SkyWest Airlines 2014 Annual Report Download - page 99

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SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2014
(9) Capital Transactions (Continued)
assumptions used and weighted average fair value for grants in the years ended December 31, 2014,
2013 and 2012.
2014 2013 2012
Expected annual dividend rate ................... 1.32% 1.21% 1.23%
Risk-free interest rate ......................... 1.50% 0.92% 0.81%
Average expected life (years) .................... 5.8 6.0 5.6
Expected volatility of common stock .............. 0.431 0.446 0.409
Forfeiture rate .............................. 0.0% 0.0% 0.0%
Weighted average fair value of option grants ........ $ 4.47 $ 5.04 $ 4.43
The Company recorded share-based compensation expense only for those options that are
expected to vest. The estimated fair value of the stock options is amortized over the vesting period of
the respective stock option grants.
During the year ended December 31, 2014, the Company granted 312,749 shares of restricted stock
units to the Company’s employees under the 2010 Incentive Plan. The restricted stock units granted
during the year ended December 31, 2014 have a three-year vesting period, during which the recipient
must remain employed with the Company or its subsidiaries. The weighted average fair value of the
restricted stock units on the date of grants made during the year ended December 31, 2014 was $12.01
per share. Additionally, during the year ended December 31, 2014 the Company granted 44,631 fully-
vested shares of common stock to the Company’s directors with a weighted average grant-date fair
value of $12.10. The following table summarizes the activity of restricted stock units granted to
employees and fully-vested common shares granted to the Company’s directors as of December 31,
2014, 2013 and 2012:
Weighted-Average
Number of Grant-Date Fair
Shares Value
Non-vested shares outstanding at December 31, 2011 . . . 611,602 $15.08
Granted .................................... 318,139 13.04
Vested ..................................... (212,841) 14.95
Cancelled ................................... (18,015) 14.20
Non-vested shares outstanding at December 31, 2012 . . . 698,885 14.21
Granted .................................... 312,104 13.41
Vested ..................................... (231,465) 14.35
Cancelled ................................... (45,933) 13.69
Non-vested shares outstanding at December 31, 2013 . . . 733,591 13.79
Granted .................................... 357,380 12.01
Vested ..................................... (329,522) 14.38
Cancelled ................................... (38,273) 12.83
Non-vested shares outstanding at December 31, 2014 . . . 723,176 12.70
During the year ended December 31, 2014, 2013 and 2012, the Company recorded equity-based
compensation expense of $5.3 million, $4.4 million and $4.7 million, respectively.
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