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Exhibit 4.3
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SKYWEST, INC.
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SKYWEST'S ALLSHARE
INCENTIVE STOCK OPTION PLAN
SECTION 1. PURPOSE.
This SkyWest AllShare Incentive Stock Option Plan (hereinafter referred
to as the "Plan") is intended as a means whereby employees (hereinafter referred
to as "Employee" or "Employees" and "Optionee" or "Optionees") of SkyWest, Inc.
(hereinafter referred to as the "Company") or its subsidiaries (hereinafter
referred to as the "Subsidiaries") can each enlarge his or her proprietary
interest in the Company, thereby encouraging the judgment, initiative and
efforts of the Employees for the successful conduct of the Company's business.
The Plan is also intended to create common interests between the Employees and
the other shareholders of the Company, and to assist the Company in attracting,
retaining and motivating Employees.
SECTION 2. ADMINISTRATION OF THE PLAN.
The Board of Directors of the Company shall appoint a Stock Option
Committee (hereinafter referred to as the "Committee") of not less than three
(3) directors to administer the Plan. The members of the Committee shall serve
at the pleasure of the Board, which shall have the power at any time, or from
time to time, to remove members from the Committee or to add members thereto.
The Committee shall construe and interpret the Plan, establish such operating
guidelines and rules as it deems necessary for the proper administration of the
plan and make such determinations and take such other action in connection with
the Plan as it deems necessary and advisable. It shall determine the individuals
to whom and the time or times at which Options shall be granted, the number of
shares to be subject to each Option, the Option price and the duration of leaves
of absence which may be granted to participants without constituting a
termination of their employment for purposes of the Plan. Any such construction,
interpretation, rule, determination or other action taken by the Committee
pursuant to the Plan shall be final, binding and conclusive on all interested
parties, including the Company, its subsidiaries and all former, present and
future Employees of the Company or its Subsidiaries.
Actions by a majority of the Committee at a meeting at which a quorum is
present, or actions approved in writing by all of the members of the Committee,
shall be the valid acts of the Committee. No member of the Board of Directors or
the Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option granted under it.
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SECTION 3. MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN.
Subject to any adjustment as provided in the Plan, the shares to be
offered under the Plan may be, in whole or in part, authorized but unissued
Common Shares of the Company, or issued Common Shares which shall have been
reacquired by the Company and held by it as treasury shares. The aggregate
number of Common Shares to be delivered upon exercise of all Options granted
under the Plan shall not exceed 500,000 plus the amount of any additional Common
Shares which may result from any share distributions effected after the approval
of this Plan by the Board of Directors of the Company. If any Option granted
hereunder shall expire or terminate for any reason without having been exercised
in full, the unpurchased shares with respect thereto shall again be available
for other Options to be granted under the Plan unless the Plan shall have been
terminated.
SECTION 4. SELECTION OF OPTIONEES.
All those Employees of the Company or its Subsidiaries as shall be
determined from time to time by the Committee shall be eligible to participate
in the Plan, provided, however, that directors who are not Employees of the
Company and Employees of the Company who are subject to Section 16 of the
Securities Exchange Act of 1934 with respect to the Company's securities, will
not be eligible to receive Options under the Plan and, provided further, that no
Employee may be granted Options in the aggregate which would result in that
Employee receiving more than ten percent (10%) of the maximum number of shares
available for issuance under the Plan. Except as provided herein, any person who
has been granted an Option under a prior stock option plan of the Company may be
granted an additional Option or Options under the Plan if the Committee shall so
determine.
SECTION 5. OPTION PRICE.
The purchase price for the shares covered by each Option granted shall
be the fair market value of the shares on the date of the grant of the Option.
Such fair market value shall be equal to the closing sale price for Common
Shares of the Company as reported on The NASDAQ Stock Market, National Market
System, on such date.
SECTION 6. OPTION REQUIREMENTS.
The Options granted pursuant to the Plan shall be authorized by the
Committee and shall be evidenced in writing in a form approved by the Committee
and shall include the following terms and conditions:
(a) Optionee. Each Option shall state the name of the Optionee.
(b) Number of Shares. Each Option shall state the number of shares
to which that Option pertains.
(c) Purchase Price. Each Option shall state the Option price,
which shall be not less than one hundred percent (100%) of the fair market value
of the shares covered by such Option on the date of grant of such Option. See
Section 5, Option Price, and Section 27, date of grant.
(d) Payment. The purchase price for the Options being exercised
must be paid in full at the time of exercise in a manner acceptable to the
Committee. In addition, in order to enable the Company to meet any applicable
federal (including FICA), state and local withholding tax requirements,
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an Optionee shall also be required to pay the amount of tax to be withheld at
the time of exercise. No Common shares will be delivered to any Optionee until
all such amounts have been paid.
(e) Length of Option. Each Option shall be granted for a period to
be determined by the Committee but in no event to exceed more than ten (10)
years. However, subject to Sections 9 and 10, each Option shall be exercisable
only during such portion of its term as the Committee shall determine, and only
if the Optionee is employed by the Company or a Subsidiary of the Company within
three months of the time of such exercise.
SECTION 7. METHOD OF EXERCISE OF OPTIONS.
Each Option shall be exercised pursuant to the terms of such Option and
pursuant to the terms of the plan by giving written notice to the Company at its
principal place of business or other address designated by the Company,
accompanied by a cash, check, shares or other property acceptable to the
Committee, in payment of the Option price for the number of shares specified and
paid for. From time to time the Committee may establish procedures relating to
effecting such exercises. No fractional shares shall be issued as a result of
exercising an Option. The Company shall make delivery of such shares as soon as
possible; provided, however, that if any law or regulation requires the Company
to take action with respect to the shares specified in such notice before
issuance thereof, the date of delivery of such shares shall then be extended for
the period necessary to take such action.
SECTION 8. NON-TRANSFERABILITY OF OPTIONS.
Except as set forth in Section 10, an Option is exercisable during an
Optionee's lifetime only by the Optionee. The Options shall not be transferable
except by will or the laws of descent and distribution, and shall terminate as
provided in this Plan.
SECTION 9. EARLIER TERMINATION OF OPTIONS.
Upon the termination of the Optionee's employment for any reason
whatsoever, including retirement, the Options will terminate as to all shares
covered by Options which have not become exercisable as of the date of such
termination and shall terminate as to all shares covered by Options which have
not been exercised within three (3) months of the date of such termination.
Notwithstanding the preceding sentence, however, Options shall be exercisable
following the death or disability of the Optionee as set forth in Section 10.
SECTION 10. EXERCISE UPON DEATH OR DISABILITY.
In the event an Optionee dies while employed by the Company or a
Subsidiary, the estate of the deceased Optionee shall have the right to exercise
any rights the Optionee would otherwise have under this Plan for a period of six
(6) months after the date of the Optionee's death, with exercise to be made as
set forth in Section 7.
In the event an Optionee becomes Disabled while employed by the Company
or a Subsidiary, the Optionee (or, in the event the Optionee is incapacitated
and unable to exercise Options, the Optionee's legal guardian or legal
representative whom the Committee deems appropriate based on applicable facts
and circumstances) shall have the right to exercise any rights the Optionee
would otherwise have under this Plan for a period of six (6) months after the
date the Optionee becomes Disabled, with exercise to be made as set forth in
Section 7.
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SECTION 11. INCENTIVE OR NON-QUALIFIED OPTIONS.
The Options granted under the Plan shall be designated by the Committee
as incentive options as that term is defined in Section 422 of the Internal
Revenue Code ("Incentive Options") or as non-qualified options, as the
Committee, in its sole discretion, may determine.
SECTION 12. INCENTIVE OPTIONS HOLDING PERIOD; DISQUALIFYING DISPOSITION.
With respect to the Common Shares acquired upon exercise of Options
designated as Incentive Options by the Committee, no sale of such shares can be
made within two years from the date said Option was granted or within one year
from the date said Option was exercised, whichever is greater. Any gain upon
sale of shares acquired upon exercise of Incentive Options and sold before the
expiration of the required period, a "Disqualifying Disposition," will be
treated as ordinary income to the Optionee.
SECTION 13. EFFECT OF CHANGE IN COMMON SHARES SUBJECT TO THE PLAN.
In the event any dividend upon the Common Shares payable in shares is
declared by the Company, or in case of any subdivision or combination of the
outstanding Common Shares, the aggregate number of Common Shares to be delivered
upon exercise of all Options granted under the Plan shall be increased or
decreased proportionately so that there will be no change in the aggregate
purchase price payable upon the exercise of the Option, and the maximum number
of Common Shares issuable under the Plan shall also be increased or decreased
proportionately. In the event of any other recapitalization or any
reorganization, merger, consolidation or any change in the corporate structure
or capital stock of the Company, the Committee shall make such adjustment, if
any, as it may deem appropriate to reflect accurately the terms of the Option as
to the number and kind of shares deliverable upon subsequent exercising of the
Option and in the Option prices under the Option.
SECTION 14. LISTING AND REGISTRATION OF COMMON SHARES; COMPLIANCE WITH
APPLICABLE LAWS.
If at any time the Committee shall determine that listing, registration
or qualification of the Common Shares covered by the Option upon any securities
exchange or quotation system or under any state or federal law, or the consent
or the approval of any governmental regulatory body is necessary or desirable as
a condition of or in connection with the purchase of Common Shares under the
Option, or, in the discretion of the Committee, the Option cannot be exercised
in accordance with applicable law, the Option may not be exercised in whole or
in part unless and until such listing, registration, qualification, consent,
approval or compliance shall have been effected or obtained free of any
conditions not acceptable to the Committee. Any person exercising an Option
shall make such representations and agreements and furnish such information as
the Committee may request to assure compliance with the foregoing or any other
applicable legal requirements.
SECTION 15. NO OBLIGATION TO EXERCISE OPTION.
The granting of a Option shall impose no obligation upon the Optionee to
exercise such option.
SECTION 16. MISCONDUCT.
In the event that an Optionee has (i) used for profit or disclosed to
unauthorized persons, confidential information or trade secrets of the Company
or its Subsidiaries, or (ii) breached any contract with or violated any
fiduciary obligation to the Company or its Subsidiaries including, without
limitation, any act by Optionee of dishonesty or fraud which act is materially
damaging or detrimental to the
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business or operations of the Company, or (iii) engaged in unlawful trading in
the securities of the Company or its Subsidiaries or of another company based on
information gained as a result of that Optionee's employment with the Company or
its Subsidiaries, then that Optionee shall forfeit all rights to any unexercised
Options granted under the Plan and all of that Optionee's outstanding Options
shall automatically terminate and lapse, unless the Committee shall determine
otherwise.
SECTION 17. BUY OUT OF OPTION GAINS.
At any time after any Option becomes exercisable, the Committee shall
have the right to elect, in its sole discretion and without the consent of the
holder thereof, to cancel such Option and pay to the Optionee the excess of the
fair market value of the Common Shares covered by such Option over the Option
price of such Option at the date the Committee provides written notice (the "Buy
Out Notice") of the intention to exercise such right. Buy outs pursuant to this
provision shall be effected by the Company as promptly as possible after the
date of the Buy Out Notice. Payments of buy out amounts may be made in cash, in
Common Shares or partly in cash, and partly in Common Shares, as the Committee
deems advisable. To the extent payment is made in Common Shares, the number of
shares shall be determined by dividing the amount of the payment to be made by
the fair market value of a Common Share at the date of the Buy Out Notice. In no
event shall the Company be required to deliver a fractional Common Share in
satisfaction of this buy out provision. Payments of any such buy out amounts
shall be made net of any applicable federal (including FICA), state and local
withholding taxes. For the purposes of this Section 18, fair market value shall
be equal to the closing sales price for Common Shares of the Company as reported
on The NASDAQ Stock Market, National Market System, on the relevant date.
SECTION 18. NO RIGHTS TO OPTIONS OR EMPLOYMENT.
No Employee or other person shall have any claim or right to be granted
an Option under the Plan. Having received an Option under the Plan shall not
give an Employee any right to receive any other grant under the Plan. An
Optionee shall have no rights to or interest in any Option except as set forth
herein. Neither the Plan nor any action taken herein alters the status of
Employee's employment as an at-will employee of the Company or shall be
construed as giving any Employee any right to be retained in the employ of the
Company or its Subsidiaries.
SECTION 19. MERGER, CONSOLIDATION, ETC..
In the event that the Company is a party to a plan or agreement for
merger or consolidation or reclassification of its securities or the exchange of
its securities for the securities of another person which has acquired the
Company's assets or which is in control (as defined in Section 368(c) of the
Internal Revenue Code of 1986, as amended) of a person which has acquired the
Company's assets, where the terms of such plan or agreement are binding upon all
shareholders of the Company, except to the extent that dissenting shareholders
may be entitled to relief under Part 13 of the Utah Revised Business Corporation
Act, then Options granted and outstanding pursuant to the Plan, notwithstanding
the date of exercise fixed in the grant of such Options, shall become
immediately exercisable and each Optionee shall be entitled to receive, upon
payment of the amount required for exercise of each Option, securities or cash
consideration, or both, equal to those the Optionee would have been entitled to
receive under such plan or agreement if the Optionee had already exercised such
Option. Each outstanding Option shall also be subject to the agreement governing
any merger or consolidation, reclassification or exchange of securities which
agreement may provide, without limitation, for the conversion of outstanding
Options into options to acquire securities of the surviving corporation.
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SECTION 20. AMENDMENT OR TERMINATION.
The Board of Directors may amend or terminate the Plan at any time,
provided that the Board of Directors shall not (except as provided in Sections
9, 10 and 13 hereof) make any change in the Options which will impair the rights
of the Optionee therein, without the consent of the Optionee. No option shall be
granted hereunder after November 7, 2004.
SECTION 21. OTHER ACTIONS.
This Plan shall not restrict the authority of the Committee, the Board
of Directors or of the Company or its Subsidiaries for proper corporate purposes
to grant or assume stock options, other than under the Plan, to or with respect
to any Employee or other person.
SECTION 22. COSTS AND EXPENSES.
Except as provided in Section 6(d) hereof with respect to taxes, the
costs and expenses of administering the Plan shall be borne by the Company, and
shall not be charged to any grant nor to any Employee receiving a grant.
SECTION 23. PLAN UNFUNDED.
The Plan shall be unfunded. Except for reserving a sufficient number of
authorized shares to the extent required by law to meet the requirements of the
Plan, the Company shall not be required to establish any special or separate
fund or to make any other segregation of assets to assure payment of any grant
under the Plan.
SECTION 24. LAWS GOVERNING PLAN.
This Plan shall be construed under and governed by the laws of the State
of Utah.
SECTION 25. CAPTIONS.
The captions to the several sections hereof are not a part of this Plan,
but are merely guides or labels to assist in locating and reading the several
sections hereof.
SECTION 26. EFFECTIVE DATE.
The Plan shall become effective on the date it is approved by the Board
of Directors of the Company, subject however, to approval by the shareholders of
the Company within twelve (12) months of such date. Any Options granted prior to
shareholder approval shall be expressly conditioned upon receiving such
approval.
SECTION 27. DEFINITIONS.
Unless the context clearly indicates otherwise, the following terms,
when used in this Plan, shall have the meaning set forth below:
(a) The "date of grant" or "grant date" of an Option shall be the
date on which an Option is granted under the Plan.
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(b) "Option" means the right granted under the Plan to an Optionee
to purchase a Common Share of the Company at a fixed price for a specified
period of time.
(c) "Option price" means the price at which a Common Share covered
by an Option granted hereunder may be purchased.
(d) With regard to any particular Employee, "Disabled" shall have
the meaning set forth in the Company's long term disability program applicable
to such Employee.
ADOPTED as of the 8th day of November, 1994.
BY THE BOARD OF DIRECTORS:
/s/ Eric Christensen
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Secretary
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