SkyWest Airlines 2009 Annual Report Download - page 152

and/or cash awards made outside the 2010 Plan. Each other share-based award will be evidenced by an
award agreement that will specify terms and conditions as the Compensation Committee may
determine.
Performance Awards. The Compensation Committee may also make awards of performance
shares, performance units, or performance-based cash bonuses, subject to the satisfaction of specified
performance criteria. Performance awards may be paid in shares of Common Stock, cash, other
property, or any combination thereof, as determined by the Compensation Committee.
Dividends; Dividend Equivalents. Awards other than options and stock appreciation right may, if
determined by the Compensation Committee, provide that the participant will be entitled to receive,
currently or on a deferred basis, cash, stock or other property dividends, or cash payments in amounts
equivalent to cash, stock, or other property dividends declared with respect to shares of Common Stock
covered by an award. The Compensation Committee may provide that such amounts will be deemed to
have been reinvested in additional shares of Common Stock or otherwise, and that they are subject to
the same vesting or performance conditions as the underlying awards. Any dividends or dividend
equivalents provided with respect to performance awards or restricted stock, restricted stock unit or
other share-based awards that are subject to the attainment of specified performance goals will be
subject to the same restrictions and risk of forfeiture as the underlying awards.
Section 162(m) Provisions. Under Section 162(m) of the Code, the annual compensation paid to a
publicly-traded corporation’s named executive officers (other than the principal or chief financial
officer) may not be deductible to the extent it exceeds $1 million for any such named executive officer.
However, we are able to preserve the deductibility of compensation provided in excess of $1 million to
the extent the compensation is ‘‘qualified performance-based compensation’’ within the meaning of, and
meeting the conditions set forth in, Section 162(m) of the Code and the regulations thereunder. With
respect to compensation provided under the 2010 Plan, those conditions include shareholder approval
of the 2010 Plan, setting limits on the number of awards that any individual may receive, and for
awards other than options and stock appreciation rights, establishing performance criteria that must be
met before the award actually will vest or be paid.
Performance Criteria. The 2010 Plan lists various performance criteria that the Compensation
Committee may elect to apply to awards other than options and stock appreciation rights in order to
qualify such awards as ‘‘qualified performance-based compensation’’ that is exempt from the deduction
limit of Section 162(m) of the Code. As to any award, the Compensation Committee may elect to apply
any one or any combination of the following measures at the Company level or, if the Compensation
Committee so determines, at a subsidiary, branch or divisional level:
Net sales; revenue; revenue growth or product revenue growth; operating income (before or after
taxes); pre- or after-tax income or loss (before or after allocation of corporate overhead and bonus);
earnings or loss per share; net income or loss (before or after taxes); return on equity; total
shareholder return; return on assets or net assets; appreciation in and/or maintenance of the price of
the Shares or any other publicly-traded securities of the Company; market share; gross profits; earnings
or losses (including earnings or losses before taxes, before interest and taxes, or before interest, taxes,
depreciation and amortization); economic value-added models or equivalent metrics; comparisons with
various stock market indices; reductions in costs; cash flow or cash flow per share (before or after
dividends); return on capital (including return on total capital or return on invested capital); cash flow
return on investment; improvement in or attainment of expense levels or working capital levels,
including cash and accounts receivable; operating margin; gross margin; year-end cash; cash margin;
debt reduction; shareholder equity; operating efficiencies; market share; customer satisfaction; customer
growth; employee satisfaction; regulatory achievements (including submitting or filing applications or
other documents with regulatory authorities or receiving approval of any such applications or other
documents and passing pre-approval inspections (whether of the Company or the Company’s
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