SkyWest Airlines 2009 Annual Report Download - page 89

SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2009
(9) Capital Transactions (Continued)
Taxes
A portion of the Company’s granted options qualify as incentive stock options (ISO) for income
tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the
options is recorded for book purposes due to the fact that an ISO does not ordinarily result in a tax
benefit unless there is a disqualifying disposition. Stock option grants of non-qualified options result in
the creation of a deferred tax asset, which is a temporary difference, until the time that the option is
exercised. Due to the treatment of incentive stock options for tax purposes, the Company’s effective tax
rate from year to year is subject to variability.
(10) Retirement Plans and Employee Stock Purchase Plans
SkyWest Retirement Plan
The Company sponsors the SkyWest, Inc. Employees’ Retirement Plan (the ‘‘SkyWest Plan’’).
Employees who have completed 90 days of service and are at least 18 years of age are eligible for
participation in the SkyWest Plan. Employees may elect to make contributions to the SkyWest Plan.
The Company matches 100% of such contributions up to 2%, 4% or 6% of the individual participant’s
compensation, based upon length of service. Additionally, a discretionary contribution may be made by
the Company. The Company’s combined contributions to the SkyWest Plan were $11.8 million,
$9.3 million and $9.0 million for the years ended December 31, 2009, 2008 and 2007, respectively.
ASA Retirement Plan
ASA sponsors the Atlantic Southeast Airlines, Inc. Investment Savings Plan (the ‘‘ASA Plan’’).
Employees who have completed 90 days of service and are 18 years of age are eligible for participation
in the ASA Plan. Employees may elect to make contributions to the ASA Plan however, ASA limits the
amount of company match at 6% of each participant’s total compensation, except for those with 10 or
more years of service whose company match is limited to 8% of total compensation. Additionally, ASA
matches the individual participant’s contributions from 20% to 75%, depending on the length of the
participant’s service. ASA’s contribution to the ASA Plan was $4.7 million, $4.6 million and $4.0 million
for the years ended December 31, 2009, 2008 and 2007, respectively. Additionally, participants are
100% vested in their elective deferrals and rollover amounts and from 10% to 100% vested in company
matching contributions based on length of service.
Employee Stock Purchase Plans
In May 2009, the Company’s Board of Directors approved the SkyWest, Inc. 2009 Employee Stock
Purchase Plan (the ‘‘2009 Stock Purchase Plan’’). All employees who have completed 90 days of
employment with the Company or one of its subsidiaries are eligible to participate, except employees
who own five percent or more of the Company’s common stock. The 2009 Stock Purchase Plan enables
employees to purchase shares of the Company’s common stock at a 5% discount, through payroll
deductions. Employees can contribute up to 15% of their base pay, not to exceed $21,250 each
calendar year, for the purchase of shares. Shares are purchased semi-annually at a 5% discount based
on the end of the period price. Employees can terminate their participation in the 2009 Stock Purchase
Plan at anytime upon written notice.
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