SkyWest Airlines 2013 Annual Report Download - page 94

SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2013
(7) Investment in Other Companies (Continued)
and no control over Trip Investimentos, and therefore the Company does not consolidate the financial
performance of Trip Investimentos in its financial statements.
On September 29, 2010, the Company invested $7 million for a 30% ownership interest in Mekong
Aviation Joint Stock Company, an airline operating in Vietnam (‘‘Air Mekong’’). During 2011, the
Company invested an additional $3 million in Air Mekong. During the year ended December 31, 2013,
the Company sold its shares of Air Mekong. In conjunction with the sale of its shares, the Company
recognized a gain of $5.0 million, which is reflected in other income in the Consolidated Statements of
Comprehensive Income.
During the year ended December 31, 2013, the Company terminated its sub-lease with Air
Mekong and recognized $5.1 million of other income primarily due to the recognition of contingent
rent payments, net of the write-off of certain maintenance deposits. The contingent rent payments were
collected and realized related to aircraft maintenance obligations and no are longer payable to Air
Mekong as a result of the sub-lease termination.
(8) Capital Transactions
Preferred Stock
The Company is authorized to issue 5,000,000 shares of preferred stock in one or more series
without shareholder approval. No shares of preferred stock are presently outstanding. The Company’s
Board of Directors is authorized, without any further action by the shareholders of the Company, to
(i) divide the preferred stock into series; (ii) designate each such series; (iii) fix and determine dividend
rights; (iv) determine the price, terms and conditions on which shares of preferred stock may be
redeemed; (v) determine the amount payable to holders of preferred stock in the event of voluntary or
involuntary liquidation; (vi) determine any sinking fund provisions; and (vii) establish any conversion
privileges.
Stock Compensation
On May 4, 2010, the Company’s shareholders approved the adoption of the SkyWest Inc. 2010
Long-Term Incentive Plan, which provides for the issuance of up to 5,150,000 shares of common stock
to the Company’s directors, employees, consultants and advisors (the ‘‘2010 Incentive Plan’’). The 2010
Incentive Plan provides for awards in the form of options to acquire shares of common stock, stock
appreciation rights, restricted stock grants, restricted stock units and performance awards. The 2010
Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors
(the ‘‘Compensation Committee’’) who is authorized to designate option grants as either incentive or
non-statutory. Incentive stock options are granted at not less than 100% of the market value of the
underlying common stock on the date of grant. Non-statutory stock options are granted at a price as
determined by the Compensation Committee.
In prior years, the Company adopted three stock option plans: the Executive Stock Incentive Plan
(the ‘‘Executive Plan’’), the 2001 Allshare Stock Option Plan (the ‘‘Allshare Plan’’) and SkyWest Inc.
Long-Term Incentive Plan (the ‘‘2006 Incentive Plan’’). However, as of December 31, 2013, options to
purchase an aggregate of 2,613,415 shares of the Company’s common stock remained outstanding
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