SkyWest Airlines 2009 Annual Report Download - page 147

PROPOSAL 2
APPROVAL OF THE SKYWEST, INC. 2010 LONG-TERM INCENTIVE PLAN
Introduction
Shareholders are asked to vote to adopt the SkyWest, Inc. 2010 Long-Term Incentive Plan (the
‘‘2010 Plan’’). The 2010 Plan would replace the SkyWest, Inc. 2006 Long-Term Incentive Plan (the
‘‘2006 Plan’’) that was approved by the Company’s shareholders in May of 2006.
The Board of Directors Recommends that Shareholders
Vote FOR the Adoption of the SkyWest, Inc. 2010 Long-Term Incentive Plan
As of December 31, 2009, 1,453,234 shares remained available for grant under the 2006 Plan and
no shares remained available for further grants under the Company’s prior Executive Stock Option
Plan and 2001 Allshare Stock Option Plan (collectively with the 2006 Plan, the ‘‘Prior Plans’’).
The 2010 Plan would authorize grants of up to 5,150,000shares, (i) decreased by one share for
every share subject to an option or stock appreciation right that was granted under the Prior Plans
after December 31, 2009, (ii) decreased by 1.65 shares for every share subject to an award (other than
an option or stock appreciation right) that was granted under the Prior Plans after December 31, 2009,
(iii) increased by one share for every share subject to an option or stock appreciation right that was
granted under the Prior Plans that is forfeited or terminated, expires or is settled in cash after
December 31, 2009, and (iv) increased by 1.65 shares for every share subject to an award (other than
an option or stock appreciation right) granted under the Prior Plans that is forfeited or terminated,
expires or is settled in cash after December 31, 2009.
If shareholders approve the 2010 Plan, the Company will issue no additional options or other
awards under the 2006 Plan after the date of shareholder approval of the 2010 Plan; however, all then
outstanding options, restricted stock and restricted stock units under the Prior Plans would remain
outstanding.
The purpose of the 2010 Plan is to provide a compensation program that:
• Rewards superior individual and company performance;
• Attracts and retains management talent capable of achieving superior business results; and
• Aligns the interests of Company managers with those of shareholders by linking a portion of
their compensation directly to increases in shareholder value.
The Company has long had an ownership culture in which its officers, managers and other key
employees are granted stock options and other equity-based awards to align their interests with those
of non-employee shareholders. The Board believes the ownership culture at the Company motivates the
achievement of superior performance, and also plays an essential role in retaining top talent.
The 2010 Plan would permit the Company to continue to use equity-based awards as an integral
part of its compensation program.
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