SkyWest Airlines 2009 Annual Report Download - page 90

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SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2009
(10) Retirement Plans and Employee Stock Purchase Plans (Continued)
In February 1996, the Company’s Board of Directors approved the SkyWest, Inc. 1995 Employee
Stock Purchase Plan (the ‘‘1995 Stock Purchase Plan’’). The 1995 Stock Purchase Plan enabled
employees to purchase shares of the Company’s common stock at a 15% discount, through payroll
deductions. There are no additional shares of common stock available for issuance under this plan.
The following table summarizes purchases made under the 2009 and 1995 Employee Stock
Purchase Plans:
Year Ended December 31,
2009 2008 2007
Number of share purchased .................... 835,469 807,797 454,162
Average price of shares purchased ............... $ 10.26 $ 13.90 $ 20.65
The 2009 Stock Purchase Plan is a non-compensatory plan under the accounting guidance.
Therefore, no compensation expense was recorded for the year ended December 31, 2009. The 1995
Stock Purchase Plan was a compensatory plan under the accounting guidance because the shares were
purchased semi-annually at a 15% discount based on the lower of the beginning or the end of the
period price. During the years ended December 31, 2008 and 2007, the Company recorded
compensation expense of $3.0 million and $2.8 million related to 1995 Stock Purchase Plan,
respectively. The fair value of the shares purchased under the Stock Purchase Plan was determined
using the Black-Scholes option pricing model with the following assumptions:
2008 2007
Expected annual dividend rate ............................. 0.80% 0.47%
Risk-free interest rate ................................... 2.51% 5.07%
Average expected life (months) ............................ 6 6
Expected volatility of common stock ......................... 0.264 0.272
(11) Stock Repurchase
The Company’s Board of Directors authorized the repurchase of up to 15,000,000 shares of the
Company’s common stock in the public market. During the years ended December 31, 2009 and 2008,
the Company repurchased 1.9 and 5.4 million shares of common stock for approximately $18.4 million
and $102.6 million at a weighted average price per share of $9.88 and $19.16, respectively.
(12) Related-Party Transactions
The Company’s President, Chairman of the Board and Chief Executive Officer, serves on the
Board of Directors of Zions Bancorporation (‘‘Zions’’). The Company maintains a line of credit (see
Note 2) and certain bank accounts with Zions. Zions is an equity participant in leveraged leases on
three CRJ200, two CRJ700 and five Brasilia turboprop aircraft operated by the Company. Zions also
serves as the Company’s transfer agent. The Company’s cash balance in the accounts held at Zions as
of December 31, 2009 and 2008 was $22.1 million and $11.7 million, respectively.
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