restrictions are removed or expire.
Restricted Stock Units may be awarded to any eligible individual, typically without payment of consideration, but subject to vesting conditions based on continued employment or service or on performance criteria established by the administrator. Like restricted stock, restricted stock units may not be sold, or otherwise transferred or hypothecated, until vesting conditions are removed or expire. Unlike restricted stock, stock underlying restricted stock units will not be issued until the restricted stock units have vested, and recipients of restricted stock units generally will have no voting or dividend rights prior to the time when vesting conditions are satisfied.
Deferred Stock Awards represent the right to receive shares of our common stock on a future date. Deferred stock may not be sold or otherwise hypothecated or transferred until issued. Deferred stock will not be issued until the deferred stock award has vested, and recipients of deferred stock generally will have no voting or dividend rights prior to the time when the vesting conditions are satisfied and the shares are issued. Deferred stock awards generally will be forfeited, and the underlying shares of deferred stock will not be issued, if the applicable vesting conditions and other restrictions are not met.
Stock Appreciation Rights , or SARs, may be granted in connection with stock options or other awards, or separately. SARs granted in connection with stock options or other awards typically will provide for payments to the holder based upon increases in the price of our common stock over a set exercise price. The exercise price of any SAR granted under the 2015 Plan must be at least 100% of the fair market value of a share of our common stock on the date of grant. Except as required by Section 162(m) with respect to a SAR intended to qualify as performance-based compensation as described in Section 162(m), there are no restrictions specified in the 2015 Plan on the exercise of SARs or the amount of gain realizable therefrom, although restrictions may be imposed

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by the administrator in the SAR agreements. SARs under the 2015 Plan will be settled in cash or shares of our common stock, or in a combination of both, at the election of the administrator.
Dividend Equivalents represent the value of the dividends, if any, per share paid by us, calculated with reference to the number of shares covered by the award. Dividend equivalents may be settled in cash or shares and at such times as determined by the Compensation Committee or Board, as applicable.
Performance Awards may be granted by the administrator on an individual or group basis. Generally, these awards will be based upon specific performance targets and may be paid in cash or in common stock or in a combination of both. Performance awards may include “phantom” stock awards that provide for payments based upon the value of our common stock. Performance awards may also include bonuses that may be granted by the administrator on an individual or group basis and which may be payable in cash or in common stock or in a combination of both.
Stock Payments may be authorized by the administrator in the form of common stock or an option or other right to purchase common stock as part of a deferred compensation on other arrangement in lieu of all or any part of compensation, including bonuses, that would otherwise be payable in cash to the employee, consultant or non-employee director.
Other Awards of unrestricted shares, rights to receive future grants of equity-based or equity-related awards, awards denominated in common stock (including performance shares or performance units), cash payments based in whole or in part on the value or future value of shares, or other forms of equity-based or equity-related awards may be authorized by the administrator, alone or in tandem with other awards, in such amounts as the administrator shall from time to time determine.
Performance Award Criteria. The administrator may, in its discretion, condition the vesting of any award granted under the 2015 Plan upon the satisfaction of certain performance goals. To the extent an award is intended to qualify as “performance-based compensation” under Section 162(m), the performance goals will be established by the Compensation Committee with reference to one or more performance criteria set forth in the 2015 Plan, either on a Company-wide basis or, as relevant, in respect of one or more of our affiliates, divisions or operational units. The Compensation Committee may establish these performance criteria with reference to one or more of the following:

net earnings (either before or after one or more of the following: interest, taxes, depreciation, amortization and aircraft rent);
gross or net sales, revenue or revenue growth;
net income (either before or after taxes);
operating earnings or profit (before or after taxes);
cash flow (including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital);
return on assets;
return on investment or capital;
return on stockholders’ equity;
return on sales;
gross or net profit, profit growth or operating margin (before or after taxes);
costs (including cost of capital), debt leverage, year-end cash position or book value;
funds from operations;
expenses;
working capital;
basic or diluted earnings per share (before or after taxes);
price per share of (including, but not limited to, growth measures and total stockholder return);
regulatory body approval for commercialization of a product;
implementation or completion of critical projects;
market share;
expense targets or cost reduction goals, general and administrative expense savings;
enterprise value;
objective measures of personal targets, goals or completion of projects;
strategic objectives, development of new product lines and related revenue, sales and margin targets, or international operations;
revenue per available seat mile;
cost per available seat mile;
the results of employee or customer satisfaction surveys; and
other measures of operational performance (including, without limitation, U.S. Department of Transportation performance rankings in operational areas), quality, safety, productivity or process improvement, any of which may be

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measured either in absolute terms for the Company or any operating unit of the Company, product lines, brands, business segments, administrative departments of the Company or any combination thereof, or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.
Change in Control. In the event of a change in control where the acquirer does not assume or replace awards granted under the 2015 Plan, awards issued under the 2015 Plan will be subject to accelerated vesting such that 100% of such awards will become vested and exercisable or payable, as applicable, prior to the consummation of such transaction and if not exercised or paid the awards will terminate upon consummation of the transaction. In addition, the administrator will also have complete discretion to structure one or more awards under the 2015 Plan to provide that such awards will become vested and exercisable or payable on an accelerated basis in the event such awards are assumed or replaced with equivalent awards but the individual’s service with us or the acquiring entity is subsequently terminated within a designated period following the change in control event. The administrator may also make appropriate adjustments to awards under the 2015 Plan and is authorized to provide for the acceleration, cash-out, termination, assumption, substitution or conversion of such awards in the event of a change in control or certain other unusual or nonrecurring events or transactions. Under the 2015 Plan, a change in control is generally defined as:

the transfer or exchange in a single or series of related transactions by our stockholders of more than 50% of our voting stock to a person or group;
a change in the composition of our Board over a two-year period such that 50% or more of the members of our Board were elected through one or more contested elections;
a merger, consolidation, reorganization or business combination in which we are involved, directly or indirectly, other than a merger, consolidation, reorganization or business combination, which results in our outstanding voting securities immediately before the transaction continuing to represent a majority of the voting power of the acquiring company’s outstanding voting securities and after which no person or group beneficially owns 50% or more of the outstanding voting securities of the surviving entity immediately after the transaction;
the sale, exchange, or transfer of all or substantially all of our assets; or
stockholder approval of our liquidation or dissolution.

Adjustments of Awards. In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off, recapitalization, distribution of our assets to stockholders (other than normal cash dividends) or any other corporate event affecting the number of outstanding shares of our common stock or the share price of our common stock that would require adjustments to the 2015 Plan or any awards under the 2015 Plan in order to prevent the dilution or enlargement of the potential benefits intended to be made available thereunder, the administrator will make appropriate, proportionate adjustments to:

the aggregate number and type of shares subject to the 2015 Plan;
the number and kind of shares subject to outstanding awards and terms and conditions of outstanding awards (including, without limitation, any applicable performance targets or criteria with respect to such awards); and
the grant or exercise price per share of any outstanding awards under the 2015 Plan
Minimum Vesting. Awards granted under the 2015 Plan to employees or consultants (excluding non-employee members of our Board) will become vested on one or more vesting dates over a period of not less than one year following the date of grant. There are limited exceptions to this rule. First, the administrator, in its sole discretion, may determine that, on an ad hoc basis, awards may be granted without regard to such minimum vesting rule in order to achieve a specified business objective, such as an inducement to a new hire or a retention award to a key employee or group of employees. Second, awards may be granted without regard to such minimum vesting rule in order to comply with laws or regulations applicable to the holder of the award, or local laws applicable to the grant of the award. The administrator has discretion to accelerate the vesting of any award upon circumstances it deems appropriate, including upon or following a change in control, or the award holder’s death, disability, retirement or involuntary termination of employment.
Clawback. As noted above, the 2015 Plan permits the administrator the authority to provide for clawback provisions in any award, allowing the Company to recoup any proceeds, gains or economic benefits received by a holder of an award and to terminate an award in the event of competitive or other harmful activity by the holder.
No Repricing without Stockholder Approval . As noted above, under the 2015 Plan, options and stock appreciation rights may not be repriced without first obtaining stockholder approval.

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Amendment and Termination. Our Board may amend, modify, suspend or terminate the 2015 Plan at any time and from time to time. We must generally obtain stockholder approval:
to increase the number of shares available under the 2015 Plan (other than in connection with certain corporate events, as described above); or
to the extent necessary to comply with any tax or regulatory requirement (including any applicable stock exchange rule).
Any amendment, modification, suspension or termination of the 2015 Plan that would materially and adversely affect the rights or obligations of any holder of an existing award will not to that extent be effective without that holder’s consent, subject to limited exceptions.
Expiration Date. The 2015 Plan will expire on, and no option or other award may be granted pursuant to the 2015 Plan after, the tenth anniversary of the effective date of the 2015 Plan. Any award that is outstanding on the expiration date of the 2015 Plan will remain in force according to the terms of the 2015 Plan and the applicable award agreement.
Securities Laws and U.S. Federal Income Taxes. The 2015 Plan is designed to comply with various securities and U.S. federal tax laws as follows:
Securities Laws. The 2015 Plan is intended to conform to all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the SEC thereunder, including without limitation, Rule 16b-3. The 2015 Plan will be administered, and options will be granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations.
Section 409A of the Code. Certain awards under the 2015 Plan may be considered “nonqualified deferred compensation” for purposes of Section 409A of the Code, which imposes certain additional requirements regarding the payment of deferred compensation. The 2015 Plan is intended to conform to the requirements of Section 409A of the Code.
Section 162(m) of the Code. Section 162(m) generally does not allow a publicly held company to obtain tax deductions for compensation of more than $1.0 million paid in any year to the Section 162(m) Officers, unless these payments are “performance-based” in accordance with conditions specified under Section 162(m). One of those conditions requires the Company to obtain stockholder approval of each performance criterion that a committee of outside directors may use in granting an award under the 2015 Plan that is intended to satisfy the requirements of Section 162(m). In addition, if the committee has the authority to change the targets under a performance goal after stockholder approval of the goal, the material terms of the performance goals must be disclosed and reapproved by stockholders no later than five years after the stockholder approval was first received. Our Compensation Committee, which administers the 2015 Plan, will have the authority to change the targets with respect to awards granted under the 2015 Plan.
As discussed above, since the date of our initial public offering in June 2011, we have not been subject to the provisions of Section 162(m) because of a transitional relief exception under Section 162(m) that applies to newly-public companies. However, this transitional relief expires on the date of the Annual Meeting. If this proposal is approved, and if the applicable performance goals are satisfied, this proposal would enable the Company to continue to issue awards under the 2015 Plan to its Section 162(m) Officers and to obtain tax deductions with respect to these awards, without regard to the limitations of Section 162(m). If this proposal is not approved by stockholders, compensation attributable to grants of awards under the 2015 Plan to our Section 162(m) Officers may not be tax deductible by us. Therefore, the Compensation Committee and our Board recommend that the stockholders approve in their entirety the material terms of the performance goals applicable to awards granted under the 2015 Plan that are intended to satisfy the requirements of Section 162(m) as described below. The Compensation Committee reserves the right to issue awards under the 2015 Plan to our Section 162(m) Officers that are not tax deductible under Section 162(m).
U.S. Federal Income Tax Consequences.

The following is a general summary of the material U.S. federal income tax consequences of the grant, exercise and vesting of awards under the 2015 Plan and the disposition of shares acquired pursuant to the exercise or settlement of such awards and is intended to reflect the current provisions of the Code and the regulations thereunder. This summary is not intended to be a complete statement of applicable law, nor does it address foreign, state, local and payroll tax considerations. Moreover, the U.S. federal income tax consequences to any particular participant may differ from those described herein by reason of, among other things, the particular circumstances of such participant.


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Options . The Code requires that, for treatment of an option as a qualified option, shares of our common stock acquired through the exercise of a qualified option cannot be disposed of before the later of (i) two years from the date of grant of the option, or (ii) one year from the date of exercise. Holders of qualified options will generally incur no federal income tax liability at the time of grant or upon exercise of those options. However, the spread at exercise will be an “item of tax preference,” which may give rise to “alternative minimum tax” liability for the taxable year in which the exercise occurs. If the holder does not dispose of the shares before two years following the date of grant and one year following the date of exercise, the difference between the exercise price and the amount realized upon disposition of the shares will constitute long-term capital gain or loss, as the case may be. Assuming both holding periods are satisfied, no deduction will be allowed to us for federal income tax purposes in connection with the grant or exercise of the qualified option. If, within two years following the date of grant or within one year following the date of exercise, the holder of shares acquired through the exercise of a qualified option disposes of those shares, the participant will generally realize taxable compensation at the time of such disposition equal to the difference between the exercise price and the lesser of the fair market value of the share on the date of exercise or the amount realized on the subsequent disposition of the shares, and that amount will generally be deductible by us for federal income tax purposes, subject to the possible limitations on deductibility under Sections 280G and 162(m) for compensation paid to executives designated in those Sections. Finally, if an otherwise qualified option becomes first exercisable in any one year for shares having an aggregate value in excess of $100,000 (based on the grant date value), the portion of the qualified option in respect of those excess shares will be treated as a nonqualified stock option for federal income tax purposes. No income will be realized by a participant upon grant of a nonqualified stock option. Upon the exercise of a nonqualified stock option, the participant will recognize ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the underlying exercised shares over the option exercise price paid at the time of exercise, and the participant’s tax basis will equal the sum of the compensation income recognized and the exercise price. We will be able to deduct this same amount for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) for compensation paid to certain executives designated in those Sections. In the event of a sale of shares received upon the exercise of a nonqualified stock option, any appreciation or depreciation after the exercise date generally will be taxed as capital gain or loss and will be long-term gain or loss if the holding period for such shares is more than one year.

SARs. No income will be realized by a participant upon grant of a SAR. Upon the exercise of a SAR, the participant will recognize ordinary compensation income in an amount equal to the fair market value of the payment received in respect of the SAR. We will be able to deduct this same amount for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) for compensation paid to certain executives designated in those Sections.

Restricted Stock . A participant will not be subject to tax upon the grant of an award of restricted stock unless the participant otherwise elects to be taxed at the time of grant pursuant to Section 83(b) of the Code. On the date an award of restricted stock becomes transferable or is no longer subject to a substantial risk of forfeiture, the participant will have taxable compensation equal to the difference between the fair market value of the shares on that date over the amount the participant paid for such shares, if any, unless the participant made an election under Section 83(b) of the Code to be taxed at the time of grant. If the participant made an election under Section 83(b), the participant will have taxable compensation at the time of grant equal to the difference between the fair market value of the shares on the date of grant over the amount the participant paid for such shares, if any. If the election is made, the participant will not be allowed a deduction for the value of any shares which may be subsequently forfeited. Special rules apply to the receipt and disposition of restricted shares received by officers and directors who are subject to Section 16(b) of the Exchange Act. We will be able to deduct, at the same time as it is recognized by the participant, the amount of taxable compensation to the participant for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) for compensation paid to certain executives designated in those Sections.

Restricted Stock Units . A participant will not be subject to tax upon the grant of a restricted stock unit award. Rather, upon the delivery of shares or cash pursuant to a restricted stock unit award, the participant will have taxable compensation equal to the fair market value of the number of shares (or the amount of cash) the participant actually receives with respect to the award. We will be able to deduct the amount of taxable compensation to the participant for U.S. federal income tax purposes, but the deduction may be limited under Sections 280G and 162(m) for compensation paid to certain executives designated in those Sections.

Stock Bonus Awards. A participant will have taxable compensation equal to the difference between the fair market value of the shares on the date the award is made over the amount the participant paid for such shares, if any. We will be able to deduct, at the same time as it is recognized by the participant, the amount of taxable compensation to the participant for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.


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Section 162(m) .  In general, as noted above, Section 162(m) denies a publicly held corporation a deduction for U.S. federal income tax purposes for compensation in excess of $1.0 million per year per person to its chief executive officer and its three other officers (other than its chief financial officer) whose compensation is disclosed in its proxy statement, subject to certain exceptions. The 2015 Plan is intended to satisfy an exception with respect to grants of options to covered employees. In addition, the 2015 Plan is designed to permit certain awards of restricted stock units and other awards (including cash awards) to be awarded in a manner intended to qualify under either the “performance-based compensation” exception to Section 162(m) or applicable transitional rule requirements. The transitional rule will not be available for amounts paid and awards granted after the Annual Meeting, although income in respect of stock awards granted before the Annual Meeting will remain exempt from the Section 162(m) limit.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECTS OF FEDERAL INCOME TAXATION UPON PARTICIPANTS AND THE COMPANY WITH RESPECT TO AWARDS UNDER THE 2015 PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE IMPACT OF EMPLOYMENT OR OTHER TAX REQUIREMENTS, THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.

New Plan Benefits

The number of awards that an employee, director or consultant may receive under the 2015 Plan is in the discretion of the administrator. Certain awards have been approved by the Compensation Committee under the 2015 Plan, subject to stockholder approval, in connection with annual equity grants for 2015. The number of units subject to such awards under the 2015 Plan are as follows: Ben Baldanza, Chief Executive Officer and President, 9,918 performance share units; Edward M. Christie III, Senior Vice President and Chief Financial Officer, 3,188 performance share units; John Bendoraitis, Senior Vice President and Chief Operating Officer, 3,188 performance share units; Thomas C. Canfield, Senior Vice President, General Counsel and Secretary, 3,188 performance share units; and Robert A. Schroeter, Vice President, Consumer Marketing, 1,417 performance share units; all current executive officers, as a group, 26,409 (all performance share units); and all current non-employee directors, as a group, 10,009 (all restricted stock units). Non-executive officer employees were not awarded any grants under the 2015 Plan. With respect to performance share units, the aforementioned numbers assume target achievement; actual achievement may range between 0% to 200% of target. On February 18, 2015, the market price of our Common Stock on NASDAQ was $79.95 per share. Because the vesting of all of the performance share units are subject to the achievement of performance conditions, the dollar value of such awards is not readily determinable. No options have been awarded under the 2015 Plan.

Required Vote

The approval of the performance-based provisions of our 2015 Plan requires the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting. Unless marked to the contrary, proxies received will be voted “FOR” the proposal.
***
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE APPROVAL OF THE 2015 INCENTIVE AWARD PLAN

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date ( April 17, 2015 ), information regarding beneficial ownership of our capital stock by:
each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock;
each named executive officer as set forth in the summary compensation table below;
each of our directors; and
all current executive officers and directors as a group.
Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power of that security, including options and warrants that are currently exercisable or exercisable within 60 days and restricted stock units that vest within 60 days. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown that they beneficially own, subject to community property laws where applicable.
Common stock subject to stock options and warrants currently exercisable or exercisable within 60 days of the Record Date and restricted stock units that vest within 60 days of the Record Date are deemed to be outstanding for computing the percentage ownership of the person holding these options, warrants and restricted stock units and the percentage ownership of any group of which the holder is a member but are not deemed outstanding for computing the percentage of any other person.
Beneficial ownership is based on there having been 72,986,762 shares of our voting common stock outstanding as of the Record Date. Unless otherwise indicated, the address of each of the individuals and entities named below is c/o Spirit Airlines, Inc., 2800 Executive Way, Miramar, Florida 33025.
Shares of Common Stock Beneficially Owned
 
Name of Beneficial Owner

Common Stock

Securities
Exercisable or
Vesting
Within 60 Days

Number of
Shares
Beneficially
Owned

Percent
5% Stockholders:












FMR LLC (1)

10,915,034




10,915,034


15.0
%
BlackRock, Inc. (2)

5,989,042




5,989,042


8.2
%
The Vanguard Group (3)

4,418,368




4,418,368


6.1
%
Prudential Financial, Inc. (4)

3,937,780




3,937,780


5.4
%
Jennison Associates LLC (5)

3,674,349




3,674,349


5.0
%
Named Executive Officers and Directors:












B. Ben Baldanza

83,700




83,700


*

John Bendoraitis

3,188




3,188


*

Thomas Canfield

25,181




25,181


*

Edward M. Christie III

64,877




64,877


*

Robert A. Schroeter

11,098




11,098


*

Carlton D. Donaway

3,271




3,271


*

David G. Elkins

4,879




4,879


*

Robert L. Fornaro

718


359


1,077


*

H. McIntyre Gardner

6,359




6,359


*

Robert D. Johnson

3,879




3,879


*

Barclay G. Jones III

5,808




5,808


*

Stuart I. Oran

4,379




4,379


*

Horacio Scapparone

5,088




5,088


*

All 16 current directors and executive officers as a group

267,348


359


267,707


*


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*
Represents beneficial ownership of less than one percent of the outstanding shares of common stock.
(1)
Has a principal business address at 245 Summer Street, Boston, Massachusetts 02210.
(2)
Has a principal business address at 55 East 52nd Street New York, New York 10022.
(3)
Has a principal business address at 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
(4)
Has a principal business address at 751 Broad Street, Newark, New Jersey 07102.
(5)
Has a principal business address at 466 Lexington Avenue New York, New York 10017.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the year ended December 31, 2014 , all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with except that Mr. Ben Baldanza, our CEO, filed one Form 4 with respect to a single transaction not reported on a timely basis.


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NON-EMPLOYEE DIRECTOR COMPENSATION
We compensate our non-employee directors for their service on the Board, but do not pay director fees to our directors who are our employees. In October 2011, we adopted a non-employee director compensation policy which may be amended from time to time. For 2014 , each non-employee director was entitled to receive an annual cash retainer of $40,000 paid in quarterly installments and cash fees of $1,500 for attendance at each Board or committee meeting. Additionally, the Chairman of the Board, Chair of the Audit Committee, Chair of the Compensation Committee and chairs of any other standing Board committees received additional annual retainers of $70,000 (of which 50% was in the form of restricted stock units of equivalent value), $15,000 , $12,000 and $6,000 , respectively.
Non-employee directors were also entitled to receive an annual equity-based grant in the form of restricted stock units with a fair market value of $60,000 as of the grant date, vesting 100% one year from grant date unless settlement was deferred at the election of the non-employee director, and, in the case of new non-employee directors, an initial equity grant (in the form of restricted stock units) with a fair market value of $20,000 as of the grant date, vesting 100% one year from grant date unless settlement is deferred at the election of the non-employee director. Market value is computed by multiplying the number of restricted stock units by the average closing price per share of the Company’s common stock for the five trading days immediately preceding the grant date. On March 4, 2014, each of our then-serving non-employee directors received a grant of 1,071 restricted stock units with a vesting date of March 4, 2015, with Mr. Gardner receiving an additional 625 restricted stock units representing 50% in value of his annual retainer as Chairman of the Board. On May 12, 2014, Mr. Fornaro, who became a member of the Board effective May 2, 2014, received an initial grant of 359 restricted stock units with a vesting date of May 12, 2015 and a standard annual grant (prorated to reflect his May 2, 2014 start date) of 718 restricted stock units with a vesting date of March 4, 2015.
Non-employee directors are reimbursed for travel and other expenses incurred for attending meetings. Consistent with prevailing practice in the airline industry, non-employee directors are also afforded free positive space family travel benefits on our airline, in our case up to a maximum value of $5,000 per year.
2015 Director Compensation Policy Changes
In late 2014, the Compensation Committee requested an updated analysis of the terms and conditions of our non-employee director compensation policy from Towers Watson, who has served as its independent compensation advisor since 2011. The advisor undertook a detailed review of recent board compensation trends, including as to the form and amount of cash compensation and equity grants, chairperson retainers and stock ownership guidelines. The advisor benchmarked the Board's compensation against both an airline peer group as well as a small to mid-sized (based on revenues) general industry group, considering that the Company would be competing for director talent and experience from a variety of businesses. The analysis showed that the Board’s compensation fell at approximately the 50 th percentile among the population studied. The advisor's analysis also took into account certain subjective factors specific to the Company, such as the extraordinarily high degree of oversight provided by the Company's non-employee directors as well as the Compensation Committee's desire to not review non-employee director compensation again until 2017. After reviewing the data and analysis prepared by its advisor, the Compensation Committee approved, and the Board subsequently ratified, a revised non-employee director compensation policy. The revised policy, which was approved by the Compensation Committee on February 18, 2015 and ratified by the Board on March 17, 2015, increased the annual cash retainer for the non-employee directors to $50,000. The revised policy also increased the fair market value of the annual equity based grants to $95,000 at grant date and maintained the fair market value of the initial grants at $20,000 as of grant date. On February 18, 2015, each of our non-employee directors received a grant of 1,196 restricted stock units with a vesting date of February 18, 2016, granted under the 2015 Plan and subject to shareholder approval of the 2015 Plan (see Proposal No. 4). Also on February 18, 2015, Mr. Gardner received an additional grant of 441 restricted stock units with a vesting date of February 18, 2016, representing 50% in value of his annual retainer as Chairman of the Board, also granted under the 2015 Plan and subject to shareholder approval of the 2015 Plan (see Proposal No. 4). We maintain our deferral program by which each non-employee director may, at his election and prior to the grant date, defer settlement of 100% of his vested restricted stock units until the earliest of (a) 360, 720 or 1,080 days (the non-employee director must affirmatively select desired number of days); (b) a change of control; and (c) 30 days after termination of service.
In March 2014, the Compensation Committee approved a revision to the stock ownership guidelines for non-employee directors to require outright ownership of a minimum number of shares of our common stock. Under the revised guidelines, our non-employee directors are required to retain, within five years, equity interests at least equal to the lesser of (i) shares valued at $180,000, being 3.0 times the annual equity grant amount for non-employee directors (one-third of which must be owned outright in the form of shares of our common stock) and (ii) 10,000 shares (one-third of which must be owned outright in the

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form of shares of our common stock). All of our non-employee directors are currently in compliance with the revised guidelines.
The following table sets forth information concerning the compensation earned by our non-employee directors during the year ended December 31, 2014 .
 
Name
 
Fees Earned or Paid in Cash
 
Stock Awards (1)
 
Total
Carlton D. Donaway
 
$
79,000

 
$
63,200

 
$
142,200

David G. Elkins
 
$
81,195

 
$
63,200

  
$
144,395

Robert Fornaro
 
$
43,167

 
$
61,712

 
$
104,879

H. McIntyre Gardner
 
$
98,031

 
$
100,081

  
$
198,112

Robert D. Johnson
 
$
79,000

 
$
63,200

  
$
142,200

Barclay G. Jones, III
 
$
65,500

 
$
63,200

  
$
128,700

Stuart I. Oran
 
$
73,000

 
$
63,200

  
$
136,200

Horacio Scapparone
 
$
73,000

 
$
63,200

  
$
136,200

 
(1)
Amounts shown in the “Stock Awards” column represent the aggregate grant date fair value of restricted stock units granted during 2014 computed in accordance with FASB ASC Topic 718. The table below shows the aggregate numbers of unvested restricted stock unit awards outstanding for each non-employee director as of December 31, 2014 . None of the non-employee directors held any stock option awards as of December 31, 2014 .

Name
 
Restricted stock units
Carlton D. Donaway
 
1,071

David G. Elkins
 
1,071

Robert Fornaro (2)
 
1,077

H. McIntyre Gardner
 
1,696

Robert D. Johnson
 
1,071

Barclay G. Jones, III
 
1,071

Stuart I. Oran
 
1,071

Horacio Scapparone
 
1,071


(2)
Mr. Fornaro became a member of the Board effective May 2, 2014. On May 12, 2014, he received an initial equity based grant of 359 restricted stock units vesting 100% on May 12, 2015 and a prorated annual equity based grant of 718 restricted stock units vesting 100% on March 4, 2015.



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COMPENSATION DISCUSSION AND ANALYSIS
The following discussion and analysis of compensation arrangements of our named executive officers should be read together with the compensation tables and related disclosures set forth below. This discussion contains forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs.
Our Compensation Committee is responsible for establishing, implementing, and monitoring adherence to our compensation philosophy. We seek to ensure that the total compensation paid to our executive officers is fair, reasonable and competitive. Our Compensation Committee is appointed by the Board. In 2014 , our Compensation Committee determined the compensation for our CEO and all of our other named executive officers, or NEOs. During 2014 , the Compensation Committee continued to engage Towers Watson, an executive compensation advisory firm originally engaged by the Compensation Committee in 2011, as the Compensation Committee’s independent compensation advisor. Based on information provided by Towers Watson and by Company management, in March 2015 the Compensation Committee determined that no conflict of interest currently exists with, or was raised during the 2014 fiscal year by the work of, Towers Watson, and that Towers Watson is independent considering the factors enumerated by the SEC for evaluating advisor independence.
With respect to executive compensation earned in 2014 , the Compensation Committee based its decisions in part on comparative market data provided by its advisor, Towers Watson, in 2013 and 2014 . The Compensation Committee also considered input provided by our CEO with respect to compensation of our other NEOs. Decisions of our Compensation Committee pertaining to the compensation of our NEOs and the Company’s executive compensation programs are regularly reported to, and in many instances concurred in by, the full Board. We are committed to shareholder engagement, communication and transparency and when we design our compensation policies, we endeavor to ensure that management’s interests are aligned with those of our stockholders and support long-term value creation.
Our NEOs for 2014 were as follows:
B. Ben Baldanza, President and Chief Executive Officer
Edward M. Christie III, Senior Vice President and Chief Financial Officer
John Bendoraitis, Senior Vice President and Chief Operating Officer
Thomas C. Canfield, Senior Vice President, General Counsel and Secretary
Robert A. Schroeter, Vice President - Consumer Marketing
James M. Lynde, our former Senior Vice President - Human Resources (whose employment with the Company terminated on June 13, 2014)

EXECUTIVE SUMMARY

1.     2014 Performance Highlights
With our ultra low-cost, low-fare business model and by empowering our price-conscious customers to save money on air travel by offering low base fares with a range of optional services for a separate charge, we achieved, in 2014, our eighth consecutive year of profitability. In 2014, we delivered strong performance against our operational and corporate performance goals and progress towards our strategic business plan. Below are some of our most notable accomplishments in 2014:
Increased our net income to $225.5 million, compared to a net income of $176.9 million in 2013.
Achieved an operating profit margin of 18.4%, the highest in our history, despite a 1.0% decrease in revenue per available seat mile (driven by lower operating yields on relatively stable load factors year over year).
Ended the year with record operating revenues of $1,931.6 million.
Grew our passenger traffic by 18%.
Decreased our adjusted cost per available seat mile ex-fuel by 0.5% to 5.88 cents.
Increased our capacity by 17.9% as we grew our fleet of Airbus single-aisle aircraft from 54 to 65 aircraft.
Successfully launched service to 23 new markets.
Improved our on-time performance significantly year over year and maintained one of the highest completion factors in the industry.

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Our investors recognized our strong performance in 2014 with an increase in our stock price from $45.41 per share to $75.58 per share and in our market capitalization from $3.3 billion to $5.5 billion.
* The graph compares the cumulative total stockholder return on our common stock with the cumulative total return on the NYSE ARCA Airline Index and the NASDAQ Composite Index for the period beginning on May 26, 2011 (the date our common stock was first traded publicly) and ending on the last day of 2014 . The graph assumes an investment of $100 in our stock and the two indices, respectively, on May 26, 2011, and further assumes the reinvestment of all dividends. The May 26, 2011 stock price used for our stock is the initial public offering price. Stock price performance, presented for the period from May 26, 2011 to December 31, 2014 , is not necessarily indicative of future results.
2.    Executive Compensation Philosophy and Objectives
The market for experienced management is highly competitive in our industry. Our goal is to attract, motivate and retain executives with the talent and experience necessary for us to achieve our strategic business plan and to optimally manage each of our business functions. In doing so, we draw upon a pool of talent that is highly sought after within both the airline industry and elsewhere in the travel and hospitality industry. Within this talent pool, we seek out individuals who we believe will be able to contribute to our unique ultra low-cost operating model and our vision of future success, our culture and values, and who will enhance the cohesiveness and productivity of our leadership team. We regard as fundamental that executive officer compensation be structured to provide competitive base salaries and benefits to attract and retain superior employees, and to provide incentive compensation to motivate executive officers to attain, and to reward executive officers for attaining established financial, operational and other goals that are consistent with increasing stockholder value. Since our initial public offering in 2011, and with the input and assistance of its independent compensation advisor, our Compensation Committee has

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adhered to an executive compensation program designed to provide appropriately balanced mixes of (i) fixed versus at-risk variable compensation, (ii) annual versus long-term compensation and (iii) cash versus equity compensation. As more particularly described below, our executive compensation program is structured around three primary components: fixed base salary, annual cash incentive compensation (bonuses) linked to performance targets and equity-based long-term incentive compensation consisting of a combination of restricted stock and performance share units.
In determining the form and amount of compensation payable to the NEOs, we are guided by the following three objectives and principles:
Compensation levels should be competitive to attract and retain key executives. We aim to provide an executive compensation program that attracts, motivates and retains high performance talent and rewards them for our achieving and maintaining a competitive position in our industry. Total compensation ( i.e. , maximum achievable compensation) should increase with position and responsibility.
Compensation should relate directly to performance, and incentive compensation should constitute a significant portion of total compensation. We aim to foster a pay-for-performance culture, with a significant portion of total compensation being “at risk.” Accordingly, a significant portion of total compensation should be tied to and vary with our financial, operational and strategic performance, as well as individual performance. Executives with greater roles and the ability to directly impact our strategic goals and long-term results should bear a greater proportion of the risk if these goals and results are not achieved. The amount of “at risk pay” is structured accordingly.
Long-term incentive compensation should align executives’ interests with our stockholders’ interests.  Awards of long-term incentives, including equity-based compensation, encourage executives to focus on achieving our long-term growth objectives and incentivize executives to manage the Company from the perspective of stockholders with a meaningful stake in us, as well as to focus on long-term career orientation.
The mix of compensation elements for our NEOs in 2014 illustrates our strong emphasis on performance-based compensation:

* Based on average of actual 2014 amounts of Messrs. Bendoraitis, Canfield, Christie and Schroeter
Note: the compensation data for the above pie charts was determined as follows: "Base Salary" represents the salary earned and paid in 2014; "Annual Cash Incentive" represents the cash bonuses under the Company’s 2014 short term cash bonus program awarded in February 2014 and paid in February 2015 ; and "Long Term Incentive" represents the aggregate grant date fair value of restricted stock units and performance share units granted in 2014.



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What We Do and Do Not Do
WE DO
 
WE DO NOT
ü

Target total direct compensation for our NEOs at the market median (50th percentile overall)

 
û

Allow hedging or pledging of Company securities

ü
Pay for performance and, accordingly, a significant portion of each NEO's total compensation opportunity is "at risk"
 
û
Encourage unnecessary or excessive risk taking as a result of our compensation policies and practices
ü
Base our short-term incentive plan on more than one performance measurement, including both financial and operational metrics
 
û

Provide perquisites to our NEOs that are not generally offered to all other executives
ü
Complement our annual compensation to each NEO with time-based and performance-based multi-year vesting schedules for equity incentive awards granted for prior-year performance
 
û

Have employment agreements with any of our NEOs other than our CEO
ü

Select and use a peer group of similarly sized airlines to assess the compensation of our NEOs and a peer group of publicly traded airline companies to measure the Company's total shareholder return.
 
û

Provide a defined benefit pension plan or any supplemental executive retirement plan or other form of non-qualified retirement plan for our NEOs
ü
Maintain a clawback policy pursuant to which the Company can seek reimbursement of either cash or equity based incentive compensation in the event of a financial restatement

 
û

Provide for any "gross ups" for any excise taxes imposed with respect to Section 280G (change-in-control payments) or Section 409A (nonqualified deferred compensation) of the U.S. Internal Revenue Code of 1986, as amended (which we refer to as the "Code")
ü
Have stock ownership guidelines for our executives and non-employee directors

 
û

Provide for, under our 2011 Plan or our proposed 2015 Plan, single-trigger vesting acceleration upon a change in control of the Company unless the acquirer does not assume or replace the award
ü
Engage an independent compensation consultant to advise the Compensation Committee, which is comprised solely of independent directors

 
û

Allow, under our 2011 Plan or our proposed 2015 Plan, any repricing of stock options/stock appreciation rights without stockholder approval or unlimited transferability of awards
ü

Provide for, under our proposed 2015 Plan, minimum vesting of awards and maximum award limits
 
 
 
Consideration of 2014 Stockholder Advisory Vote on Executive Compensation
Since our initial public offering in 2011, all of our yearly "say on pay" proposals have received an approval rate from our stockholders of 95% or greater. At our annual meeting of stockholders last year, our stockholders once again expressed strong support for our compensation programs and the compensation of our NEOs, with an approval rate of approximately 98% for our management "say on pay" resolution. In light of this support and consistent with recommendations from its independent compensation advisor, the Compensation Committee made no significant changes to the overall design of our compensation program during 2014 . The Compensation Committee will continue to take into account stockholder feedback and evolving best practices in making compensation decisions in future years and will continuously endeavor to ensure that management’s interests are aligned with those of our stockholders and support long-term value creation.
Determination of Compensation
The Compensation Committee meets periodically to specifically review and determine adjustments, if any, to the CEO’s compensation, including his base salary, annual bonus compensation and long-term equity awards, and to review and consider recommendations of the CEO with respect to the other NEOs’ base salaries, annual bonus compensation and long-term equity awards. For 2014 , the Compensation Committee determined each individual component of compensation for our NEOs. Decisions of our Compensation Committee pertaining to the compensation of our NEOs and the Company’s executive compensation programs are regularly reported to, and in many instances concurred in by, the full Board. The Compensation Committee annually evaluates our company-wide performance against the approved operating plan for the prior fiscal year. The Compensation Committee also meets periodically to discuss compensation-related matters as they arise during the year. For each fiscal year, Mr. Baldanza, our CEO, evaluates each other NEO’s individual performance and contributions to the Company’s success and reports to the Compensation Committee his recommendations regarding each element of the other

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NEOs’ compensation. Mr. Baldanza does not participate in any formal discussion with the Compensation Committee regarding decisions on his own compensation, and he recuses himself from meetings when his compensation is discussed and decided.
In July 2011, the Compensation Committee engaged Towers Watson as an independent compensation advisor to assist the Compensation Committee with our executive compensation program design. Since that time, Towers Watson has worked closely with the Compensation Committee to determine an appropriate executive compensation strategy that supports our core business objectives: maintaining low costs, profitable growth, sound cash flow and safe and reliable operations. In considering approaches to executive compensation, the Compensation Committee also has reviewed ways to strengthen the alignment of management’s interests with the interests of shareholders, strengthen our ability to attract, motivate and retain key executive talent and design plans that account for the relatively high volatility of our industry.
In order to assist the Compensation Committee in setting appropriate compensation metrics and target amounts, in October 2013 and October 2014, Towers Watson provided an updated competitive assessment of our 2013 and 2014 executive compensation levels, respectively. After consideration, and based on recommendations from Towers Watson, the Compensation Committee approved the following public companies as an appropriate benchmarking peer group for compensation market comparison purposes for 2013 and 2014 (the "Compensation Peer Group"):
Alaska Air Group, Inc.
Allegiant Travel Company
Hawaiian Holdings Inc.
JetBlue Airways Corporation
Republic Airways Holdings Inc.
Sky West Inc.
The selection of companies for the Compensation Peer Group focused on small to medium-sized passenger carriers as an appropriate population for assessing the amounts and percentile rankings of compensation elements for NEOs, including base salaries, short-term incentives (bonuses) and long-term equity-based incentives. The Compensation Committee determined that the Company's competition for executive talent came significantly from these carriers. Towers Watson primarily used the Compensation Peer Group to assess the competitiveness of our Chief Executive Officer’s and Chief Operating Officer’s compensation, as these positions would normally be recruited from other passenger airlines.
In assessing the compensation of our Chief Financial Officer, General Counsel, and Vice President - Consumer Marketing, the consultant used a blended approach consisting of both Compensation Peer Group proxy data and broader industries survey data, adjusted for revenue size, as these positions could also be recruited from companies in other industries. For its October 2014 analysis, the survey data were pulled from the following three executive pay surveys:

Seabury 2014 Airline Industry Compensation Survey Analysis;
Towers Watson 2014 Compensation Data Bank (CDB) General Industry Executive Compensation Survey Report; and
William M. Mercer 2014 Executive Compensation Survey.
The data from the two general industry executive surveys were cut in scope to focus on companies with revenues approximating the Company’s last twelve months of revenues of approximately $1.8 billion as of June 30, 2014. The Compensation Committee was not aware of the individual participating companies in the surveys and reviewed the data in a summarized fashion.
At the same time, the Compensation Committee also approved the following larger group of publicly traded airline companies (the "Performance Share Peer Group") as an appropriate peer group for measuring total shareholder return under the performance share units awarded to our executive officers in the first quarter of 2014:
Alaska Air Group, Inc.
Allegiant Travel Company
American Airlines Group, Inc.
Delta Airlines

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Hawaiian Holdings Inc.
JetBlue Airways Corporation
Republic Airways Holdings Inc.
Sky West Inc.
Southwest Airlines
United Continental
The larger group of airlines was used for comparing the Company’s total shareholder return under our performance share units, because the Company believes it competes with all other public airline companies for equity investors.
US Airways was originally included in the Performance Share Peer Group for both the 2012 and 2013 awards of performance share units but was subsequently removed for both years, in the discretion of the Compensation Committee, based on that company's share price being affected by a pending merger with American Airlines, then in bankruptcy proceedings, which would cause the shares of US Airways to cease to trade once the merger was completed. With respect to the 2014 grants of performance share units, however, American Airlines Group, Inc. was added to the Performance Share Peer Group (as shown above) and will be considered for measuring total shareholder return. In December 2014, the Compensation Committee, following the recommendation of Towers Watson, added Virgin America, Inc. to the Compensation Peer Group as well as to the Performance Share Peer Group (for the 2015 award of performance share units), based on that company's completion of its initial public offering in November 2014.
The Compensation Committee has historically approved an overall guideline of total direct compensation for our senior management generally around the market median. Considering the strong "say on pay" approval rates from our stockholders in the past three years, such guideline remains in place to date. Within this general guideline, the Compensation Committee has approved the following based on our objectives and unique business model:
Base Salary : In keeping with the objective of maintaining low fixed costs and managing cash resources, base salaries would be set below market median levels.
Short-Term Incentive : In order to appropriately reward achievement of our annual business and financial objectives, short-term incentives would be set above market median levels.
Long-Term Incentive : To incentivize profitable longer term growth, increase alignment with shareholder interests and provide for retention of key talent, long-term equity-based incentives would be set slightly above market median levels.    
Our executive compensation philosophy contemplates that the Compensation Committee would annually select a mix of the foregoing compensation elements intended to deliver total target direct compensation (base salary, annual target incentive compensation and long-term target incentive compensation) for our executive officers, in the aggregate, at approximately the market 50 th percentile. However, the Compensation Committee reserved discretion to deviate from the above guidelines as necessary to account for changing industry characteristics, our particular business model, individual performance and other factors. Towers Watson’s October 2014 analysis indicated that, in the aggregate, our NEOs’ 2014 total target direct compensation (base salary plus target bonus opportunity plus equity compensation) continued to be aligned, as in prior years, with the desired pay positioning, approximating the 50 th percentile of the market.
Components of Compensation for 2014
For 2014 , our performance-driven compensation program for our NEOs consisted of four components:
base salary;
annual cash incentive program (bonus);
equity-based long-term incentives; and
benefits.
We are continuing to build our executive compensation program around each of the above elements because each individual component is useful in achieving one or more of the objectives of the program and we believe that, collectively, they are effective in achieving our overall objectives.

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Base Salary . We provide our NEOs and other employees with a base salary to compensate them for services rendered during the fiscal year. The base salary payable to each NEO is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. Base salary amounts are established based on consideration of, among other factors, the scope of the NEOs’ responsibilities, ability to contribute to the Company’s success, years of service and individual job performance and the Compensation Committee’s general knowledge of the competitive market, based on, among other things, experience with other companies and our industry and market data provided by Towers Watson.
In April 2014 , the base salaries for Messrs. Canfield and Christie were increased to $327,600 and $322,400 , respectively, representing an increase of 5% in both cases. Also in April 2014, for retention purposes (along with a one-time special equity award described in more detail in the "Equity-Based Incentives" section hereafter) and reflecting increased responsibilities, Mr. Schroeter's base salary was increased to $230,000 , representing an increase of 24.3% . For 2014, Mr. Baldanza, our CEO, and Mr. Bendoraitis, who joined the Company as chief operating officer in October 2013, did not receive a salary increase. The NEOs’ 2014 base salaries are set forth under the “Summary Compensation Table” below and are prorated to reflect the increases effective April 1, 2014 . The amount shown for Mr. Lynde is prorated to reflect his separation from the Company in June 2014.
Performance-based Annual Bonuses . Cash bonuses are intended to provide incentives to drive company-wide financial and operating performance. All of our NEOs and other executive officers are eligible for annual cash bonuses, which are determined annually based on achievement of a set of pre-established financial and operational performance metrics established for the year at or shortly after the time of the Board’s approval of the annual operating plan. The determination of the amount of annual bonuses paid to our executive officers also reflects a number of considerations by the Compensation Committee acting in its discretion, including the Company’s safety performance and a subjective evaluation of the individual performance of each executive officer during the relevant period.
Our annual incentive bonus program is administered by the Compensation Committee. For each year, the Compensation Committee approves (i) the performance metrics, (ii) the weighting of the performance metrics, (iii) the threshold, target and stretch performance levels for each metric and the percentage payouts for the performance levels (usually 50% for threshold, 100% for target and 200% for stretch) and (iv) the target bonuses for officer positions, expressed as a percentage of base salaries (usually 50% for vice presidents, 70% for senior vice presidents and 100% for the CEO). After the performance results for the year are available, the specific bonus payments are calculated using the formula embodied in the short-term incentive plan, but with such discretionary adjustments as the Compensation Committee may approve for certain officers based on their individual performances and other factors.

In February 2014, the Compensation Committee, based on a review of benchmarking and other data provided by its independent consultant, Towers Watson, and considering our Company objectives and operating plan for the year 2014, adopted our 2014 short-term incentive plan for our executive officers. The Compensation Committee determined that no payments under the 2014 plan would be made unless the Company achieved a minimum level of net income of $98 million. Based on the market data, the target bonus opportunity percentages were maintained at 100% of base salary for the CEO, 70% of base salary for senior vice presidents and 50% of base salary for vice presidents. Assuming the minimum net income amount was achieved, payout would be based on the Company's performance against the following metrics tied to our 2014 operating plan:
        
Metric
 
Payout Weight
 
Definition
Adjusted CASM ex-fuel
 
50%
 
Operating costs per available seat mile as adjusted for fuel, restructuring cost, gain or loss asset disposition, special items, distribution and marketing expense, equity compensation expense and bonus expense.
Adjusted Total RASM
 
30%
 
Operating revenue per available seat mile as adjusted for distribution and marketing expense.
Customer Experience Alignment (1)
 
10%
 
Improvement and overall results in various customer related factors including customer understanding of our business model, delivery of intended customer experience and management's understanding and successful leveraging of the drivers of profitable customer behavior.
Completion Factor
 
10%
 
Percentage of scheduled flights completed based on a ranking of performance relative to the following airlines: Delta Airlines, Frontier Airlines, JetBlue Airways Corporation, Southwest Airlines, United Continental, and American Airlines Group, Inc.
(1) Not tied directly to the Company's 2014 Operating Plan

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Except for the customer experience alignment metric for which a discretionary assessment by the Compensation Committee would be required, payout for each of the metrics would vary, on a linear basis, from $0, if results were below the threshold performance level, to 50% of target value if results were at the threshold performance level, to 100% of target value, if results were at the target performance level and up to 200% of target value, if results were at or above the stretch performance level. The Compensation Committee also reserved discretion to reduce payouts in light of safety events occurring during the year and also adjust for other factors it deems relevant in assessing actual performance in 2014 compared to our 2014 operating plan. The following table sets forth the target performance levels under the 2014 plan metrics, the weighting of the performance metrics, the actual performance results under each metric and the resulting payout percentages.
 
Metric and Weight
 
Target Level –
100% Payout
 
Actual 2014 Results
 
Payout Percentage
Adjusted CASM ex-fuel (50% weight)
 
5.43 cents
 
5.27 cents
 
100.00
%
Adjusted Total RASM (30% weight)
 
11.39 cents
 
11.32 cents
 
28.10
%
Customer Experience Alignment (10% weight)
 
N/A
(1
)
N/A
(1
)
15.00
%
Completion Factor (10% weight)
 
4 of 7
 
2 of 7
 
20.00
%
 
 
Total Achieved (% of target)
 
163.10
%
(1) During 2014, the Company undertook a major re-branding and customer education initiative. In December 2014, after considering the results of this brand and customer initiative, the Compensation Committee assessed the Company's performance results with respect to the customer experience alignment metric and rated the Company at 150% (between target and stretch levels), representing a payout percentage of 15%.
In February 2015, the Compensation Committee considered the Company’s performance under the metrics selected for 2014, namely adjusted CASM ex-fuel, adjusted RASM, customer experience alignment and completion factor. Based on Company performance under these 2014 metrics, the Compensation Committee approved a formulaic payout level for 2014 equal to 163.10% of target bonus opportunity. The Compensation Committee also reviewed the Company’s safety performance during 2014 and considered individual performance of Company officers, after receiving input from the CEO. In approving the 2014 annual cash bonus for the CEO, the Compensation Committee met in executive session and also considered individual performance factors. All bonuses were based on application of the 163.10% formulaic payout for 2014, based on the Company's performance, to the executives’ respective target bonus opportunity percentages as indicated below. The Compensation Committee did not make any discretionary adjustments to the payout of the 2014 annual cash bonuses. Based on the foregoing, the Compensation Committee approved annual cash bonuses with respect to 2014 as follows:
Named Executive Officers
 
2014 Target Bonus (as a percentage of Base Salary)
 
2014 Cash Bonus Payout (as a percentage of 2014 Base Salary)
 
Earned 2014 Cash Bonus ($)
B. Ben Baldanza (CEO)
 
100
%
 
163.10
%
 
789,567

John Bendoraitis (SVP)
 
70
%
 
114.17
%
 
365,344

Thomas C. Canfield (SVP)
 
70
%
 
112.81
%
 
369,568

Edward M. Christie III (SVP)
 
70
%
 
112.81
%
 
363,689

Robert A. Schroeter (VP)
 
50
%
 
78.23
%
 
179,920

Also in February 2015, after considering the efficacy of, and incentives created by the 2014 short-term incentive plan, the Compensation Committee made certain adjustments in approving a short-term incentive plan for 2015. Short-term performance metrics for 2015 consist of adjusted CASM ex-fuel, adjusted RASM, A:14 performance (arrival within 14 minutes of scheduled arrival time) and a courtesy rate based on customer complaints. Those factors were given weightings of 50%, 30%, 10% and 10%, respectively. In addition, the Compensation Committee set a minimum threshold trigger of $157 million of net income for any payout under the 2015 plan. Finally, the Compensation Committee again reserved, in its discretion, an ability to reduce cash payouts to any individual executive, or the entire group, based on safety related performance and other factors. Any and all short-term incentive awards in 2015 will qualify as performance-based compensation under Section 162(m) and, accordingly, will be awarded under the proposed 2015 Plan, subject to our stockholders' approval (see Proposal No. 4).
As described below, we maintain a clawback policy covering incentive compensation (cash and equity-based) paid to our executive officers to further align management with the interests of stockholders over the long-term.

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Equity-based long-term incentives . We believe that long-term performance is strengthened through an ownership culture that rewards and encourages long-term performance by our executive officers through the use of cash and equity-based awards. Our 2011 Equity Incentive Award Plan, or the 2011 Plan, became effective on May 9, 2011, shortly before our initial public offering. The Board adopted the 2011 Plan in order to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentives to our employees and consultants, and to promote the success of our business. The 2011 Plan was approved by our stockholders on May 19, 2011. Prior to the adoption of the 2011 Plan, we historically granted awards of time-vested restricted stock or stock options. Since the adoption of the 2011 Plan, long-term incentive awards have consisted solely of restricted stock units and performance share units, the latter of which are settled in shares at the end of a three-year measurement period, except that in 2015 we awarded shares of restricted stock in lieu of restricted stock units.
The equity awards we make to our executive officers are designed to align our executives’ compensation with demonstrable long-term Company performance and to reward superior performance (measured both against internal goals and peer performance), align their interest in building value with that of our shareholders by promoting equity ownership and to enhance retention of key senior management talent.
In January 2014, the Company and Mr. Baldanza entered into an Amended and Restated Employment Agreement. In connection with such agreement and for retentive purposes, the Compensation Committee approved, subject to the execution by Mr. Baldanza of a general release, a one-time special award of 63,803 restricted stock units to Mr. Baldanza under the 2011 Plan subject to the following vesting schedule: 23,926 on July 10, 2015; 7,975 on January 10, 2016; 15,951 on January 10, 2017; and 15,951 on January 10, 2018. The Company and Mr. Baldanza agreed that these restricted stock units and the underlying shares, even if and when vested and deliverable, would not be counted toward Mr. Baldanza’s stock ownership requirements under the Company’s stock ownership guidelines for executives, and the restricted stock units and underlying shares, even if and when vested and deliverable, cannot be sold or transferred until the earlier of January 10, 2018 or Mr. Baldanza’s death.
In March 2014, after reviewing various alternative equity plan design alternatives, and considering data provided by Towers Watson on industry practices in equity compensation, the Compensation Committee granted equity-based awards under the 2011 Plan to our NEOs as follows: 26,498 units to Mr. Baldanza, 8,036 to Mr. Bendoraitis , 8,518 units to each of Messrs. Canfield and Christie, 8,036 units to Mr. Lynde and 3,572 units to Mr. Schroeter. One-half of each award consisted of restricted stock units, vesting in annual 25% increments over four years. The other half of each award consisted of performance share units. The performance share units are settled in shares of common stock, in an amount from 0% to 200% of the number of performance share units awarded, based on the Company’s total shareholder return compared to that of the Performance Share Peer Group over the three-year period commencing on January 1, 2014 and ending on December 31, 2016, with threshold, target and maximum settlement payouts set at 25%, 100% and 200% respectively. Regardless of the ranking among the Performance Share Peer Group, if the Company's total shareholder return were negative, the corresponding number of shares issued, if any, would be reduced by 50%. The members of the Performance Share Peer Group for 2014 were Alaska Air Group, Allegiant Travel Company, American Airlines Group, Inc., Delta Air Lines, Hawaiian Holdings, JetBlue Airways, Republic Airways Holdings, Skywest, Southwest Airlines, and United Continental.
Also in March 2014 and solely for retentive purposes, the Compensation Committee granted special equity awards under the 2011 Plan as follows: 8,929 restricted stock units to each of Messrs. Bendoraitis, Canfield and Christie and 2,534 restricted stock units to Mr. Schroeter, all of which vest 100% in March 2018. The Company and each of Messrs. Bendoraitis, Canfield and Christie agreed that such restricted stock units would not be counted toward their respective stock ownership requirements under the Company’s stock ownership guidelines for executives.
Throughout 2014 and early 2015, the Compensation Committee reviewed the 2011 Plan and, with recommendations from independent legal counsel and Towers Watson, determined that adopting a new incentive award plan would be in the best interest of the Company. The new incentive award plan, which we refer to as the 2015 Plan (as described in Proposal No. 4), was designed and developed by the Compensation Committee, with input from its independent legal counsel and Towers Watson. Among other things, the 2015 Plan is generally designed to comply with Section 162(m) in order to enable the Company to take company tax deductions in respect of certain performance-based compensation payable to our Section 162(m) executive officers without regard to the limitations of Section 162(m). Since the date of our initial public offering in June 2011, we have not been subject to the provisions of Section 162(m) because of a transitional relief exception under Section 162(m) that applies to newly-public companies. However, this transitional relief expires on the date of the Annual Meeting. For further discussion, see "Tax and Accounting Considerations" below.
In order to take advantage of the transitional relief period provided by Section 162(m), the Compensation Committee decided, with respect to the long-term incentive awards granted in February 2015, to slightly modify the historical framework of awards of 50% restricted stock units and 50% performance share units to 50% shares of restricted stock (granted under the 2011 Plan) and 50% performance share units (granted under the 2015 Plan and subject to shareholder approval of the 2015

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Plan). In addition, for the 2015 performance share units, the Compensation Committee decided to add Virgin America, Inc., based on that company's completion of its initial public offering in November 2014, to the Performance Share Peer Group used to measure relative total shareholder return. All other core terms of the performance share units were maintained for 2015, including a 50% reduction of payouts if the Company’s total shareholder return were negative over the measurement period (even if all peer members’ returns were also negative).
The Compensation Committee granted equity-based awards to our NEOs for 2015 as follows:
Under the 2011 Plan: 9,918 shares of restricted stock to Mr. Baldanza, 3,188 shares of restricted stock to each of Messrs. Bendoraitis, Canfield and Christie, and 1,417 shares of restricted stock to Mr. Schroeter.These awards will vest in annual 25% increments over four years.
Under the 2015 Plan (which grants are subject to our shareholders' approval of the 2015 Plan - See Proposal No. 4 for details): 9,918 performance share units to Mr. Baldanza, 3,188 performance share units to each of Messrs. Bendoraitis, Canfield and Christie, and 1,417 performance share units to Mr. Schroeter. The performance share units are settled in shares of common stock, in an amount from 0% to 200% of the number of units awarded, based on the Company’s total shareholder return compared to that of the Performance Share Peer Group over the three-year period commencing on January 1, 2015 and ending on December 31, 2017.
As described below, the Company maintains a clawback policy covering incentive compensation (cash and equity-based) paid to our executive officers to further align management with the interests of shareholders over the long-term.
Benefits. We provide the following benefits to our NEOs. These are the same benefits provided to all our employees:
medical, dental and vision insurance;
life insurance, accidental death and dismemberment and business travel and accident insurance;
employee assistance program;
health and dependent care flexible spending accounts;
short and long-term disability; and
401(k) plan.
In addition, we provide supplemental life insurance to our employees at the director level and above, including our executive officers.
Severance and Change in Control-Based Compensation . Our NEOs participate in the Company's 2007 executive severance plan. Under the 2007 executive severance plan, in the event of (i) an involuntary termination of the executive without cause, or (ii) a voluntary resignation by the executive for good reason within thirty days following a change in control, each participant that holds a senior vice president or higher position is entitled to receive, subject to, among other things, execution of a general release, continuation of base salary payments and COBRA coverage for 12 months, a free family travel pass on our flights for 12 months and use of a blackberry for 30 days in order to allow the participant to transition to another device. Similar benefits, but at a lower level of cash severance payout, are available under the 2007 executive severance plan for our vice presidents and director-level employees. The 2007 severance plan also references the benefits provided under our equity plans. Restricted stock units granted to executive officers under our 2011 Plan are subject to accelerated vesting in the event the executive officer dies or becomes permanently disabled while still employed by the Company or in the event of a termination of the executive officer by the Company without cause or a voluntary resignation by the executive officer for good reason, in either case after the Company has entered into a definitive change in control agreement. Performance share units granted to our executive officers under our 2011 Plan will automatically terminate in the event the executive officer's employment terminates for any reason prior to the end of the three-year performance period except that the Company would be subject to a prorated settlement obligation in the event of a change in control or the executive officer’s death or permanent disability during the three-year measurement period. If approved by our stockholders, our 2015 Plan (which is described in more detail in Proposal No. 4 herein) includes similar provisions regarding treatment of outstanding equity awards in the event of death, permanent disability or change in control. The benefits provided under the 2007 executive severance plan are in lieu of any other benefits provided under any other Company policy, plan or arrangement, including any benefits provided under any employment agreement.
In October 2014, the Compensation Committee approved an amendment to the 2007 executive severance plan, with an effective date of September 1, 2014 and applicable to participants whose employment with the Company commenced on or after such date, to (i) allow the Board to terminate an officer for poor performance without triggering severance benefits; and

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(ii) provide that unpaid severance benefits would be offset by compensation earned by a former employee from a new employer. These provisions do not apply to our NEOs as their respective employment start dates precede September 1, 2014.
In January 2014, the Company and Mr. Baldanza entered into an Amended and Restated Employment Agreement for the purpose of creating certain incentives for Mr. Baldanza to continue employment in his current position as President and Chief Executive Officer and to make certain other modifications to the terms of Mr. Baldanza's prior employment agreement. Under the Amended and Restated Employment Agreement, if the Company terminates Mr. Baldanza’s employment without cause, Mr. Baldanza will be entitled to receive an amount in cash equal to two times his annual base salary, payable in equal installments over a 24-month period. In addition, he will receive any unpaid bonus for the fiscal year preceding the fiscal year in which his termination occurs and, in the event Mr. Baldanza ceases to be employed by the Company for any reason other than for cause or a resignation by Mr. Baldanza for any reason, he will also receive a prorated bonus for the fiscal year in which his termination occurs. The foregoing severance benefits are to be reduced by the amount of any other severance payable to Mr. Baldanza under the Company’s 2007 executive severance plan, and are conditioned on Mr. Baldanza's continued compliance with the non-disclosure, non-competition and non-solicitation provisions therein and Mr. Baldanza's execution of a general release in the form attached to the Amended and Restated Employment Agreement. The Amended and Restated Employment Agreement contains non-competition and non-solicitation covenants of Mr. Baldanza that will remain in effect for twelve months after his termination date and for as long thereafter as he is entitled to receive severance payments. If the Company terminates Mr. Baldanza’s employment without cause or Mr. Baldanza resigns from his employment, the Company will provide him with health insurance benefits until he reaches 65 years of age or becomes entitled to similar health insurance benefits from another employer. If the Company terminates Mr. Baldanza's employment without cause, Mr. Baldanza, his spouse and dependents will receive a lifetime travel pass on Company aircraft. If Mr. Baldanza’s employment is terminated for any reason other than due to death or a termination by the Company for cause, and at the time of such termination, he is at least 60 years of age or has served as Chief Executive Officer and/or President of the Company for at least 10 years, the Company will provide him, his spouse and dependents a lifetime travel pass on Company aircraft, subject to certain restrictions.
On June 13, 2014, Mr. Lynde's employment with the Company terminated. Mr. Lynde did not receive any severance or other benefits under the Company's 2007 executive severance plan in connection with his separation from the Company. Pursuant to an agreement entered into by Mr. Lynde and the Company in November 2014, in settlement of any pending disputes and in lieu of receiving any severance or other benefits under the Company's 2007 executive severance plan, Mr. Lynde received, in 2014, $35,750 as severance and $2,592 as reimbursement of COBRA premiums, for a combined total amount of $38,342. Under the same agreement, Mr. Lynde is entitled to receive further payments through November 2015 (amounting to approximately $1,000,000 in the aggregate between the combined 2014 and 2015 payments) as well as flight benefits on us through November 2017.
Perquisites . Perquisites are not a significant part of our executive compensation program. As is common in the airline industry, senior executives and their immediate families are entitled to certain travel privileges on our flights, which may be on a positive space basis. Similar travel benefits (which generally are on a space available basis) are afforded to all of our director-level employees and above. The value of such flight benefits for the executives is reported as taxable income. We believe that providing these benefits is a relatively inexpensive way to enhance the competitiveness of the executive’s compensation package. We do not provide any other significant perquisites or personal benefits to our NEOs. In addition, in circumstances where the Company is recruiting an executive candidate who would have to relocate to accept our job offer, we provide such executive with relocation assistance, which includes travel, shipping household goods and temporary housing. Relocation benefits are an important tool for us to recruit and retain key management talent. During 2014, the Company did not provide any relocation benefits to any of its NEOs.
Stock Ownership Guidelines for Executives . In March 2014, the Compensation Committee approved a revision to the stock ownership guidelines for our executive officers to require outright ownership of a certain minimum number of shares of our common stock. Under the revised guidelines, our NEOs are required to retain, within five years, equity interests (consisting of shares of common stock and restricted stock units but excluding performance share units) equal to the lesser of (i) a value of 1.5 times base salary (3.0 times salary for the CEO) of which one-third must be owned outright in the form of shares of our common stock, and (ii) 30,000 units of equity (90,000 units for the CEO) of which one-third must be owned outright in the form of shares of our common stock. Also under the revised guidelines, our other executive officers (non-NEOs) are required to retain, within five years, equity interests consisting of shares of common stock and restricted stock units but excluding performance share units) equal to the lesser of (i) a value of 1.0 times base salary of which one-third must be owned outright in the form of shares of our common stock, and (ii) 15,000 units of equity of which one-third must be owned outright in the form of shares of our common stock. All of our executive officers, including our NEOs, are currently in compliance with the revised guidelines.
Clawback Policy . We maintain a clawback policy, pursuant to which the Company may seek reimbursement of incentive compensation (cash and equity-based) paid to executive officers on the basis of reported financial results that were later the

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subject of a financial statement restatement. Reimbursement under the policy, which became effective January 1, 2014, is limited to the extent the incentive compensation would have been less had it been based on the restated financial results.
Tax and Accounting Considerations . The Board and the Compensation Committee generally consider the financial accounting and tax implications of their executive compensation decisions. The Board's and Compensation Committee's general policy is that compensation should qualify as tax deductible to the Company for federal income tax purposes whenever possible, to the extent consistent with our overall compensation goals. We have not been subject to the provisions of Section 162(m) because of a transitional relief exception under such section that applies to newly-public companies. However, this transitional relief expires on the date of the Annual Meeting, and after such expiration the Company will be subject to the deductibility limits imposed by Section 162(m).
Under Section 162(m), compensation paid to certain of our NEOs (other than our chief financial officer) in excess of $1.0 million per year is not deductible unless the compensation is “performance-based” as described in the regulations under Section 162(m). Compensation is generally “performance-based” if it is determined using pre-established objective formulas and criteria approved by stockholders within the past five years. Our proposed 2015 Plan (as described in Proposal No. 4) is intended to enable the Company to satisfy the performance-based compensation exception to Section 162(m). We are requesting approval of the 2015 Plan by our stockholders at the Annual Meeting.
Our Compensation Committee does not believe that compensation decisions should be determined solely by how much compensation is deductible for federal income tax purposes. As a result, our Compensation Committee has authorized non-deductible compensation and retains the discretion to authorize payments that may not be deductible if it believes that such payments are in the best interests of the Company and its stockholders. Moreover, changes in applicable tax laws and regulations as well as factors beyond the control of the Compensation Committee can adversely impact the deductibility of compensation paid to our executive officers who are covered by Section 162(m).

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REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing of Spirit under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s 2014 Annual Report on Form 10-K.
Compensation Committee
David G. Elkins, Chairman
Robert L. Fornaro
Horacio Scapparone




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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth all of the compensation awarded to, earned by or paid to our NEOs during the past three fiscal years.
Name and Principal Position
During 2014
Year
Salary
($)

Bonus
($)

Stock
Awards
($) (1)

Option
Awards
($)
 
Non-Equity
Incentive Plan
Compensation
($) (2)

All Other
Compensation
($) (3)
 
Total
($)
B. Ben Baldanza
2014
484,100





4,885,139




 
789,567



8,262

 
6,167,068

Chief Executive Officer and President
2013
479,987





1,609,344




 
718,455



7,888

 
2,815,674

2012
470,000





2,182,375




 
329,000



7,544

 
2,988,919

Edward M. Christie III 
2014
318,550





1,114,429





 
363,689



368

 
1,797,036

Senior Vice President and Chief Financial Officer
2013
304,958





606,375




 
319,527



760

 
1,231,620


2012
187,500





2,791,100

(4
)

 
161,700



32,520

 
3,172,820

John Bendoraitis
2014
320,000





1,081,183





 
365,344



6,564

 
1,773,091

Senior Vice President and Chief Operating Officer
2013
64,410

(5
)
115,000

(6)
1,891,486

(7
)

 
61,083

(8
)
30,041

 
2,162,020

Thomas C. Canfield
2014
323,700





1,114,429





 
369,568



294

 
1,807,991

Senior Vice President, General Counsel and Secretary
2013
308,500





517,563




 
323,238



283

 
1,149,584


2012
300,000





641,875




 
147,000



194

 
1,089,069

Robert A. Schroeter (9)
2014
220,625





396,797



 
179,920


5,222

 
802,564

Vice President - Consumer Marketing












 





 


James M. Lynde (10)
2014
138,646

(11
)


554,283

(12
)



(13
)
42,437

(14
)
747,355

Senior Vice President - Human Resources
2013
282,792




517,563


—  


278,011


8,560



1,086,926

 
(1)
Amounts shown in the “Stock Awards” column for 2014 represent the aggregate grant date fair value of restricted stock units and performance share units granted on each year as indicated and computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions used to determine the grant date fair values, see Note 8, “Stock-Based Compensation”, to our Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 . The single measure that determines the number of units to be earned for the performance unit shares granted during 2014 is our total shareholder return, or TSR, compared with the average of TSRs of companies in our peer group, all computed over the performance period, which is a market condition as defined under FASB ASC 718. Since these awards do not have performance conditions as defined under ASC 718, such awards have no maximum grant date fair values that differ from the fair values presented in the table above.
(2)
Amounts shown in the “Non-Equity Incentive Plan Compensation” column for 2014 represent cash bonuses under the Company’s 2014 short term cash bonus program awarded in February 2014 and paid in February 2015 , as disclosed more fully under the Compensation Discussion and Analysis section of this Proxy Statement.
(3)
Amounts under the “All Other Compensation” column consist of 401(k) company-matching contribution, company-paid life insurance and accidental death and dismemberment insurance premiums, and travel benefits. The amounts for 2014 are as follows:
Name

401(k)Plan Company Contributions
($) (a)

Company-Paid Life Insurance and Accidental Death
and Dismemberment Insurance Premiums ($)

Travel Benefits ($)
Mr. Baldanza

7,800


162


300

Mr. Christie



162


206

Mr. Bendoraitis

6,333


162


69

Mr. Canfield



162


132

Mr. Schroeter
 
4,894

 
162

 
166

Mr. Lynde
 
3,933

 
162

 
561

 

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(a)
See Note 13 (Defined Contribution 401(k) Plan) to our Financial Statements in our 2014 Annual Report for a description of employer matching contributions made under our defined contribution 401(k) plans.
(4)
Upon commencement of employment on April 16, 2012, Mr. Christie was granted 47,500 restricted stock units and 47,500 performance share units, on the same vesting and other terms as for the other executive officers.
(5) Mr. Bendoraitis' 2013 base salary was prorated to reflect his October 21, 2013 employment start date.
(6)
Upon commencement of employment on October 21, 2013, Mr. Bendoraitis received a signing bonus in the amount of $115,000.
(7)
Upon commencement of employment on October 21, 2013, Mr. Bendoraitis was granted 16,197 restricted stock units and 16,197 performance share units, on the same vesting and other terms as for the other executive officers.
(8)
Mr. Bendoraitis' 2013 short-term cash incentive bonus was prorated to reflect his October 21, 2013 employment start date.
(9)
Mr. Schroeter was not a NEO in 2013 or 2012.
(10)    Mr. Lynde's employment with the Company terminated on June 13, 2014.
(11) Mr. Lynde's 2014 base salary was prorated to reflect his June 13, 2014 separation date.
(12) Upon Mr. Lynde's separation from the Company on June 13, 2014, his outstanding and unvested stock awards were forfeited and canceled.
(13) Due to his separation from the Company, effective June 13, 2014, Mr. Lynde did not participate in the Company's 2014 short-term cash bonus program.
(14) In addition to the amounts listed under footnote 3, pursuant to an agreement entered into by Mr. Lynde and the Company in November 2014, in settlement of any pending disputes and in lieu of receiving any severance or other benefits under the Company's 2007 executive severance plan, Mr. Lynde received, in 2014, $35,750 as severance and $2,592 as reimbursement of COBRA premiums, for a combined total amount of $38,342. Under the same agreement, Mr. Lynde is entitled to receive further payments through November 2015 (amounting to approximately $1.0 million in the aggregate between the combined 2014 and 2015 payments) as well as flight benefits on us through November 2017.
Grants of Plan-Based Awards in 2014
The following table sets forth certain information with respect to grants of plan-based awards to our NEOs for 2014 .
 
 
 
Estimated Possible Payouts Under Non-
Equity Incentive Plan Awards (1) ($)
 
Estimated Future Payouts
Under Equity Incentive
Plan Awards (2) (#)
All  Other
Stock
Awards:
Number of
Shares
of Stock or
Units (3)
(#)
 
Grant Date Fair
Market Value of
Stock Awards (4) ($)
Name
Grant
Date
Committee
Action
Date
Threshold
 
Target
 
Maximum
 
Threshold
Target
Maximum
B. Ben Baldanza
 
 
242,050

 
484,100

 
968,200

 
 
 
 
 
 
 
 
3/4/2014
3/4/2014
 
 
 
 
 
 
6,625

13,249

26,498

 
 
1,045,845

 
1/10/2014
1/10/2014
 
 
 
 
 
 
 
 
 
63,803

(5
)
3,031,281

 
3/4/2014
3/4/2014
 
 
 
 
 
 
 
 
 
13,249

 
781,823

Edward M.
Christie III
 
 
161,200

 
322,400

 
644,800

 
 
 
 
 
 
 
 
3/4/2014
3/4/2014
 
 
 
 
 
 
2,130

4,259

8,518

 
 
336,196

 
3/4/2014
3/4/2014
 
 
 
 
 
 
 
 
 
13,188

(6
)
778,224

John Bendoraitis
 
 
160,000

 
320,000

 
640,000

 
 
 
 
 
 
 
 
3/4/2014
3/4/2014
 
 
 
 
 
 
2,009

4,018

8,036

 
 
317,172

 
3/4/2014
3/4/2014
 
 
 
 
 
 
 
 
 
12,947

(6
)
764,002

Thomas C. Canfield
 
 
163,800

 
327,600

 
655,200

 
 
 
 
 
 
 
 
3/4/2014
3/4/2014
 
 
 
 
 
 
2,130

4,259

8,518

 
 
336,196

 
3/4/2014
3/4/2014
 
 
 
 
 
 
 
 
 
13,188

(6
)
778,224

Robert A. Schroeter
 
 
115,000

 
230,000

 
460,000

 
 
 
 
 
 
 
 
3/4/2014
3/4/2014
 
 
 
 
 
 
893

1,786

3,572

 
 
140,983

 
3/4/2014
3/4/2014
 
 
 
 
 
 
 
 
 
1,786

 
105,392

 
3/13/2014
3/13/2014
 
 
 
 
 
 
 
 
 
2,534

(7
)
150,418

James A. Lynde (8)
 
 

 

 

 
 
 
 
 
 
 
 
(1)
The amounts in the table above reflect the threshold, target and maximum payouts under the Company’s 2014 short term cash bonus program, as disclosed more fully under the Compensation Discussion and Analysis section of the Proxy Statement.

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(2)
The amounts in the table above reflect the threshold, target and maximum number of shares issuable with respect to performance share units granted in March 2014. The performance share units are settled in shares of common stock, in an amount from 0% to 200% of the number of units awarded, based on the Company’s total shareholder return compared to that of ten peer airlines over the three-year period commencing on January 1, 2014 and ending on December 31, 2016.
(3)
Except as noted in footnotes 5, 6 and 7, amounts in the table reflect restricted stock units awarded in 2014 , vesting in annual 25% increments over four years following the grant date.
(4)
Amounts shown in this column represent the aggregate grant date fair value of restricted stock unit awards and the performance share awards granted during 2014 as computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions used to determine the grant date fair values in 2014 , see Note 8. “Stock-Based Compensation” to our Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 .
(5)
Amount reflects restricted stock units awarded in 2014 , vesting as follows: 23,926 units vest on July 10, 2015; 7,975 units vest on January 10, 2016; 15,951 units vest on January 10, 2017; and 15,951 units vest on January 10, 2018.
(6) Amount includes 8,929 restricted stock units awarded in 2014 , vesting 100% on March 4, 2018.
(7) Amount reflects restricted stock units awarded in 2014 , vesting 100% on March 13, 2018.
(8) Mr. Lynde's employment with the Company terminated on June 13, 2014 and as such was not eligible to participate in the Company's 2014 short term cash bonus program. Per our 2011 Plan, Mr. Lynde's unvested equity awards were forfeited and canceled upon his separation from the Company.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards
Employment Agreements and Offer Letters
B. Ben Baldanza . On January 24, 2005, we entered into an employment agreement with B. Ben Baldanza, our current President and Chief Executive Officer. As noted above, such agreement was amended and restated on January 8, 2014 (the "Amended and Restated Employment Agreement"). Under the Amended and Restated Employment Agreement, Mr. Baldanza will continue in his role as Chief Executive Officer and President of the Company and is entitled to receive an annual base salary of $484,100, which salary will be reviewed annually but may not be decreased without Mr. Baldanza’s consent. Mr. Baldanza also will be eligible to receive a bonus at the end of each fiscal year based upon his performance and the Company’s financial results. The amount of any annual bonus will be determined in the discretion of our Compensation Committee, based on a target of 100% of annual base salary and maximum of 200% of annual base salary. Additionally, pursuant to the Amended and Restated Employment Agreement, Mr. Baldanza received, under our 2011 Plan, a one-time special award for retention purposes of 63,803 restricted stock units with the following vesting schedule: 23,926 on July 10, 2015; 7,975 on January 10, 2016; 15,951 on January 10, 2017; and 15,951 on January 10, 2018. The Company and Mr. Baldanza agreed that these restricted stock units and the underlying shares, even if and when vested and deliverable, would not be counted toward Mr. Baldanza’s stock ownership requirements under the Company’s stock ownership guidelines for executives, and the restricted stock units and underlying shares, even if and when vested and deliverable, cannot be sold or transferred until the earlier of January 10, 2018 or Mr. Baldanza’s death. If the Company terminates Mr. Baldanza’s employment without cause, Mr. Baldanza will be entitled to receive an amount in cash equal to two times his annual base salary, payable in equal installments over a 24-month period. In addition, he will receive any unpaid bonus for the fiscal year preceding the fiscal year in which his termination occurs and in the event Mr. Baldanza ceases to be employed by the Company for any reason other than for cause or a resignation by Mr. Baldanza for any reason, he will also receive a prorated bonus for the fiscal year in which his termination occurs. If the Company terminates Mr. Baldanza's employment without cause or Mr. Baldanza resigns from his employment, the Company will provide him with health insurance benefits until he reaches 65 years of age or becomes entitled to similar health insurance benefits from another employer. If the Company terminates Mr. Baldanza's employment without cause, Mr. Baldanza, his spouse and dependents will receive a lifetime travel pass on Company aircraft. If Mr. Baldanza's employment is terminated for any reason other than due to death or a termination by the Company for cause, and at the time of such termination, he is at least 60 years of age or has served as Chief Executive Officer and/or President of the Company for at least 10 years, the Company will provide him, his spouse and dependents a lifetime travel pass on Company aircraft, subject to certain restrictions. The foregoing severance benefits are to be reduced by the amount of any other severance payable to Mr. Baldanza under the Company’s 2007 executive severance plan, and are conditioned on Mr. Baldanza's continued compliance with the nondisclosure, non-competition and non-solicitation provisions of the Amended and Restated Employment Agreement and Mr. Baldanza's execution of a general release in the form attached to the Amended and Restated Employment Agreement.
Edward M. Christie III . On February 29, 2012, we entered into an offer letter with Edward M. Christie III, our current Senior Vice President and Chief Financial Officer. Under that letter agreement, Mr. Christie is entitled to receive an annual base salary from us initially set at $300,000 and a target bonus level of 70% of base salary with a maximum payout capped at 200% of base salary. In addition, the agreement provided for a sign-on grant of 95,000 units of equity-based long-term incentive, under our 2011 Plan, which grant was comprised 50% of time-vested restricted stock units and 50% of performance share units, on the same terms as the 2012 grants for other senior officers. The letter agreement also provided a relocation allowance for Mr. Christie and his family of up to $75,000 (subject to documentation of expenses actually incurred) and positive space travel on our airline for the executive and his immediate family.

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John Bendoraitis . On September 7, 2013, we entered into an offer letter with John Bendoraitis, our current Senior Vice President and Chief Operating Officer. Under that letter agreement, Mr. Bendoraitis is entitled to receive an annual base salary from us initially set at $320,000 and a target bonus level of 70% of base salary with a maximum payout capped at 200% of base salary. In addition, pursuant to his employment letter agreement, Mr. Bendoraitis provided for a sign-on grant of 32,394 units of equity-based long-term incentive, under our 2011 Plan, which grant was comprised 50% of time-vested restricted stock units and 50% of performance share units, on the same terms as the 2013 grants for other senior officers. The letter agreement also provided for a signing cash bonus of $115,000, a relocation allowance for Mr. Bendoraitis and his family of up to $60,000 (subject to documentation of expenses actually incurred) and positive space travel on our airline for the executive and his immediate family.
Thomas C. Canfield . On September 10, 2007, we entered into an offer letter with Thomas C. Canfield, our current Senior Vice President, General Counsel and Secretary. Under the agreement, Mr. Canfield is entitled to receive an annual base salary from us initially set at $275,000, a target bonus at 50% of base salary with the maximum payout capped at 200% of base salary. In addition, the agreement provided for a grant of 75,000 shares of restricted stock to Mr. Canfield in connection with his commencement of employment, in accordance with the terms of our 2005 Stock Plan. The letter agreement also provides for positive space travel on our airline for the executive and his immediate family.
Robert A. Schroeter . On June 17, 2005, we entered into an offer letter with Robert A. Schroeter, our then Director of Interactive Marketing and currently our Vice President - Consumer Marketing. Under the agreement, Mr. Schroeter is entitled to receive an annual base salary from us initially set at $94,000, a one time bonus payment of $10,000 payable no later than his one-year anniversary, and participation in a profit sharing plan which is no longer in effect. The letter agreement also provides for space available travel on our airline and other airlines for the employee and his family as well as a relocation allowance of up to $10,000 (subject to documentation of at least 90% of the expenses actually incurred) plus payment of meals and temporary housing for up to 42 days during the relocation period.

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Table of Contents


Outstanding Equity Awards at December 31, 2014
The following table lists all outstanding equity awards held by our NEOs as of December 31, 2014 .
 
 
 
Option Awards
 
Stock Awards
Name
Vesting
Commencement
Date
 
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
 
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
 
Option
Exercise
Price
($)
 
Option
Expiration
Date
 
Number
of Shares
of  Stock
that Have
Not
Vested
(#)
 
Market  Value
of Shares of
Stock that Have
Not Vested ($)
(1)
Equity
Incentive  Plan
Awards:
Number of
Unearned
Shares, Units
or Rights That
have Not
(2)Vested (#)
 
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Rights That
Have Not
Vested($)(1)
B. Ben Baldanza
3/4/2014
(3)

 

 

 

 
13,249

 
1,001,359

 
 
 
 
 

 

 

 

 

 

6,625

 
500,718

 
1/10/2014
(4)

 

 

 

 
63,803

 
4,822,231

 
 
 
 
4/8/2013
(5)

 

 

 

 
19,706

 
1,489,379

 
 
 
 
 

 

 

 

 

 

52,550

 
3,971,729

 
2/21/2012
(6)

 

 

 

 
21,250

 
1,606,075

 
 
 
Edward M. Christie III
3/4/2014
(7)

 

 

 

 
13,188

 
996,749

 
 
 
 
 

 

 

 

 

 

2,130

 
160,985

 
4/8/2013
(5)

 

 

 

 
7,425

 
561,182

 
 
 
 
 

 

 

 

 

 

19,800

 
1,496,484

 
4/16/2012
(8)

 

 

 

 
23,750

 
1,795,025

 
 
 
John Bendoraitis
3/4/2014
(9)

 

 

 

 
12,947

 
978,534

 
 
 
 
 

 

 

 

 

 

2,009

 
151,840

 
10/21/2013
(10)

 

 

 

 
12,148

 
918,146

 
 
 
 
 

 

 

 

 

 

32,394

 
2,448,339

Thomas C. Canfield
3/4/2014
(7)

 

 

 

 
13,188

 
996,749

 
 
 
 
 

 

 

 

 

 

2,130

 
160,985

 
4/8/2013
(5)

 

 

 

 
6,337

 
478,950

 
 
 
 
 

 

 

 

 

 

16,900

 
1,277,302

 
2/21/2012
(6)

 

 

 

 
6,250

 
472,375

 
 
 
Robert A. Schroeter
3/13/2014
(11)

 

 

 

 
2,534

 
191,520

 
 
 
 
3/4/2014
(3)

 

 

 

 
1,786

 
134,986

 
 
 
 
 

 

 

 

 

 

893

 
67,493

 
4/8/2013
(5)

 

 

 

 
2,812

 
212,531

 
 
 
 
 

 

 

 

 

 

7,500

 
566,850

 
11/30/2012
(12)

 

 

 

 
2,953

 
223,188

 
 
 
 
8/29/2012
(13)

 

 

 

 
1,700

 
128,486

 
 
 
 

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Table of Contents

(1)
The market value of shares of stock that have not vested is calculated based on the closing price of our common stock as of December 31, 2014 which was $75.58.
(2)
In accordance with the SEC rules, the number of performance share units shown represents the number of units that may be earned based on target performance. The performance share units are settled in shares of common stock, in an amount from 0% to 200% of the number of units awarded, based on the Company’s total shareholder return compared to that of ten peer airlines over the three-year period commencing on January 1, 2013 and ending on December 31, 2015 for the 2013 grants and over the three-year period commencing on January 1, 2014 and ending on December 31, 2016 for the 2014 grants. The SEC rules dictate that the maximum number of units to be shown, because the number of units that would have been earned based on actual results for 2014 (instead of through the end of the performance periods on December 31, 2015 and December 31, 2016, respectively) falls above the target level of performance. Based on actual 2014 total shareholder return results, the Company's total shareholder return ranked first among its peer group as to the 2013 grant of performance share units and ranked seventh in its peer group as to the 2014 grant of performance share units.
(3)
The time-vested restricted stock units vest 25% on each of the four anniversary dates following March 4, 2014.
(4)
The time-vested restricted stock units vest as follows: 23,926 units vest on July 10, 2015; 7,975 units vest on January 10, 2016; 15,951 units vest on January 10, 2017; and 15,951 units vest on January 10, 2018.
(5)
The remaining unvested restricted stock units (75% of the original grant amount) vest in three equal annual installments on each of the second, third and fourth anniversaries of April 8, 2013.
(6)
The remaining unvested restricted stock units (50% of the original grant amount) vest in two equal annual installments on each of the third and fourth anniversaries of February 21, 2012.
(7) 4,259 time-vested restricted stock units vest 25% on each of the four anniversary dates following March 4, 2014. An additional 8,929 time-vested restricted stock units vest 100% on March 4, 2018.
(8) The remaining unvested restricted stock units (50% of the original grant amount) vest in two equal annual installments on each of the third and fourth anniversaries of April 16, 2012.
(9) 4,018 time-vested restricted stock units vest 25% on each of the four anniversary dates following March 4, 2014. An additional 8,929 time-vested restricted stock units vest 100% on March 4, 2018.
(10) The remaining unvested restricted stock units (75% of the original grant amount) vest in three equal annual installments on each of the second, third and fourth anniversaries of October 21, 2013.
(11) The time-vested restricted stock units vest 100% on March 13, 2018.
(12) The remaining unvested restricted stock units (50% of the original grant amount) vest in two equal annual installments on each of the third and fourth anniversaries of November 30, 2012.
(13) The remaining unvested restricted stock units (50% of the original grant amount) vest in two equal annual installments on each of the third and fourth anniversaries of August 29, 2012.
Option Exercises and Stock Vested in 2014
The following table summarizes the option exercises and stock award vesting for each of our named executive officers for the year ended December 31, 2014 .
 
Option Awards

Stock Awards
Name
Number of
Securities
Acquired on
Exercise
(#)

Value Realized on
Exercise (1)($)

Number of
Shares
Acquired
on Vesting
(#)

Value
Realized on
Vesting (2)
($)
B. Ben Baldanza




59,694


4,160,918

Edward M. Christie




61,850


4,400,172

John Bendoraitis




4,049


255,897

Thomas C. Canfield
5,000


366,550


17,738


1,234,044

Robert A. Schroeter
750


60,578


9,172


671,866

James A. Lynde




12,113


662,538

 
(1)
Represents the value as determined by the difference between the market price of the underlying securities at exercise and the exercise price.
(2)