SkyWest Airlines 2013 Annual Report Download - page 177

Other Share-Based Awards. The Compensation Committee has the authority to create awards
under the 2010 Plan, including awards of unrestricted stock, in addition to those specifically described
in the 2010 Plan. These awards must be valued in whole or in part by reference to, or must otherwise
be based on, the shares of Common Stock (or the cash equivalent of such shares). These awards may
be granted either alone, in addition to, or in tandem with, other awards granted under the 2010 Plan
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 award. 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 deducted to the extent it exceeds $1 million for any such named executive officer.
However, an exception to that non-deduction rule applies to 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 (and periodic re-approval of the material terms of those criteria) that must be met before the
award actually will vest or be paid.
Performance Criteria. The 2010 Plan lists various categories of 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 are 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
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