<PAGE>   1
                                                                    EXHIBIT 10.2


                                  SKYWEST, INC.

                         2001 ALLSHARE STOCK OPTION PLAN



<PAGE>   2




                                TABLE OF CONTENTS

<TABLE>
<S>     <C>                                                                                  <C>
1.      ESTABLISHMENT AND PURPOSE.............................................................1

2.      DEFINITIONS ..........................................................................1

3.      STOCK SUBJECT TO THE PLAN.............................................................4
        (a)    Aggregate Limitation on Shares Available for Issuance..........................4
        (b)    Aggregate Annual Limitation on Awards..........................................4
        (c)    Individual Annual Limitation...................................................4
        (d)    Adjustment for Change in Capitalization........................................4
        (e)    Re-Use of Shares...............................................................5

4.      ADMINISTRATION OF THE PLAN............................................................5

5.      ELIGIBILITY ..........................................................................6

6.      AWARDS UNDER THE PLAN; AWARD AGREEMENT................................................6

7.      OPTIONS ..............................................................................6
        (a)    Identification of Options......................................................6
        (b)    Exercise Price.................................................................6
        (c)    Term and Exercise of Options...................................................6
        (d)    Limitations on Incentive Stock Options.........................................7
        (e)    Effect of Termination of Employment............................................7
        (f)    Acceleration of Exercise Date Upon Change in Control...........................8
        (g)    Restrictions on Transferability................................................8

8.      RIGHTS AS A STOCKHOLDER AND DIVIDEND EQUIVALENTS......................................8
        (a)    General........................................................................8
        (b)    Dividend Equivalents...........................................................8

9.      DEFERRAL OF AWARDS....................................................................9

10.     NO SPECIAL EMPLOYMENT OR DIRECTORSHIP RIGHTS; NO RIGHT TO AWARDS......................9

11.     SECURITIES LAW AND LISTING MATTERS....................................................9

12.     WITHHOLDING TAXES.....................................................................9

13.     NOTIFICATION OF ELECTION UNDER SECTION 83(b) OF THE CODE..............................9

14.     NOTIFICATION UPON DISQUALIFYING DISPOSITION UNDER SECTION 421(b)
        OF THE CODE ..........................................................................10

15.     AMENDMENT OR TERMINATION OF THE PLAN..................................................10

16      TRANSFERS UPON DEATH; NONASSIGNABILITY................................................10

17      EXPENSES AND RECEIPTS.................................................................10
</TABLE>


                                       i
<PAGE>   3




<TABLE>

<C>                                                                                          <C>
18.     FAILURE TO COMPLY.....................................................................11

19.     RELATION TO BENEFIT PLANS.............................................................11

20.     APPLICABLE LAW........................................................................11
21.     PARTICIPANT RIGHTS....................................................................11

22.     UNFUNDED STATUS OF AWARDS.............................................................11

23.     NO FRACTIONAL SHARES..................................................................11

24.     BENEFICIARY...........................................................................11

25.     INTERPRETATION........................................................................12
</TABLE>


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<PAGE>   4




                                  SKYWEST, INC.

                         2001 ALLSHARE STOCK OPTION PLAN


1.    ESTABLISHMENT AND PURPOSE

      Skywest, Inc. hereby adopts the Skywest, Inc. 2001 Allshare Stock Option
Plan (the "Plan"). The Plan is intended to promote the interests of the Company
and the shareholders of the Company by providing employees of the Company and
its subsidiaries with appropriate incentives and rewards to encourage them to
enter into and continue in the employ of the Company and/or to acquire a
proprietary interest in the long-term success of the Company, thereby aligning
their interest more closely to the interest of the shareholders of the Company.

      The Board of Directors of the Company adopted the Plan on May 9, 2000.
Subject to approval of the Plan by the shareholders of the Company at the annual
shareholders meeting scheduled for August 8, 2000, the Plan shall become
effective on January 1, 2001.

2.    DEFINITIONS

      As used in the Plan, the following definitions apply to the terms
indicated below:

      (a)   "Award" shall mean an Option granted pursuant to the terms of the
            Plan.

      (b)   "Award Agreement" shall mean the written agreement between the
            Company and a Participant evidencing an Award.

      (c)   "Board of Directors" shall mean the Board of Directors of the
            Company.

      (d)   "Change in Control" shall mean a change in the beneficial ownership
            of the Company, the composition of the Board or the Company's
            business that occurs upon and as a result of:

                  (i)   The acquisition by any "person," as such term is used in
            Sections 13(d) and 14(d) of the Exchange Act (other than the
            Company, any trustee or other fiduciary holding securities under an
            employee benefit plan of the Company or any corporation owned,
            directly or indirectly, by the stockholders of the Company in
            substantially the same proportions as their ownership of Common
            Stock of the Company) of beneficial ownership (as defined in Rule
            13d-3 under the Exchange Act), directly or indirectly, of securities
            of the Company representing 50 percent or more of the combined
            voting power of the Company's then outstanding securities;

                  (ii)  The individuals who at the beginning of any two-year
            period constituted the members of the Board of Directors and any new
            director (other than a director designated by a person who has
            entered into an agreement with the Company to effect a transaction
            described in clause (i) or (iii) of this Section 2(d)) whose
            election by the Board of Directors or nomination for election was
            approved by a vote of at least two-thirds (2/3) of the directors
            then in office who either were directors at the beginning of the
            two-year period or whose election or nomination for election was
            previously so approved, ceasing for any reason to constitute at
            least a majority of the Board;




                                       1
<PAGE>   5

                  (iii) The shareholders of the Company approving and the
            Company consummating a merger or consolidation of the Company with
            any other entity, or the sale or other transfer of all or
            substantially all of the Company's assets to another entity, other
            than (A) a merger or consolidation which would result in the voting
            securities of the Company outstanding immediately prior thereto
            continuing to represent (either by remaining outstanding or by being
            converted into voting securities of the surviving entity) more than
            50 percent of the combined voting power of the voting securities of
            the Company or such surviving entity outstanding immediately after
            such merger or consolidation, (B) a merger or consolidation effected
            to implement a recapitalization of the Company (or similar
            transaction) in which no "person" (as herein above defined) acquires
            50 percent or more of the combined voting power of the Company's
            then outstanding securities, or (C) a sale or other transfer to
            another entity of all or substantially all of the Company's assets
            if the shareholders of the Company immediately prior to the sale own
            immediately after the sale more than 50 percent of the combined
            voting power of the equity interests in the acquiror; or

                  (iv)  The shareholders of the Company approving and the
            Company consummating a plan of complete liquidation of the Company.

      (e)   "Code" shall mean the Internal Revenue Code of 1986, as amended from
            time to time.

      (f)   "Committee" shall mean the Compensation Committee of the Board.

      (g)   "Company" shall mean Skywest, Inc., a Utah corporation, or any
            successor corporation.

      (h)   "Common Stock" shall mean the common stock, no par value, of the
            Company.

      (i)   "Director" shall mean any member of the Board of Directors.

      (j)   "Disability" shall mean permanent and total disability within the
            meaning of Section 22(e)(3) of the Code.

      (k)   "Effective Date" shall mean January 1, 2001.

      (l)   "Employee" shall mean an employee (as determined by the Committee)
            of the Company or any Subsidiary.

      (m)   "Exchange Act" shall mean the Securities Exchange Act of 1934, as
            amended from time to time.

      (n)   "Executive Officer" shall have the meaning set forth in Rule 3b-7
            promulgated under the Exchange Act.

      (o)   "Exercise Date" shall mean the effective date as of which a
            Participant exercises an Award.

      (p)   "Fair Market Value" of a share of Common Stock, as of a date of
            determination, shall mean the fair market value of a share of Common
            Stock, as determined by the Committee in good faith pursuant to the
            following rules:




                                       2
<PAGE>   6

                  (i)   If the principal market for the Common Stock is a
            national securities exchange or the NASDAQ stock market, then the
            "Fair Market Value" as of that date shall be the mean between the
            lowest and highest reported sale prices of the Stock on that date on
            the principal exchange or market on which the Common Stock is then
            listed or admitted to trading.

                  (ii)  If sale prices are not available or if the principal
            market for the Stock is not a national securities exchange and the
            Common Stock is not quoted on the NASDAQ stock market, the average
            between the highest bid and lowest asked prices for the Common Stock
            on such day as reported on the NASDAQ OTC Bulletin Board Service or
            by the National Quotation Bureau, Incorporated or a comparable
            service.

                  (iii) If the day is not a business day, and as a result,
            paragraphs (i) and (ii) next above are inapplicable, the Fair Market
            Value of the Stock shall be determined as of the next earlier
            business day. If paragraphs (i) and (ii) above are otherwise
            inapplicable, then the Fair Market Value of the Common Stock shall
            be determined in good faith by the Committee.

      (q)   "Incentive Stock Option" shall mean an Option that is an "incentive
            stock option" within the meaning of Section 422 of the Code.

      (r)   "Non-Employee Director" shall mean a Director who is not also an
            employee of the Company or any Subsidiary of the Company.

      (s)   "Non-Statutory Stock Option" or "Non-Qualified Stock Option" shall
            mean an Option that is not an Incentive Stock Option.

      (t)   "Option" shall mean an option to purchase shares of Common Stock
            granted pursuant to Section 7 of the Plan.

      (u)   "Participant" shall mean an Employee of the Company or a Subsidiary
            of the Company to whom an Award is granted pursuant to the Plan,
            and, upon such individual's death, such individual's successors,
            heirs, executors and administrators, as the case may be.

      (v)   "Plan" shall mean this 2001 Allshare Stock Option Plan, as amended
            from time to time.

      (w)   "Predecessor Plan" shall mean the Allshare Incentive Stock Option
            Plan adopted by the Company in 1995.

      (x)   "Subsidiary" shall mean a "subsidiary corporation" of the Company
            within the meaning of Section 424(f) of the Code.




                                       3
<PAGE>   7

3.    STOCK SUBJECT TO THE PLAN.

      (a)   Aggregate Limitation on Shares Available for Issuance.

            The maximum number of shares of Common Stock reserved for issuance
            pursuant to all Awards, including Incentive Stock Options, under the
            Plan shall be 2,000,000 shares (subject to adjustment as provided
            herein) plus any shares of Common Stock (not in excess of 311,250
            shares) which are subject to options granted under the Predecessor
            Plan to the extent those Predecessor Plan options are forfeited,
            canceled or expire after December 31, 2000 without delivery of
            shares of Common Stock. The shares of Common Stock reserved for
            issuance hereunder may be authorized but unissued Common Stock or
            authorized and issued Common Stock held in the Company's treasury or
            acquired by the Company for the purposes of the Plan.

      (b)   Aggregate Annual Limitation on Awards.

            The number of shares of Common Stock with respect to which Awards
            (including SARs denominated in shares but payable in cash) may be
            granted in any calendar year (may not exceed one percent of the
            Company's total issued and outstanding shares of Common Stock at the
            beginning of each calendar year (the "Annual One Percent Limit"),
            subject to adjustment as described below. To the extent that Awards
            granted with respect to shares of Common Stock in any calendar year
            beginning with 2001 are less than the Annual One Percent Limit for
            that calendar year, the unused portion of the Annual One Percent
            Limit (expressed in terms of percentage points, not number of
            shares) shall be carried forward and added to the Annual One Percent
            Limit for each succeeding calendar year until fully realized.

      (c)   Individual Annual Limitation.

            Subject to adjustment as provided herein, the total number of shares
            of Common Stock subject to Awards granted to any Participant during
            any calendar year shall not exceed 200,000 shares.

      (d)   Adjustment for Change in Capitalization.

            In the event that the Committee shall determine that any dividend or
            other distribution (whether in the form of cash, Common Stock, or
            other property), recapitalization, stock split, reverse stock split,
            reorganization, merger, consolidation, spin-off, combination,
            repurchase, or share exchange, or other similar corporate
            transaction or event, affects the Common Stock such that an
            adjustment is appropriate in order to prevent dilution or
            enlargement of the rights of Participants under the Plan, then the
            Committee shall make such equitable changes or adjustments as it
            deems necessary or appropriate to any or all of (i) the number and
            kind of shares of Common Stock which may thereafter be issued in
            connection with Awards, including adjustment of the maximums
            specified in Sections 3(a) through 3(c) above, (ii) the number and
            kind of shares of Common Stock issued or issuable in respect of
            outstanding Awards, and (iii) the exercise price relating to any
            Award; provided that, with respect to Incentive Stock Options, such
            adjustment shall be made in accordance with Section 424 of the Code.




                                       4
<PAGE>   8

      (e)   Re-Use of Shares.

            The following shares of Common Stock shall again become available
            for delivery under the Plan: (i) any shares subject to an Award that
            remain unissued upon the cancellation, surrender, exchange or
            termination of such Award for any reason whatsoever; (ii) any shares
            that are not delivered upon exercise or vesting of an Award because
            the shares are held back to pay the Exercise Price and/or
            withholding taxes due upon exercise or because the share-based Award
            is otherwise settled in cash; and (iii) in any case in which a
            Participant pays the Exercise Price of an Option and/or applicable
            withholding taxes by tendering shares of Common Stock (whether by
            actual delivery or by attestation), that number of shares covered by
            the Option being exercised that equal the number of shares so
            tendered.

4.    ADMINISTRATION OF THE PLAN.

      The Committee shall administer the Plan. The Committee shall have the
authority in its sole discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Awards; to determine the persons to whom and
the time or times at which Awards shall be granted; to determine the type and
number of Awards to be granted, the number of shares of Common Stock to which an
Award may relate and the terms, conditions, restrictions and performance
criteria relating to any Award; to determine whether, to what extent, and under
what circumstances an Award may be settled, canceled, forfeited, exchanged, or
surrendered; to construe and interpret the Plan and any Award; to prescribe,
amend and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of Award Agreements; and to make all other determinations
deemed necessary or advisable for the administration of the Plan.

      The Committee may, in its absolute discretion, without amendment to the
Plan (but subject to consent of the affected Participant if such act would
result in adverse tax consequences under the Code), accelerate the date on which
any Award becomes exercisable, waive or amend the operation of Plan provisions
respecting exercise after termination of employment of any Award or otherwise
adjust any of the terms of any Award.

      Except to the extent prohibited by applicable law, the Board may also
allocate and delegate to any two or more directors, at least one of whom shall
be a Non-Employee Director and a member of the Committee ("Subcommittee") the
authority to grant Options to newly hired employees (other than to Executive
Officers, "insiders" within the meaning of Section 16 of the Exchange Act and
"covered employees" within the meaning of Section 162(m) of the Code) and to set
the terms and conditions of such grants. The Board may revoke any such
delegation at any time. All references in Sections 6, 7(b) and 7(c)(i), shall be
deemed to include the Subcommittee to the extent the Board delegates Option
granting authority to the Subcommittee.

No member of the Committee or Subcommittee shall be liable for any action,
omission or determination relating to the Plan, and the Company shall indemnify
and hold harmless each member of the Committee and each other director or
employee of the Company to whom any duty or power relating to the administration
or interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Committee) arising out of any action, omission or
determination relating to the Plan, if, in either case, such action, omission or
determination was taken or made by such member, director or employee in good



                                       5
<PAGE>   9

faith and in a manner such member, director or employee reasonably believed to
be in or not opposed to the best interests of the Company.

5.    ELIGIBILITY.

      The persons who shall be eligible to receive Awards pursuant to the Plan
shall be all Employees of the Company and its Subsidiaries.

6.    AWARDS UNDER THE PLAN; AWARD AGREEMENT.

      The Committee (or Subcommittee, if applicable) may grant Options in such
amounts and upon such terms and conditions as it shall determine, subject to the
provisions of the Plan. Unless otherwise established by the Committee or
specified in the Award Agreement, each Award shall be deemed granted on the date
it is approved by the Committee (or Subcommittee, if applicable).

      Each Award granted under the Plan shall be evidenced by an Award Agreement
that shall contain the terms and conditions of the Award. By accepting an Award,
a Participant thereby agrees that the Award and any shares of Common Stock that
may be issued in connection with the Award shall be subject to all of the terms
and provisions of the Plan and the Award Agreement.

7.    OPTIONS.

      (a)   Identification of Options.

            Each Option shall be identified in the applicable Award Agreement as
            either an Incentive Stock Option or a Non-Qualified Stock Option.

      (b)   Exercise Price.

            Each Award Agreement with respect to an Option shall set forth the
            amount (the "Exercise Price") payable by the grantee to the Company
            upon exercise of the Option. The Option Exercise Price per share
            shall be determined by the Committee (or Subcommittee, if
            applicable), and in no event shall be less than the Fair Market
            Value of a share of Common Stock on the date the Option is granted.

      (c)   Term and Exercise of Options.

                  (i)   The Committee (or Subcommittee, if applicable) shall
            determine the expiration date of each Option; provided, however,
            that no Incentive Stock Option shall be exercisable more than 10
            years after the date of grant.

                  (ii)  An Option may be exercised for all or any portion of the
            shares as to which it is exercisable, provided, that no partial
            exercise of an Option shall be for an aggregate Exercise Price of
            less than $1,000. The partial exercise of an Option shall not cause
            the expiration, termination or cancellation of the remaining portion
            thereof.

                  (iii) An Option shall be exercised by delivering written
            notice (in the form attached to the Award Agreement or such other
            form as the Company prescribes) to the Company's principal office,
            to the attention of its Secretary, no less than one business day in
            advance of the effective date of the proposed exercise. Such notice
            shall specify the number of shares of Common Stock with respect to
            which the Option is being exercised


                                       6
<PAGE>   10

            and the effective date of the proposed exercise and shall be signed
            by the Participant or other person then having the right to exercise
            the Option. Such notice may be withdrawn in writing at any time
            prior to the close of business on the business day immediately
            preceding the effective date of the proposed exercise. Payment for
            shares of Common Stock purchased upon the exercise of an Option
            shall be made in cash, by certified check, bank cashier's check or
            wire transfer; provided, however, that if approved by the Committee
            on a case-by-case basis at the time of exercise payment also may be
            made by: (A) by tendering (through actual delivery or attestation)
            shares of Common Stock owned by the Participant with appropriate
            stock powers; (B) electing to have the Company retain shares of
            Common Stock which would otherwise be issued on the exercise of the
            Option; (C) irrevocably authorizing and directing a third party to
            sell shares of Common Stock acquired upon exercise of the Option and
            remit to the Company a sufficient amount of the proceeds to pay the
            Exercise Price and any applicable withholding tax; or (D) any
            combination of the foregoing forms. In determining the number of
            shares of Common Stock necessary to be delivered to or retained by
            the Company, such shares shall be valued at their Fair Market Value
            as of the Exercise Date.

                  (iv)  Certificates for shares of Common Stock purchased upon
            the exercise of an Option shall be issued in the name of the
            Participant or other person entitled to receive such shares, and
            delivered to the Participant or such other person as soon as
            practicable following the Exercise Date.

      (d)   Limitations on Incentive Stock Options.

                  (i)   To the extent that the aggregate Fair Market Value of
            shares of Common Stock with respect to which Incentive Stock Options
            are exercisable for the first time by a Participant during any
            calendar year under the Plan and any other incentive stock option
            plan of the Company (or any Subsidiary of the Company) shall exceed
            $100,000, such Options shall be treated as Non-Qualified Stock
            Options. Such Fair Market Value shall be determined as of the date
            on which each such Incentive Stock Option is granted.

                  (ii)  No Incentive Stock Option may be granted to an
            individual if, at the time of the grant, such individual owns stock
            possessing more than 10 percent of the total voting power of the
            Common Stock of the Company unless: (A) the exercise price per share
            of such Incentive Stock Option is at least 110 percent of the Fair
            Market Value of a share of Common Stock at the time such Incentive
            Stock Option is granted, and (B) such Incentive Stock Option is not
            exercisable after the expiration of five years from the date such
            Incentive Stock Option is granted.




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<PAGE>   11

      (e)   Effect of Termination of Employment.

                  (i)   Unless the applicable Award Agreement provides otherwise
            and except as provided by Section 7(f) with respect to a Change in
            Control, in the event that the employment of a Participant with the
            Company or a Subsidiary of the Company shall terminate for any
            reason other than death or Disability, (A) Options granted to the
            Participant, to the extent that they are exercisable at the time of
            such termination, shall remain exercisable until the date that is
            three months after such termination (or one year after the date of
            death, if death occurs within three months after the date of
            termination), on which date they shall expire, and (B) Options
            granted to such Participant, to the extent that they were not
            exercisable at the time of such termination, shall expire at the
            close of business on the date of such termination. Notwithstanding
            the foregoing, no Option shall be exercisable after the expiration
            of its term.

                  (ii)  Unless the applicable Award Agreement provides
            otherwise, in the event that the employment of a Participant with
            the Company or a Subsidiary of the Company shall terminate on
            account of the Disability or death of the Participant, (A) Options
            granted to such Participant, to the extent that they were
            exercisable at the time of such termination, shall remain
            exercisable until the first anniversary of such termination, on
            which date they shall expire, and (B) Options granted to such
            Participant, to the extent that they were not exercisable at the
            time of such termination, shall expire at the close of business on
            the date of such termination. Notwithstanding the foregoing, no
            Option shall be exercisable after the expiration of its term.

      (f)   Acceleration of Exercise Date Upon Change in Control.

                  (i)   Except as provided in the applicable Award Agreement,
            upon the occurrence of a Change in Control described in Section 2(d)
            each Option granted under the Plan and outstanding at such time
            shall become fully and immediately exercisable. Notwithstanding the
            foregoing, no Option shall be exercisable after the expiration of
            its term.

                  (ii)  In connection with a pending or completed Change in
            Control the Committee in its sole discretion may require that the
            Options be: (A) cashed out and terminated in exchange for a lump sum
            cash payment or shares of Common Stock having a value equal to the
            fair market value of the Options immediately preceding the Change in
            Control; and/or (B) converted into options in the acquiring entity
            having a fair market value immediately after the Change in Control
            equal to the fair market value of the Options immediately prior to
            the Change in Control. For this purpose, the fair market value of an
            Option shall equal the excess of the Fair Market Value of the
            underlying shares over the Exercise Price.


      (g)   Restrictions on Transferability.

            No Option may be transferred except by will or the laws of descent
            and distribution and is exercisable during the grantee's lifetime
            only by the grantee or his personal representative.



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<PAGE>   12

8.    RIGHTS AS A STOCKHOLDER.

      No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to any Award until the date of
issuance of a stock certificate with respect to such shares except to the extent
approved by the Committee and provided in the applicable Award Agreement. No
adjustment to any Award shall be made for dividends or other rights for which
the record date occurs prior to the date such stock certificate is issued.


9.    NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO AWARDS.

      Nothing contained in the Plan or any Award Agreement shall confer upon any
Participant any right with respect to continuing as an employee of the Company
or any Subsidiary or interfere in any way with the right of the Company or any
Subsidiary, subject to the terms of any separate agreement to the contrary, at
any time to terminate such employment or to increase or decrease the
compensation of the Participant. No person shall have any claim or right to
receive an Award hereunder. The Committee's granting of an Award to a
Participant at any time shall neither require the Committee to grant any other
Award to such Participant or other person at any time or preclude the Committee
from making subsequent grants to such Participant or any other person.

10.   SECURITIES LAW AND LISTING MATTERS.

      Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Common Stock under the Plan or make any other
distribution of benefits under the Plan unless such delivery or distribution
would comply with all applicable laws (including, without limitation, the
requirements of the Securities Act of 1933), and the applicable requirements of
any securities exchange or similar entity on which the shares of Company Common
Stock are listed or registered.

11.   WITHHOLDING TAXES.

      Whenever shares of Common Stock are to be delivered pursuant to an Award,
the Company shall have the right to require the Participant to remit to the
Company in cash an amount sufficient to satisfy any federal, state and local
withholding tax requirements related thereto as a condition to exercise. With
the approval of the Committee, a Participant may satisfy the foregoing
requirement by electing to have the Company withhold from delivery shares of
Common Stock having a fair market value equal to the minimum amount of tax to be
withheld, by tendering previously owned shares of Common Stock having a Fair
Market Value equal to the minimum withholding tax due and/or by other means
acceptable to the Committee on a case by case basis. Shares held back or
tendered to pay withholding taxes shall be valued at their Fair Market Value on
the date withheld or tendered. Fractional share amounts shall be settled in
cash. Such a withholding election may be made with respect to all or any portion
of the shares to be delivered pursuant to an Award.


12.   NOTIFICATION UPON DISQUALIFYING DISPOSITION UNDER SECTION 421(b) OF THE
      CODE.

      Each Award Agreement with respect to an Incentive Stock Option shall
require the Participant to notify the Company in writing of any disposition of
shares of Common Stock issued pursuant to the exercise of such Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within ten days of such disposition.




                                       9
<PAGE>   13

13.   AMENDMENT OR TERMINATION OF THE PLAN.

      The Board of Directors may, at any time, suspend or terminate the Plan or
revise or amend it in any respect whatsoever; provided, however, that
stockholder approval shall be required if and to the extent the Board of
Directors determines that such approval is appropriate for purposes of
satisfying Section 162(m) or 422 of the Code or to the extent such approval is
required by the rules of any stock exchange on which the Common Stock is listed.
Nothing herein shall restrict the Committee's ability to exercise its
discretionary authority pursuant to Section 4 of the Plan, which discretion may
be exercised without amendment to the Plan. No action hereunder may, without the
consent of a Participant, reduce the Participant's rights under any outstanding
Award.

14.   TRANSFERS UPON DEATH; NONASSIGNABILITY.

      Upon the death of a Participant, outstanding Awards granted to such
Participant may be exercised only by the executor, administrator or
representative of the Participant's estate or by a person who shall have
acquired the right to such exercise by will or by the laws of descent and
distribution. No transfer of an Award by will or the laws of descent and
distribution shall be effective to bind the Company unless the Committee is
furnished with (a) written notice thereof and with a copy of the will and/or
such evidence as the Committee may deem necessary to establish the validity of
the transfer, and (b) an agreement by the transferee to comply with all the
terms and conditions of the Award that are or would have been applicable to the
Participant and to be bound by the acknowledgments made by the Participant in
connection with the grant of the Award.

      During a Participant's lifetime no Award shall be assignable or
transferable, by operation of law or otherwise. Any transfer or assignment of an
Award in violation of the preceding sentence shall be void and, if voluntary,
shall cause the respective Award to immediately and automatically terminate.
Without limiting the foregoing, in the event an order by any court, arbitrator
or other tribunal in any domestic proceeding shall purport to transfer any
Award, such Award shall immediately and automatically terminate.

15.   EXPENSES AND RECEIPTS.

      The Company shall pay the expenses of the Plan. Any proceeds received by
the Company in connection with any Award will be used for general corporate
purposes.

16.   FAILURE TO COMPLY.

      In addition to the remedies of the Company elsewhere provided for herein,
failure by a Participant (or beneficiary or transferee) to comply with any of
the terms and conditions of the Plan or the applicable Award Agreement, unless
such failure is remedied by such Participant (or beneficiary or transferee)
within ten days after notice of such failure by the Committee, shall be grounds
for the cancellation and forfeiture of such Award, in whole or in part, as the
Committee, in its absolute discretion, may determine.

17.   RELATION TO BENEFIT PLANS.

      Options will not be considered as compensation for the purpose of any
other benefit plans maintained by the Company except as expressly provided in
the documents evidencing such plans.

18.   APPLICABLE LAW.




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      Except to the extent preempted by any applicable federal law, the Plan
will be construed and administered in accordance with the laws of the State of
Utah, without reference to the principles of conflicts of law.

19.   PARTICIPANT RIGHTS.

      No Participant shall have any claim to be granted any Award under the
Plan, and there is no obligation for uniformity of treatment for Participants.
Except as provided specifically herein, a Participant shall have no rights as a
stockholder with respect to any shares covered by any Award until the date of
the issuance of a Common Stock certificate to him for such shares or any
non-contractual rights. Neither the Company nor its subsidiaries, officers,
directors or agents shall have any responsibility, duty or obligation with
respect to any Award (including without limitation, any fiduciary or equitable
duty) other than those contractual obligations set forth in this Plan and the
applicable Award Agreement. No person connected with the Plan warrants or
guarantees the federal, state and local income, estate and gift tax consequences
of Awards to Participants.

20.   UNFUNDED STATUS OF AWARDS.

      The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award Agreement shall
give any such Participant any rights that are greater than those of a general
creditor of the Company.

21.   NO FRACTIONAL SHARES.

      No fractional shares of Common Stock shall be issued or delivered pursuant
to the Plan. The Committee shall determine whether cash, other Awards, or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.

22.   BENEFICIARY.

      A Participant may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Participant, the executor or administrator of the Participant's
estate shall be deemed to be the Participant's beneficiary.

23.   INTERPRETATION.

      The Plan is designed and intended to comply with 422 of the Code, and all
provisions hereof shall be construed in a manner to so comply.



      IN TESTIMONY WHEREOF, the Company has caused this Plan document to be
executed by its duly authorized officer this ______ day of _____, 2000.


                                           SKYWEST, INC.





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                                           By: ________________________________

                                           Its: _______________________________

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