SkyWest Airlines 2013 Annual Report Download - page 176

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
less than the fair market value of a share of Common Stock at the time of grant. The expiration dates
of options cannot be more than seven years after the date of the original grant. Other than pursuant to
a Recapitalization, the Compensation Committee may not without the approval of the Company’s
shareholders (i) lower the exercise price of an option after it is granted, (ii) cancel an option when the
exercise price exceeds the fair market value of the underlying shares in exchange for cash or another
Award, or (iii) take any other action with respect to an option that may be treated as a repricing under
the rules and regulations of The Nasdaq Global Select Market. Prior to the issuance of shares upon the
exercise of an option, no right to vote or receive dividends or any other rights as a shareholder will
exist with respect to the underlying shares.
Stock Appreciation Rights. The Compensation Committee may grant stock appreciation rights
under the 2010 Plan. A stock appreciation right entitles the holder upon exercise to receive an amount
in cash, shares of Common Stock, other property, or a combination thereof (as determined by the
Compensation Committee), computed by reference to appreciation in the value of the Common Stock.
The grant date value of a stock appreciation right against which appreciation is determined cannot be
less than the fair market value of a share of Common Stock at the time of grant except for
subsequently granted tandem stock appreciation rights and stock appreciation rights granted in
exchange for outstanding options. The expiration date of a stock appreciation right cannot be more
than seven years after the date of the original grant. Other than pursuant to a Recapitalization, the
Compensation Committee may not without the approval of the Company’s shareholders (i) lower the
grant date value of a stock appreciation right after it is granted, (ii) cancel a stock appreciation right
when the grant date value exceeds the fair market value of the underlying shares in exchange for
another Award, or (iii) take any other action with respect to a stock appreciation right that may be
treated as a repricing under the rules and regulations of The Nasdaq Global Select Market. Prior to
the issuance of shares upon the exercise of a stock appreciation right, no right to vote or receive
dividends or any other rights as a shareholder will exist with respect to the underlying shares.
Restricted Stock. The Compensation Committee may grant restricted shares of Common Stock
(‘‘restricted stock’’) to such persons, in such amounts, and subject to such terms and conditions
(including the attainment of performance criteria) as the Compensation Committee shall determine in
its discretion. Awards of restricted stock may be made in exchange for services or other lawful
consideration. Generally, awards of restricted stock are subject to the requirement that the shares be
forfeited to the Company unless specified conditions are met relating to continued service or
attainment of performance goals. Subject to these restrictions, conditions and forfeiture provisions, any
recipient of an award of restricted stock will have all the rights of a shareholder of the Company,
including the right to vote the shares.
Restricted Stock Units. The Compensation Committee may grant units having a value equal to a
specified number of shares of Common Stock to such persons, in such amounts, and subject to such
terms and conditions (including the attainment of performance criteria) as the Compensation
Committee shall determine in its discretion. If the vesting requirements specified by the Compensation
Committee are met, the grantee of such units will receive shares of Common Stock, cash, other
property, or any combination thereof, as determined by the Compensation Committee, equal to the fair
market value of the corresponding number of shares of Common Stock. A holder of restricted stock
units has no voting rights or rights to receive dividends or dividend equivalent amounts with respect to
such restricted stock units.
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