SKYWEST, INC. EMPLOYEES' RETIREMENT PLAN SUMMARY PLAN DESCRIPTION

Transcription

1 SKYWEST, INC. EMPLOYEES' RETIREMENT PLAN SUMMARY PLAN DESCRIPTION Updated as of January 1, 2015 This document constitutes part of a Prospectus covering securities that have been registered under the Securities Act of 1933, as amended (The "Securities Act") INTERESTS IN THE PLAN AND SHARES OF COMMON STOCK OF SKYWEST, INC. IN WHICH THE PLAN INVESTS CONSTITUTE SECURITIES THAT HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE OR OTHER REGULATORY AUTHORITY, NOR HAS THE COMMISSION OR ANY STATE OR OTHER REGULATORY AUTHORITY PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE v3

2 SKYWEST, INC. EMPLOYEES' RETIREMENT PLAN SUMMARY PLAN DESCRIPTION (Revised through January 1, 2015) I. INTRODUCTION TO THE PLAN In recognition of the contributions made by employees to the success of the company, SkyWest, Inc. ("SkyWest") adopted the SkyWest, Inc. Employees' Retirement Plan (the "Plan") as of April 1, The Plan has been amended several times, through and including the most recent restatement of the Plan adopted in The Plan is for the exclusive benefit of eligible employees of SkyWest and its participating subsidiaries, including SkyWest Airlines, Inc., and their beneficiaries. Participating subsidiaries do not include ExpressJet Airlines, Inc. or subsidiaries of ExpressJet Airlines, Inc. The purpose of the Plan is to permit eligible employees to save for their retirement on a tax-advantaged basis through pre-tax compensation reduction contributions. The Plan is a "salary reduction profit-sharing plan." It is also called a "401(k) plan." Under this type of plan, you may choose to reduce your compensation and have the salary reduction amounts contributed to the Plan on your behalf. SkyWest also intends to make contributions to the Plan for you and other eligible employees. When you retire, you will be eligible to receive the value of the amounts which have accumulated in your accounts under the Plan. This Summary Plan Description is a brief description of the Plan and your rights, obligations, and benefits under the Plan as amended through the date set forth at the beginning of this Summary. Some of the statements made in this Summary Plan Description are dependent upon this Plan being "qualified" under the provisions of the Internal Revenue Code. SkyWest intends that the Plan be tax-"qualified." This Summary Plan Description is not meant to interpret, extend, or change the provisions of the Plan in any way. The provisions of the Plan may only be determined accurately by reading the actual Plan document. A copy of the Plan is on file at SkyWest's office and may be read by you, your beneficiaries, or your legal representatives at any reasonable time. If you have any questions regarding either the Plan or this Summary Plan Description, you should contact the SkyWest Benefits Department. In the event of any discrepancy between this Summary Plan Description and the actual provisions of the official Plan document, the Plan document will govern. II. PRELIMINARY PROSPECTUS DISCLOSURES On April 21, 2006, SkyWest filed a registration statement (the "2006 Registration Statement") on Form S-8 with the Securities and Exchange Commission (the "Commission") to register the issuance of up to 211,000 shares of SkyWest's no par value common stock (the "Common Stock") plus an indeterminate number of interests in the Plan, under the terms of the Plan. On November 24, 2014, SkyWest filed a registration statement (the Registration Statement ) on Form S-8 with the Commission to register an additional issuance of up to 800,000 shares of SkyWest s Common Stock plus an indeterminate number of interests in the Plan, under the terms of the Plan. The Registration Statement filed in 2014 effectively replaces and supersedes the 2006 Registration Statement. In connection with that Registration Statement, this document is being provided to participants in the Plan to meet the prospectus delivery requirements of the Securities Act of 1933, as amended (the "Securities Act"). SkyWest's maintenance of the Plan is not a recommendation by SkyWest that any employee should purchase shares of Common Stock or invest in the Plan. The Plan is simply a vehicle under which employees of SkyWest and SkyWest Airlines, Inc. who wish to save for their retirement may do so on a tax-advantaged basis. Employees participating in the Plan may direct that their account balances under the Plan be invested 1

3 in the Common Stock or other investments offered under the Plan. An investment in the Common Stock through the Plan is subject to all the risks of any investment in equity securities, including the risk of decreases in the value or financial results of SkyWest and hence the price of the Common Stock, general stock market declines, decreases in the price of the Common Stock unrelated to the business and activities of SkyWest, and changes in the trading market for the Common Stock affecting the liquidity of the investment. No one should participate in the Plan who cannot afford the complete loss of his or her investment. SkyWest has no obligation to repurchase the Common Stock acquired under the Plan or to assure that participants in the Plan do not suffer losses. There can be no assurance that the Common Stock acquired under the Plan can be sold at a profit or at a price that will permit the holder to realize the amount paid for the Common Stock. SkyWest will not disclose any non-public information in connection with the administration of the Plan. Participants in the Plan may elect to purchase Common Stock or not purchase Common Stock under the Plan at a time at which SkyWest is aware of certain information that may be material to the participant's decision but, since it has not yet been publicly disclosed, would be unknown to the participant. In making a decision to participate in the Plan or any specific offering, participants will be relying solely on the information about SkyWest that is publicly available and the market's reaction to that information. Conversations participants may have with other employees of SkyWest, including officers and directors of SkyWest, or information they obtain in the course of their employment, is not investment advice and should not be construed, or relied on, by participants as a recommendation to purchase or sell Common Stock. Any such information obtained by a participant may be incomplete or subject to conditions unknown to the participant. There may be other overriding factors unknown to the participant that would materially influence an investor's decision to purchase or sell Common Stock under the Plan. Consequently, participants in the Plan must not rely on any such information in making a decision to participate in the Plan or to purchase or sell Common Stock acquired pursuant to the Plan. Participants in the Plan will not have access to any special information concerning the prospects and business of SkyWest, but should rely on the information publicly available in making their investment decisions, including SkyWest's annual reports on Form 10-K, quarterly reports on Form 10-Q, interim reports on Form 8-K, annual reports to shareholders and press releases. Copies of these documents can be obtained from the Benefits Department of SkyWest or from the Chief Financial Officer of SkyWest. Participants are cautioned that federal securities laws prohibit anyone who is in possession of material, nonpublic information about SkyWest from purchasing or selling shares of Common Stock directly or indirectly through the Plan (other than regularly scheduled purchases of Common Stock under the Plan attributable to contribution and investment elections made prior to obtaining, and not in reliance upon, such material non-public information). Trading on the basis of material non-public information, or assisting others in trading based on such information, is prohibited by federal and state securities laws and can have serious adverse consequences to the individuals involved. Additionally, Plan participants who are executives of SkyWest are prohibited by SkyWest's Insider Trading Policy from purchasing and selling Common Stock under the Plan during certain trading "blackout periods" under that policy (other than regularly scheduled purchases attributable to contribution and investment elections made prior to, and not altered during, such blackout periods). For further information regarding the Insider Trading Policy and blackout periods contact the Corporate Secretary of SkyWest or the SkyWest Benefits Department. III. GENERAL INFORMATION ABOUT THE PLAN There is certain general information which you may need to know about the Plan. This information has been summarized for you in this section. A. General Plan Information The "SkyWest, Inc. Employees' Retirement Plan" is the name of the Plan. 2

4 SkyWest has assigned Plan Number 001 to the Plan. The Plan originally became effective on April 1, 1977, but has been amended several times through the revision date of this Summary Plan Description. The Plan will remain in existence for an indefinite duration until terminated by SkyWest. The Plan's records are maintained on a twelve-month period of time. This is known as the Plan Year. The Plan Year begins on January 1st and ends on December 31st. The contributions made to the Plan will be held in trust and invested by the Trustee of the Plan. The Plan is governed by a federal law known as the Employee Retirement Income Security Act of 1974 ("ERISA"). B. Employer Information The name, address, telephone number and identification number of SkyWest, which is the principal employer maintaining the Plan and Plan sponsor, are: SkyWest, Inc. 444 South River Road St. George, Utah Attention: Benefits Department/401(k) (435) EIN# SkyWest Airlines, Inc., a wholly owned subsidiary of SkyWest, also participates as a sponsoring employer with respect to the Plan. Employees of SkyWest Airlines, Inc. are covered under and participate in the Plan on the same terms as the SkyWest employees. The address and telephone number of SkyWest Airlines, Inc. are the same as the address and telephone number of SkyWest, Inc. as shown above. References in this Summary Plan Description to your "Employer" means SkyWest Airlines, Inc. if you are employed by that corporation, or SkyWest if you are employed directly by SkyWest. C. Plan Administrator Information The name, address and business telephone number of the Plan Administrator are: SkyWest, Inc. 444 South River Road St. George, Utah Attention: Benefits Department/401(k) (435) The Plan Administrator has general authority to administer the Plan, keeps the records for the Plan and is responsible for the administration of the Plan. The Plan Administrator has discretionary authority to construe the terms of the Plan and make all determinations on all issues arising under the Plan, including, for example, questions which may affect your eligibility for benefits and the amount and timing of payment of your benefits under the Plan. The Plan Administrator will also answer any questions you may have about the Plan. The Plan Administrator is also responsible for selecting the various investment options offered under the Plan for participants who elect to direct the investment of their accounts. With respect to the selection of Plan investment options, the Plan Administrator acts through a committee consisting of the Trustees of Plan. 3

5 The Plan Administrator may delegate certain administrative functions to third-party record-keepers and administrators. D. Plan Trustee Information The name of the Plan's Trustee is: Wells Fargo Bank, N.A. The principal place of business and telephone number of the Trustees is: nd Ave. So. Minneapolis, MN (800) The Trustee has been designated to hold Plan assets for the benefit of you and other Plan participants and to invest those assets in accordance with the instructions of the Plan Administrator and self-directing Plan participants. The trust fund established by the Plan's Trustee is the funding medium used for the accumulation of assets from which benefits will be distributed. E. Service of Legal Process The name and address of the Plan's agent for service of legal process are: SkyWest, Inc. 444 South River Road St. George, Utah Attention: Bryce Higgins Service of legal process may also be made upon the Trustee. F. Pension Benefit Guaranty Corporation Benefits provided by the Plan are NOT insured by the Pension Benefit Guaranty Corporation under Title IV of the Employee Retirement Income Security Act of 1974 because the insurance provisions under ERISA are not applicable to the Plan. IV. PARTICIPATION IN THE PLAN Participation in the Plan entitles you to make 401(k) salary reduction contributions on either a pre-tax basis or on a Roth after-tax basis to a tax deferred trust account established for your benefit under the Plan, which account you can then draw on to meet your financial needs after termination of your employment. It also entitles you to make, with the Administrator's permission, rollover contributions to your account from distributions you receive under certain other retirement plans. Additionally, participants in the Plan who have completed at least one "Year of Service" become eligible to share in Employer matching contributions and, after two "Years of Service," discretionary Employer qualified non-elective contributions and profit sharing contributions. Before you become a member or a "Participant" in the Plan, there are certain eligibility and participation rules which you must meet. These rules are explained in this Article IV. A. Eligibility Requirements 4

6 To be eligible to participate in the Plan you must be an employee of SkyWest or SkyWest Airlines, Inc. (in either case, your Employer ). You must also complete the participation service requirements set forth below. Persons classified by the Employers as "independent contractors" may not participate in the Plan even if they are otherwise later determined by any governmental agency or court to be a common-law employee of an Employer. B. Participation Service Requirements You will be eligible to participate in the Plan once you satisfy the requirements listed below. However, you will not actually enter the Plan until you reach the "Entry Date" as described in Section C of this Article IV. You will be eligible to participate in the Plan's salary reduction 401(k) and Roth contribution features if you are still employed by an Employer that has adopted the Plan on the date that is 90 days after your most recent employment commencement date with the Employer. If your employment terminates before you complete that 90- day waiting period, you will not be eligible to participate. You will be eligible to participate in the Plan with respect to Employer matching contributions and qualified non-elective contributions once you have completed one (1) "Year of Service" for your Employer, measured from your most recent employment commencement date. Certain other limitations apply, however, if you are a highly compensated employee that may restrict your ability to share in these Employer contributions. Section F of this Article IV explains how "Years of Service" are calculated. With respect to Employer discretionary profit sharing contributions, you will be eligible to participate in the allocation of profit sharing contributions under the Plan once you have completed two "Years of Service" with the Employer. Again, Section F of this Article IV explains how "Years of Service" are calculated. If you are a veteran and are reemployed under the Uniformed Services Employment and Reemployment Rights Act of 1994, your qualified military service may be considered service under the Plan. If you may be affected by this law, ask the Plan Administrator for further details. Once you have satisfied the Plan's eligibility requirements, your next step will be to actually become a member or a "Participant" in the Plan. C. Entry Date You may begin participating under the Plan on the "Entry Date" that is coincident with or immediately following the date you satisfy the eligibility requirements outlined above. The following describes the specific Entry Date that applies for each type of contribution under the Plan. Special rules may apply if you terminate employment and are then rehired. If you have questions about the timing of your Plan participation, please contact the Plan Administrator care of the SkyWest Benefits Department at the address shown above. Your Entry Date with respect to the right to make salary reduction contributions is the first day of the calendar month coincident with or next following the date you satisfy the 90-days of service requirement specified above. Prior to your Entry Date, you will receive an enrollment kit in the mail. The enrollment kit will contain information on how you will enroll in the Plan, make your initial salary deduction election and information on the investment choices offered to you. With respect to matching contributions, qualified non-elective contribution and discretionary profit sharing contributions, your Entry Date will be the date you satisfy the one Year of Service and two Years of Service eligibility requirements, as applicable, specified above. D. Termination of Eligible Employee Status 5

7 If you cease to be an eligible employee of the Employers for any reason, then effective on the date your employment terminates, you will cease active participation in the Plan, no longer be able to make salary reduction contributions to the Plan, and not be eligible for Employer contributions with respect to periods following your termination of employment. You will remain an inactive participant in the Plan, however, until your account balance under the Plan, if any, has been distributed. E. Participation Upon Return to Eligible Employment If you cease to be an active Participant because you terminate employment, and you later return to work for SkyWest, SkyWest Airlines, Inc. or another participating Employer, then effective on the date you return to work you will again become an active Participant in the Plan with the same status as you had prior to your termination of employment. F. Year of Service A "Year of Service" is a complete 12 consecutive month computation period of employment with an Employer in which you render at least 1,000 Hours of Service. For purposes of determining eligibility to participate in Matching and Profit Sharing Contributions and the rate of Matching Contributions, the applicable computation period for determining Years of Service is your first 12 months of employment with an Employer measured from your most recent employment commencement date and each subsequent 12- month period of employment with an Employer commencing on the anniversary of your most recent employment commencement date. For example, if an employee began work for an Employer on January 15, 2014, and completed 1,000 or more Hours of Service in the 12-month period ending January 14, 2015 and more than 1,000 Hours of Service in the period January 15, 2015 through January 14, 2016, he or she would have one Year of Service on January 14, 2015 and thus would become eligible to start sharing in Matching Contributions as of January 14, Under this example, the employee would have two Years of Service on January 14, 2016 and would, therefore, become eligible to start sharing in Profit Sharing Contributions as of January 14, You will not be credited with a Year of Service for any partial portion of a 12-month computation period even if you work 1,000 or more Hours of Service during that partial period and must be employed by an Employer at the close of the 12-month computation period to receive credit for a Year of Service for that period. G. Hours of Service You will be credited with an Hour of Service for: (a) each hour for which you are directly or indirectly compensated by us for the performance of duties during the Plan Year; (b) each hour for which you are directly or indirectly compensated by us for reasons other than performance of duties (such as vacation, holidays, sickness, disability, lay-off, military duty, Jury duty or leave of absence during the Plan Year); and (c) each hour for back pay awarded or agreed to by us. You will not be credited for the same Hours of Service both under (a) or (b), as the case may be, and under (c). A. General V. CONTRIBUTIONS TO THE PLAN 6

8 As a Participant under the Plan, you may elect to reduce your compensation each payroll period by a specific percentage and have that amount contributed to the Plan on your behalf by your Employer as either a pre-tax Deferred Compensation Contribution (referred to in this Summary, and commonly known as, a "401(k) Contribution ) or an after-tax Deferred Compensation Contribution (referred to in this Summary, and commonly known as, a Roth Contribution ). You generally are not subject to income tax on your 401(k) Contributions until you withdraw those amounts from the Plan. In contrast, you generally will be subject to income tax on your Roth Contributions at the time those contributions are made, but under current law later distribution of those Roth Contributions (and any investment gains thereon) to you will not be subject to income tax if certain requirements are met. In either case, your elective compensation reduction contributions will be subject to Social Security and Medicare taxes when withheld from your pay. You are not required to contribute any money to the Plan in order to participate in the Plan. However, once you have completed one Year of Service you will receive additional amounts in the form of matching contributions if you do contribute. In addition, the Employers may make additional contributions to the Plan on your behalf. This Article describes the types of contributions that may be made to the Plan and how these monies will be allocated to your account to provide for your retirement benefit. B. 401(k) Contributions As a Participant, and subject to the limits described below, you may elect to contribute to the Plan and thereby defer up to 100% of your compensation after any required payroll withholding taxes each year as a pre-tax 401(k) Contribution instead of receiving that amount in cash. The amount you elect to contribute and defer as a 401(k) Contribution, and any earnings on that amount, will not be subject to income tax until it is actually distributed to you. However, the amount you defer is counted as compensation for Social Security purposes when contributed. Your total 401(k) Contribution and Roth Contributions (as described below) in any calendar year may not exceed a certain dollar limit which is set by law and adjusted for inflation. For 2014 that limit is $17,500. For any calendar year in which you will attain age 50 or older, you may also elect to defer additional amounts (called "Catchup Contributions") to the Plan. The additional catch-up contributions may be contributed through pre-tax 401(k) Contributions or as Roth Contributions regardless of other limitations on the amount that you may defer to the Plan. The maximum "catch-up contribution" that you can make in 2014 is $5,500. After 2014, the maximum compensation reduction contribution levels may increase for cost-of-living adjustments. You should also be aware that the above annual dollar limit is an aggregate limit that applies to all deferrals you may make under this Plan and any other cash or deferred arrangements (including tax-sheltered 403(b) annuity contracts, simplified employee pensions or other 401(k) plans in which you may be participating). Generally, if your total deferrals under all cash or deferred arrangements for a calendar year exceed the annual dollar limit, the excess must be included in your income for the year. For this reason, it is desirable to request in writing that these excess deferrals be returned to you. If you fail to request such a return, you may be taxed a second time when the excess deferral is ultimately distributed from the Plan. You must decide which plan or arrangement you would like to have return any such excess. If you decide that the excess should be distributed from this Plan, you must communicate this in writing to the Plan Administrator no later than the March 1st following the close of the calendar year in which such excess deferrals were made. However, if the entire dollar limit is exceeded in this Plan or any other plan maintained by us, you will be deemed to have notified the Plan Administrator of the excess. The Plan Administrator will then return the excess deferral and any earnings allocable to the excess to you by April 15th. You will always be 100% vested in the amount you contribute and defer as 401(k) Contributions, subject to adjustment for investment gains and losses thereon. This means that you will always be entitled upon distribution from the Plan to that amounts, as adjusted to reflect any investment gains or losses allocable to the investment of your trust account under the Plan. If there is an investment gain, then the balance in your account will increase. If there is an investment loss, then the balance in your account will decrease. Distributions from amounts attributable to your 401(k) Contributions (including any offset of loans) are not permitted before age 59-1/2 EXCEPT in the event of: (a) death; (b) disability; (c) separation from employment; (d) reasons of proven financial hardship as described in Article VIII A below; or (e) certain absences on account of attainment of leave to perform qualifying military service. In the event you receive a hardship distribution of your 7

9 401(k) Contributions, you will not be allowed to make additional 401(k) Contributions for a period of six (6) months after you receive the distribution. In addition, if you are a highly compensated employee (generally officers or individuals receiving wages in excess of certain amounts established by law), a distribution from amounts attributable to your 401(k) Contributions may be required to comply with certain annual non-discrimination testing requirements under the law. The Plan Administrator will notify you when such a distribution is required. C. Roth Contributions Once you are eligible to make 401(k) Contributions to the Plan, you will also be eligible to elect to make after-tax Roth Contributions to the Plan in lieu of or in combination with your elected rate of 401(k) Contributions. The sum of your Roth Contributions and 401(k) Contributions for the calendar year may not, however, exceed the applicable annual dollar limits described above (e.g., $17,500 for 2014 plus up to an extra $5,500 if you are 50 or older in 2014). Your Roth Contributions will be eligible for Employer Matching Contributions on the same basis as 401(k) Contributions and will be subject to the same restrictions on distribution as 401(k) Contributions except that the Plan does not permit Hardship Distributions, loans or in-service distributions on account of attaining age 59 ½ of Roth Contributions of Roth Contributions. Although taxable when contributed, under current tax law (subject to potential future change) subsequent distributions to you of your Roth Contributions (plus any investment earnings thereon) will not be subject to federal income tax if the Roth Contributions have been held in the Plan at least five years from the first day of the year in which you first begin making Roth Contributions to the Plan. The Roth Contributions of highly compensated employees may also be restricted under applicable nondiscrimination rules. The Plan Administrator will notify you when such a restriction applies and whether it requires a corrective distribution of a portion of your Roth Contributions. D. 401(k) Contribution and Roth Contribution Procedures The amount you elect to contribute and defer as a 401(k) Contribution or Roth Contribution will be deducted from your pay in accordance with procedures established by the Plan Administrator. The procedures will require that you enter into a compensation reduction agreement to commence 401(k) Contributions or Roth Contributions after you satisfy the Plan's eligibility requirements. You will be permitted to prospectively modify or revoke your prior elections at any time during the Plan Year in accordance with such procedures as the Plan Administrator determines. Generally, you must give at least 2 pay periods advance notice to modify your elections to completely revoke your contribution elections. Contact the Plan Administrator for further details. You may modify your election by calling the Benefits Helpline, an automated telephone system ( ), or via the Internet using Wells Fargo online services at Both systems are available 24 hours a day, 7 days a week and will enable you to change your deferral election. Wells Fargo Service Representatives are available by calling the Benefits Helpline ( ) Monday Friday, 7:00 a.m. 11:00 p.m., Eastern Time. E. Employer Contributions to the Plan Each year, the Employers will contribute to the Plan the following amounts in addition to your 401(k) Contributions and Roth Contributions: (1) For each payroll period ending after you have completed one Year of Service, a matching contribution ("Fixed Matching Contribution") equal to 100% of the amount of your 401(k) Contributions or Roth Contributions for that payroll period. In applying this matching percentage, however, only compensation reduction contributions up to the percentage of your payroll period compensation set forth below will be considered: Completed Plan Years of Service Maximum Payroll Period Compensation Matched 8

10 1-4 2% 5-9 4% 10 or more 6% You will share in this Fixed Matching Contribution if you have completed one (l) Year of Service. However, highly compensated employees who are officers (Vice President or higher) of an Employer are not eligible to share in Fixed Matching Contributions. (2) For each Plan Year ending after you have completed one Year of Service, a discretionary additional matching contribution (a Discretionary Matching Contribution") equal to such uniform percentage of your elective compensation reduction contributions for the Plan Year as SkyWest, in its sole discretion, determines, if any. The Employers have no obligation to make any Discretionary Matching Contribution for any year. Discretionary Matching Contributions and Fixed Matching Contributions are collectively referred to in this Summary as Matching Contributions. (3) A discretionary qualified non-elective contribution ("QNEC") on behalf of all non-highly compensated participants in such amount, if any, as SkyWest determines is necessary to cause the Plan to pass applicable non-discrimination tests for the Plan Year to which the contribution relates. You will share in this QNEC if you have completed one Year of Service, are actively employed by an Employer at any time during the Plan Year to which the contribution relates, and are not a highly compensated employee. SkyWest does not currently intend to make any QNECs. (4) A discretionary profit sharing contribution ("Profit Sharing Contribution") in such amount, if any, as SkyWest in its sole discretion determines. You will share in this discretionary Profit Sharing Contribution if you have completed two Years of Service and are actively employed by an Employer at any time during the Plan Year to which the contribution relates. There is no requirement that the Employers make any Profit Sharing Contributions. F. Allocation of Contributions We will allocate the amount you elect to defer through compensation reduction as a 401(k) Contribution to an account called an "Elective Account" maintained by the Trustees on your behalf. We will allocate the amount you elect to defer through compensation reduction as a Roth Contribution to an account called a "Roth Elective Deferral Account" maintained by the Trustees on your behalf. If you are eligible, we will also allocate to your Elective Account the Matching Contributions, if any, made to the Plan on your behalf. If you are eligible, we will also allocate to your Elective Account any QNEC made to the Plan on your behalf. Our discretionary Profit Sharing Contributions, if any, will be "allocated" or divided among all Participants who have completed at least two Years of Service and are actively employed by an Employer during the Plan Year to which the contribution relates. Your share of any discretionary Profit Sharing Contribution is determined under a formula that takes into account your relative percentage of the compensation of all Participants eligible to share in the contribution. That formula is as follows: Employer's X Your Compensation Profit Sharing Contribution Total Compensation of All Participants Eligible to Share For example: Suppose the discretionary Profit Sharing Contribution for the Plan Year is $500,000, Employee A's compensation for the Plan Year is $40,000, and the total compensation of all participants eligible to share, including Employee A, is $80,000,000. Employee A's share will be: $500,000 X $40,000 or $250 $80,000,000 9

11 behalf. Your share of Profit Sharing Contributions will be allocated to a separate account maintained on your You will always be 100% vested in all of your account balances, subject to adjustment for investment gains and losses. Your accounts will be credited periodically with the investment earnings or losses of the Plan's Trust fund allocable to your accounts. G. Compensation For the purposes of the Plan, "Compensation" has a special meaning. Compensation is defined as your total compensation paid to you by us during a Plan Year that is subject to income tax, that is, all your compensation reported on your W-2 Form, but including your otherwise pre-tax 401(k) Contributions and any salary reduction contributions under a cafeteria plan maintained by the Employers. The Plan, by law, cannot recognize compensation in excess of $260,000 per year. This amount may be adjusted in future years for cost of living increases. H. Annual Limit on Aggregate Contributions Generally, the law imposes a maximum limit ("Annual Limit") on the amount of contributions that may be allocated to your accounts under the Plan in any year. That Annual Limit applies to all contributions we make on your behalf, all contributions you make to the Plan (other than Catch-up Contributions at or after age 50) and any other amounts allocated to any of your accounts during the Plan Year, excluding your share of Plan investment earnings and any transfers/rollovers. This total cannot exceed the lesser of $52,000 (indexed for inflation) or 100% of your Compensation for the Plan Year. I. Transfers from Other Qualified Plans (Rollovers) At the discretion of the Plan Administrator, you may be permitted to deposit into the Plan distributions you have received from certain other tax-qualified employer retirement plans and certain IRAs. Such a deposit is called a "rollover" and may result in tax savings to you. You may ask your prior plan administrator or trustee to directly transfer (a "direct rollover") to this Plan all or a portion of any amount which you are entitled to receive as a distribution from a prior plan. Alternatively, if you received a distribution from a prior plan, you may elect with the Administrator's consent to deposit any amount eligible for rollover within 60 days of your receipt of the distribution. You should consult qualified tax counsel to determine if a rollover is in your best interest. Your rollover will be placed in a separate trust account maintained on your behalf called a "Transfer/Rollover Account." You will always be 100% vested in your Transfer/Rollover Account, as adjusted for investment gains and losses. You may withdraw the amounts in your "participant's transfer/rollover account" at any time. To obtain more information on a rollover contribution to the Plan, please call the Benefits Helpline ( ). Wells Fargo Service Representatives are available Monday Friday, 7:00 a.m. 11:00 p.m., Eastern Time to answer your questions and provide you with information on how to initiate a rollover. J. Restrictions on Alienation No participant may assign, transfer or voluntarily dispose of his or her interest in the Plan or accounts under the Plan except pursuant to a Qualified Domestic Relations Order ("QDRO") as described under Article VIII below or under Article XI below relating to Plan loans. A Participant may cause the Plan Trustee to buy or sell Common Shares for the benefit of the participant's accounts under the Plan in accordance with and subject to the limitations contained in the participant-directed investment procedures referenced in Section K of this Article V and subject to the securities law restrictions set forth in Article XV below. A participant's interest in the Plan and the Common 10

12 Stock held in his or her accounts under the Plan are not subject to liens or claims by the participant's creditors except in the case of liens for taxes owed, QDROs, and liens to secure repayment of plan loans. K. Investment of Accounts The Plan gives each Participant the right to direct the Trustees and Plan Administrator as to the manner in which the Participant's accounts are to be invested from among a menu of permitted investment options selected by the Plan Administrator. All such Participant-directed investments must be communicated to the Plan Administrator or its designee, and may only be modified, in accordance with such uniform written procedures as the Plan Administrator or its designee establishes from time to time. The Plan's investment options include SkyWest Common Stock and the various mutual funds and pooled investment vehicles listed on Schedule I to this Summary Plan Description. Schedule I also lists the annual rates of return for those investment options (including SkyWest Common Stock) for each of the calendar years ending December 31, 2012, 2013 and A copy of the Plan's directed investment procedures are also attached to Schedule I. The Plan Administrator may change the menu of investment options offered under the Plan and/or directed investment procedures at any time. A total of 1,011,000 shares of Common Stock, before share splits, are registered for issuance to the Plan. All such shares will be made available either from SkyWest's authorized but unissued shares of Common Stock or from shares of Common Stock reacquired by SkyWest, including shares repurchased by SkyWest on the open market. The Plan may purchase additional shares of Common Stock directly from third-parties in the open market. Participants who are executive officers subject to SkyWest's Insider Trading Policy, may not alter their Plan investment elections or modify their contribution rates during trading "blackout periods" under the Insider Trading Policy in any manner that results in a direct or indirect purchase or sale of Common Stock on their behalf under the Plan during such blackout periods or that otherwise affects the portion of their Plan accounts invested in Common Stock during the blackout period. For further information regarding the Insider Trading Policy, contact the Benefits Department or Corporate Secretary of SkyWest. Participants should also be aware that various mutual funds in which the Plan invests impose direct and indirect restrictions on the frequency of trading and/or penalties (such as early redemption fees) that may impact a participant's ability to buy or sell such investments within his or her Plan account. Such restrictions are hereby incorporated in the Plan's directed investment procedures. Participants are urged to consult the applicable prospectus for each mutual fund offered under the Plan before electing to cause the Plan to buy or sell that fund for their accounts under the Plan. If you do not elect to direct the investment of your accounts, those accounts will be invested in the Plan's Stable Return Fund investment option or such other "default" investment option as SkyWest designates. Section 404(c) of the Employee Retirement Income Security Act of 1974 ("ERISA") provides that if a Participant controls the investment of his or her Plan accounts, the Participant alone will be responsible for his or her investment results - both gains and losses. The Plan is intended to qualify under Section 404(c) of ERISA. As a result, the Employers, Plan Administrator, Trustee and other Plan fiduciaries will have no liability for any losses you incur in self-directing the investment of your own Accounts. Participants who elect to direct the investment of their accounts are also encouraged to diversify the investment of their accounts so as to reduce the risk of investment loss and to seek the advice of their own personal professional investment advisors. In particular, participants should carefully evaluate the amount of their accounts invested in SkyWest Common Stock to ensure that it is appropriate for their personal situations and that their accounts are adequately diversified. 11

13 You are under no obligation to invest any portion of your accounts in SkyWest Common Stock and, subject to the SkyWest, Inc. insider trading policy, may elect to diversify your account out of SkyWest Common Stock at any time. The Plan Administrator is the Plan fiduciary responsible for providing prospectuses and other additional information to you regarding the Plan's investment options. A separate prospectus is available and will be provided to you by the applicable mutual fund company or Plan Administrator free of charge for each mutual fund and other investment offered under the Plan. You should contact the applicable mutual fund company or the Plan Administrator to obtain a copy of any such prospectus before making any investment decision under the Plan with respect to that investment option. You may also obtain from the Plan Administrator upon request: (1) Information regarding the annual operating expenses and similar expenses of each Plan investment alternative; (2) The most recent prospectus, financial statements, reports, and other materials regarding each investment alternative; and (3) The most recent reported share or unit value of each investment option and of each asset within the portfolio of each investment asset that is a mutual fund; and (4) In the case of any fixed rate investment contracts or similar products, the name of the issuer, the term of the contract and the rate of return on the contract. The Plan Administrator will direct the Trustees as to the manner in which the Plan will vote all mutual fund shares held in participant directed accounts. Participants who invest their accounts in Common Stock will be permitted to direct the Trustees as to the manner in which such Common Stock is voted. The Trustees are the fiduciaries responsible for ensuring that information relating to the purchase, sale, holding, voting and tender of shares of Common Stock in Participant directed accounts remains confidential except to the extent otherwise required by law. When you direct the investment of your accounts, your accounts are segregated for purposes of determining the gains, earnings or losses on these investments. Your accounts will not share in the investment performance for other Participant directed accounts. You should remember that the amount of your benefits under the Plan will depend in part upon your choice of investments. Gains as well as losses can occur. There are no guarantees of performance, and neither your Employer, the Plan Administrator, the Trustees, nor any of their representatives provide investment advice or insure or otherwise guarantee the value or performance of any investment you choose. VI. BENEFITS UNDER THE PLAN UPON TERMINATION OF SERVICE A. Distribution of Benefits upon Death Your beneficiary will be entitled to 100% of your account balances upon your death, as adjusted for gains and loses through the date of distribution. If you are married at the time of your death, your spouse will be the beneficiary of the death benefit, unless you otherwise elect in writing on a form to be furnished to you by the Plan Administrator. If you wish to designate a beneficiary other than your spouse, your spouse must irrevocably consent to waive the spousal death benefit. That consent must be made in writing after full disclosure on forms provided by the Plan Administrator, must be witnessed by a notary public or Plan representative, and acknowledge the specific non-spouse beneficiary designated. If, however, (1) your spouse has validly waived any right to the death benefit in the manner outlined above, (2) your spouse cannot be located; or (3) you are not married at the time of your death, then your death benefit will be paid to the beneficiary of your own choosing. You may designate the beneficiary on a form to be 12

14 supplied to you by the Plan Administrator. If you change your designation and are married, your spouse must again consent to the change. Since your spouse has certain rights in the death benefit, you should immediately report any change in your marital status to the Plan Administrator. If you have no surviving spouse and no other beneficiary has been validly designated, your account balances will be paid to your estate following your death. B. Distribution of Benefits upon Other Types of Termination of Employment If your employment terminates for any reason other than death, you may elect to have your account balances distributed to you as soon as administratively feasible following your termination of employment or to instead defer your distribution until any later date permitted under the Plan. However, if the value of your vested benefit is $1,000 or less, a distribution will be made to you automatically within a reasonable time after you terminate employment. You are always 100% vested in your account balance under the Plan, as adjusted to reflect investment gains and losses. C. Distribution Request Procedure If you are eligible for a distribution from the Plan, you may request a distribution by calling the Benefits Helpline at , Monday Friday, 7:00 a.m. 11:00 p.m., Eastern Time. If you believe you are eligible for a distribution due to your disability, you must contact the SkyWest Benefits Office to obtain further information. VII. FORM OF DISTRIBUTION A. Distribution of Small Account Balances - $1,000 or Less If your total account balance under the Plan (including rollover contributions) does not exceed $1,000, then your benefit will be distributed to you automatically in a single lump-sum payment as soon as possible following the event that entitles you to a distribution. B. Distribution of Accounts over $1,000 If your vested benefit under the Plan exceeds $1,000, then distribution will commence as soon as reasonably practicable after you request distribution; provided, however, that certain "minimum required distribution rules" described below will require distribution to commence once you have attained age 70-1/2 and are no longer employed by an Employer. Distribution will be made in whichever of the following forms you (or, if you are deceased, your beneficiary) selects: (1) In an immediate single lump-sum payment in cash of 100% of your account balances on the date of distribution (or a combination of cash and any shares of Common Stock held in your accounts in kind); or (2) In monthly, quarterly, semi-annual or annual cash installments over a designated period of not more than your assumed life expectancy or you and your beneficiary's assumed joint life expectancies. C. No Annuity Form of Distribution In the past our Plan permitted annuity forms of payments. An annuity payment generally provides for payments extending for your life and, in some cases, for the life of your spouse. The annuity was provided by using your vested interest in the Plan and buying a contract from an insurance company. Thus, the value of the annuity contract never exceeded the value of your vested interest in the Plan. The Plan was amended in 2002 to eliminate the annuity form of distribution except in the cases of (1) former Participants who have already received an annuity form of distribution, and (2) vested interests in a 13

15 "Transfer/Rollover Account" that are attributable to plan-to-plan transfers (as distinguished from "direct rollovers") from another qualified retirement plan that offered an annuity distribution option. The Plan Administrator will notify you if the annuity form of distribution applies to you. D. Minimum Required Distribution Rules You may elect to delay the receipt of benefits unless a distribution is required to be made, as explained earlier, because your vested benefit under the Plan does not exceed $1,000. However, there are rules known as the "minimum required distribution rules" which require that certain minimum distributions be made from the Plan. Generally, these minimum distributions must begin not later than the April 1st following the year in which you reach age 70-1/2. However, if you are not a 5% owner, the required minimum distributions need not begin until the later of the April 1st following the end of the year in which you reach age 70-1/2 or retire from the Employers. You should see the Plan Administrator if you feel you may be affected by these rules. Regardless of the method of distribution selected, if you die your entire remaining account balance must be paid to your beneficiaries within five years after your death. However, if your spouse is your designated beneficiary, then payment of your death benefit may be delayed until the year in which you would have attained age 70-l/2. Minimum distributions must then be made over a period which does not exceed your spouse's life expectancy. VIII. DISTRIBUTION PRIOR TO TERMINATION OF SERVICE A. Hardship Distribution of Benefits The Plan Administrator may direct the Trustee to distribute to you up to 100% of your 401(k) Contributions from your Elective Account (but not earnings on that account) if you have incurred a "hardship," as described below and requested distribution on account of that hardship. A hardship distribution will reduce the value of your accounts. Withdrawal on account of hardship will be authorized only if the distribution is to be used for one of the following purposes: (1) expenses for medical care (described in Section 213(d) of the Internal Revenue Code) previously incurred by you or your dependent or necessary for you or your dependent to obtain medical care; (2) costs directly related to the purchase of your principal residence (excluding mortgage payments); (3) tuition and related educational fees for the next 12 months of post-secondary education for yourself, your spouse or dependent; (4) payment necessary to prevent your eviction from your principal residence or foreclosure on the mortgage of your principal residence; (5) burial or funeral expenses for your deceased parent, spouse, children or dependents; or (6) expenses for the repair or damage to your principal residence that would qualify for the casualty deduction under Internal Revenue Code Section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income). A hardship distribution will be made from your Elective Account, but only if you certify and agree that all of the following conditions are satisfied: (1) The distribution is not in excess of the amount of your immediate and heavy financial need. The amount of your immediate and heavy financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution; (2) You have obtained all distributions, other than hardship distributions, and all nontaxable (at the time of the loan) loans currently available under all plans maintained by your Employer; and (3) That your elective contributions will be suspended for at least six months after your receipt of the hardship distribution. 14