SkyWest Airlines 2009 Annual Report Download - page 150

(ii) determine the time or times when stock option grants or other awards will be granted and will vest;
and (iii) establish the terms and conditions upon which awards may be exercised.
Duration. The 2010 Plan will be effective on the date it is approved by the shareholders of the
Company and continue until the tenth anniversary of such approval date. If shareholder approval is not
obtained, the 2010 Plan will be null and void.
Shares Subject to Plan. Upon shareholder approval, 5,150,000 shares of Common Stock will be
available for issuance under the 2010 Plan, (i) decreased by one share for each share subject to an
option or stock appreciation right 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) 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. Any shares subject to options or stock appreciation rights will be counted against
the shares available for issuance as one (1) share for every share subject thereto. Any shares subject to
awards other than options or stock appreciation rights will be counted against the shares available for
issuance as 1.65 shares for every one (1) share subject thereto. If an award under the 2010 Plan or
Prior Plans terminates or is forfeited, expires or is settled in cash, the subject shares shall again be
available for grant under the 2010 Plan (such shares, ‘‘Recycled Shares’’). To the extent that a share
that was subject to an option or stock appreciation right under the 2010 Plan becomes a Recycled
Share, the 2010 Plan will be credited with one (1) share. To the extent that a share that was subject to
an award (other than an option or stock appreciation right) under the 2010 Plan becomes a Recycled
Share, the 2010 Plan will be credited with 1.65 shares. However, the following types of shares
underlying an award may not become again available for grant under the 2010 Plan: (i) shares tendered
by the participant or withheld by the Company in payment of the purchase price of an option or in
satisfaction of any tax withholding obligation; (ii) shares repurchased by the Company with option
proceeds; or (iii) shares subject to a stock appreciation right that are not issued in connection with the
stock settlement of the stock appreciation right on exercise thereof.
Additionally, awards and shares under a shareholder approved plan of an acquired company do
not count against the 2010 Plan share maximum.
In the event the outstanding shares of Common Stock are increased, decreased, changed into, or
exchanged for a different number or kind of shares or securities through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split or similar transaction (a
‘‘Recapitalization’’), the maximum number of shares available for issuance under the 2010 Plan will be
proportionately adjusted.
Awards Under the 2010 Plan. The 2010 Plan provides for the following types of awards
(‘‘Awards’’): (i) incentive stock options; (ii) non-qualified stock options; (iii) stock appreciation rights;
(iv) restricted stock; (v) restricted stock units; (vi) other share-based awards, including grants of
unrestricted stock; and (vii) performance awards, including annual and long-term cash performance
awards.
Stock Options. The Compensation Committee may from time to time award options to any
participant subject to the limitations described above. Stock options give the holder the right to
purchase shares of the Common Stock within a specified time at a specified price. Two types of stock
options may be granted under the 2010 Plan: incentive stock options, or ‘‘ISOs,’’ which are subject to
special tax treatment as described below, and non-qualified options, or ‘‘NSOs.’’ Eligibility for ISOs is
limited to employees of the Company and its subsidiaries. The exercise price of an option cannot be
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