SkyWest Airlines 2002 Annual Report Download - page 49

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Stock Options
In August 2000, the Company’s shareholders approved the adoption of two new stock option plans:
the Executive Stock Incentive Plan (‘‘Executive Plan’’) and the 2001 Allshare Stock Option Plan
(‘‘Allshare Plan’’). Both plans became effective January 1, 2001. These plans replaced the Company’s
Combined Incentive and Non-Statutory Stock Option Plans (‘‘Prior Plans’’), however, all outstanding
options under Prior Plans remain outstanding. No further grants will be made under the Prior Plans.
As of December 31, 2002, there were approximately 1,575,000 options outstanding under the Prior
Plans. The Executive Plan provides for the issuance of options to purchase up to 4,000,000 shares of
common stock to officers, directors and other management employees of which 1,119,879 options had
been issued as of December 31, 2002. The Allshare Plan provides for the issuance of options to
purchase up to 4,000,000 shares of common stock to employees of which 1,000,000 options had been
issued as of December 31, 2002. The Executive Plan and Allshare Plan are both administered by the
Compensation Committee of the Company’s Board of Directors (the ‘‘Compensation Committee’’),
who designate option grants as either incentive or non-statutory. Incentive stock options are granted at
not less than 100% of the market value of the underlying common stock on the date of grant.
Non-statutory stock options are granted at a price as determined by the Compensation Committee.
Options are exercisable for a period as defined by the Compensation Committee at the date
granted; however, no stock option will be exercisable before six months have elapsed from the date it is
granted and no incentive stock option shall be exercisable after ten years from the date of grant. The
following table summarizes the stock option activity for all plans for the years ended December 31,
2002, 2001 and 2000:
2002 2001 2000
Weighted Weighted Weighted
Number of Average Number of Average Number of Average
Options Price Options Price Options Price
Outstanding at beginning of year .......... 3,028,534 $18.66 2,864,434 $12.39 2,908,628 $ 8.61
Granted ............................ 1,073,968 26.24 1,045,911 25.95 696,000 20.13
Exercised ........................... (389,260) 11.15 (874,550) 7.72 (671,960) 3.73
Canceled ........................... (33,317) 22.54 (7,261) 11.97 (68,234) 11.47
Outstanding at end of year .............. 3,679,925 $21.70 3,028,534 $18.66 2,864,434 $12.39
Weighted average fair value of options
granted during the year ............... $12.46 $12.51 $ 9.24
The following table summarizes information about stock options outstanding at December 31,
2002:
Options Outstanding Options Exercisable
Weighted Average
Range of Number Remaining Weighted Average Number Weighted Average
Exercise Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price
$3 to $15 878,901 5.9 years $12.42 878,901 $12.42
$16 to $21 696,000 7.4 years 20.13 — —
$22 to $26 2,105,024 8.9 years 26.10 — —
$3 to $26 3,679,925 7.9 years $21.70 878,901 $12.42
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