<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 10, 1997
REGISTRATION NO. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
ALASKA AIR GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
91-1292054
(I.R.S. Employer Identification No.)
19300 PACIFIC HIGHWAY SOUTH
SEATTLE, WASHINGTON 98188
(Address of Principal Executive Offices, including Zip Code)
ALASKA AIR GROUP, INC.
PROFIT SHARING STOCK PURCHASE PLAN
AND
1997 NONOFFICER LONG-TERM
INCENTIVE EQUITY PLAN
(Full Title of the Plans)
---------------------
KEITH LOVELESS
Associate General Counsel and Corporate Secretary
Alaska Air Group, Inc.
19300 Pacific Highway South
Seattle, Washington 98188
(206) 431-3731
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)
-------------------
COPY TO:
J. Sue Morgan
Perkins Coie
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
(206) 583-8888
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value
per share(2)
Profit Sharing Stock
Purchase Plan 2,000,000(3) $34.3437 $68,687,400 $20,815
1997 Nonofficer Long-Term
Incentive Plan 250,000(3) $34.3437 $ 8,585,925 $ 2,602
(Total) $77,273,325 (Total) $23,417
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended. The price
per share is estimated to be $34.3437, based on the average of the high
sales price ($34.6875) and the low sales price ($34.00) for the Registrant's
Common Stock as reported on the New York Stock Exchange on November 5, 1997.
(2) Includes rights to purchase Series A Participating Preferred Stock
associated with the Common Stock.
(3) Includes an indeterminate number of additional shares that may be necessary
to adjust the number of shares reserved for issuance pursuant to the plans
as the result of any future stock dividend, stock split, spin-off,
combination or exchange of shares, recapitalization, merger, consolidation,
distribution to stockholders other than a normal cash dividend, or similar
adjustment of the Registrant's outstanding Common Stock.
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed on February 15, 1997 with the Securities and Exchange
Commission (the "Commission") under Section 13(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), which contains certified financial
statements for the most recent fiscal year for which such statements have been
filed;
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the Annual Report on Form 10-K referred to in (a) above; and
(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A filed with the Commission on
September 19, 1985 (Registration No. 1-8957), under Section 12(b) of the
Exchange Act, including any amendments or reports filed for the purpose of
updating such description.
Any document filed by the Registrant pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date hereof and prior to the filing of
a post-effective amendment that indicates that the securities offered hereby
have been sold or that deregisters the securities covered hereby then remaining
unsold shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective date
on which such document is filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides that a Delaware corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
cause to believe his or her conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if
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such person acted under similar standards, except that no indemnification may be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the court in which such action or suit was brought shall determine that despite
the adjudication of liability, such person is fairly and reasonably entitled to
be indemnified for such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director
or officer of a Delaware corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections 145(a) and (b) or in the
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses actually and reasonably incurred by such person in connection
therewith; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the corporation may purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
such person or incurred by him or her in any such capacity or arising out of his
or her status as such whether or not the corporation would have the power to
indemnify such person against such liabilities under Section 145.
Article VIII of the Registrant's By-Laws requires indemnification to the
full extent permitted by the DGCL or other applicable law. Subject to any
restrictions imposed by such law, the By-Laws provide a right to indemnification
for all expense, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts to be paid in settlement)
actually and reasonably incurred or suffered by the indemnitee in connection
with any actual or threatened action, suit or proceeding by reason of the fact
that such person is or was a director or officer of the Registrant or, being or
having been such a director, officer or an employee of the Registrant, he or she
is or was serving at the request of the Registrant as a director, officer,
employee or agent of another corporation or other entity.
Section 102(b)(7) of the DGCL provides that a corporation in its
original certificate of incorporation or an amendment thereto validly approved
by stockholders may eliminate or limit personal liability of members of its
board of directors of governing body for breach of a director's fiduciary duty.
However, no such provision may eliminate or limit the liability of a director
for breaching his or her duty of loyalty, failing to act in good faith, engaging
in intentional misconduct or knowingly violating a law, paying a dividend or
approving a stock repurchase that was illegal or obtaining an improper personal
benefit. A provision of this type has no effect on the availability of equitable
remedies, such as injunction or rescission, for breach of fiduciary duty.
Article 11 of the Registrant's Certificate of Incorporation provides for such
limitation of liabilities to the full extent permitted by the DGCL.
The Registrant's officers and directors are covered by insurance (with
certain exceptions and with certain limitations) which indemnifies them against
losses and liabilities arising from certain alleged "wrongful acts," including
alleged errors or misstatements, or certain other alleged wrongful acts or
omissions constituting neglect or breach of duty.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
5.1 Opinion of Perkins Coie regarding legality of the Common
Stock being registered
</TABLE>
II-2
<PAGE> 4
<TABLE>
<S> <C>
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie (included in its Opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see page II-4)
99.1 Alaska Air Group, Inc. Profit Sharing Stock Purchase Plan
99.2 Alaska Air Group, Inc. 1997 Nonofficer Long-Term Incentive Equity Plan
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(b) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(c) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(a) and (1)(b) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or
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<PAGE> 5
otherwise, the Registrant has been advised that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Seattle, State of Washington, on the 6th day of
November, 1997.
ALASKA AIR GROUP, INC.
By /s/ John F. Kelly
---------------------------------------
John F. Kelly
Chairman of the Board, Chief Executive
Officer and President
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes John F. Kelly and
Harry G. Lehr, and each of them, as attorneys-in-fact, with full power of
substitution, to execute in the name and on behalf of such person, individually
and in each capacity stated below, and to file, any or all amendments (including
pre-effective and post-effective amendments) to this Registration Statement, and
to file the same with all exhibits thereto, and other documents in connection
therewith, with the Commission or any regulatory authority.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 6th day of November, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------- -----------------------------------------
<S> <C>
/s/ John F. Kelly Chairman of the Board, Chief Executive
- ----------------------------------- Officer and President
John F. Kelly
/s/ Harry G. Lehr Senior Vice President/Finance (Principal
- ----------------------------------- Financial and Accounting Officer)
Harry G. Lehr
/s/ Bradley D. Tilden
- ----------------------------------- Controller
Bradley D. Tilden
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
/s/ Ronald F. Cosgrave
- ----------------------------------- Director
Ronald F. Cosgrave
/s/ Mary Jane Fate
- ----------------------------------- Director
Mary Jane Fate
/s/ Bruce R. Kennedy
- ----------------------------------- Director
Bruce R. Kennedy
/s/ R. Marc Langland
- ----------------------------------- Director
R. Marc Langland
/s/ Byron I. Mallott
- ----------------------------------- Director
Byron I. Mallott
/s/ Robert L. Parker, Jr.
- ----------------------------------- Director
Robert L. Parker, Jr.
/s/ John V. Rindlaub
- ----------------------------------- Director
John V. Rindlaub
/s/ Richard A. Wien
- ----------------------------------- Director
Richard A. Wien
</TABLE>
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<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -------------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie regarding legality of Common Stock being
registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie (included in its Opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see page II-4)
99.1 Alaska Air Group, Inc. Profit Sharing Stock Purchase Plan
99.2 Alaska Air Group, Inc. 1997 Nonofficer Long-Term Incentive Equity Plan
</TABLE>
<PAGE> 1
EXHIBIT 5.1
PERKINS COIE
A LAW PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
1201 THIRD AVENUE, 40TH FLOOR, SEATTLE, WASHINGTON 98101-3099
TELEPHONE: (206) 583-8888 FACSIMILE: (206) 583-8500
November 6, 1997
Alaska Air Group, Inc.
19300 Pacific Highway South
Seattle, WA 98188
Re: Registration Statement on Form S-8 of Shares of Common Stock,
Par Value $1.00 per Share, of Alaska Air Group, Inc.
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended ("the Act"), which you are filing with the
Securities and Exchange Commission with respect to 2,250,000 shares of Common
Stock, $1.00 par value per share (the "Shares"), which may be issued pursuant to
the Alaska Air Group, Inc. Profit Sharing Stock Purchase Plan and the Alaska Air
Group, Inc. 1997 Nonofficer Long-Term Incentive Equity Plan (the "Plans"). We
have examined the Registration Statement and such documents and records of the
Company and other documents as we have deemed necessary for the purpose of this
opinion. In giving this opinion, we are assuming the authenticity of all
instruments presented to us as originals, the conformity with originals of all
instruments presented to us as copies and the genuineness of all signatures.
Based upon and subject to the foregoing, we are of the opinion that any
original issuance Shares that may be issued pursuant to the Plans have been duly
authorized and that, upon the due execution by the Company and the registration
by its registrar of such Shares, issuance thereof by the Company in accordance
with the terms of the Plans, and the receipt of consideration therefor in
accordance with the terms of the Plans, such Shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
PERKINS COIE
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
------------------------------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated January
24, 1997 included in Alaska Air Group, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1996, and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Seattle, Washington
November 6, 1997
<PAGE> 1
EXHIBIT 99.1
ALASKA AIR GROUP, INC.
PROFIT SHARING STOCK PURCHASE PLAN
1. PURPOSE
The purpose of the Alaska Air Group, Inc. Profit Sharing Stock Purchase
Plan (the "Plan") is to:
o provide an opportunity for employees eligible to receive cash
distributions under the Profit Sharing Plans of Alaska Airlines, Inc.
("Alaska Airlines") and Horizon Air Industries, Inc. ("Horizon") to
invest in the common stock (the "Common Stock") of Alaska Air Group,
Inc. (the "Company") at a 15% discount; and
o increase such employees' stock ownership and align their interests
more fully with those of the stockholders.
2. TERM
The Plan became effective on January 27, 1997 and shall remain in effect
until terminated by action of the Company's Board of Directors (the "Board").
After termination of the Plan, no future awards may be granted but previously
granted awards shall remain outstanding in accordance with their applicable
terms and conditions and the terms and conditions of the Plan.
3. PLAN ADMINISTRATION
The Pension and Benefits Administrative Committee (the "Committee")
shall be responsible for administering the Plan. The members of the Committee
shall be appointed by the Board. The Committee shall have full and exclusive
power to interpret the Plan and to adopt such rules, regulations and guidelines
for carrying out the Plan as it may deem necessary or proper, all of which power
shall be executed in the best interests of the Company and in keeping with the
objectives of the Plan. This power includes but is not limited to selecting
award recipients, establishing all award terms and conditions and adopting
modifications, amendments and procedures, as well as rules and regulations
governing awards under the Plan, and to make all other determinations necessary
or advisable for the administration of the Plan. The interpretation and
construction of any provision of the Plan or any right granted hereunder and all
determinations by the Committee in each case shall be final, binding and
conclusive with respect to all interested parties.
4. PARTICIPATION
The Plan is offered to those employees who are designated as eligible to
receive cash profit sharing distributions under Alaska Airlines' and Horizon's
Profit Sharing Plans ("Participants").
<PAGE> 2
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 6 of the Plan, the aggregate number
of shares of Common Stock ($1.00 par value) of the Company ("shares") which may
be issued to Participants under the Plan shall be 2,000,000. The payment of cash
dividends and dividend equivalents paid in cash in conjunction with outstanding
SPP Restricted Stock (as that term is defined below) shall not be counted
against the shares available for issuance.
Any shares issued under the Plan may consist in whole or in part of
authorized and unissued shares or of treasury shares. Fractional shares may be
issued under the Plan.
6. ADJUSTMENTS AND REORGANIZATIONS
In the event of any stock dividend, stock split, combination or exchange
of shares, merger, consolidation, spin-off, recapitalization or other
distribution (other than normal cash dividends) of Company assets to
stockholders, or any other change affecting shares or share price, the Committee
shall make a proportionate adjustment with respect to: (a) the aggregate number
of shares that may be issued under the Plan and (b) each outstanding share of
SPP Restricted Stock under the Plan.
7. DEFINITIONS
For purposes of the Plan, the following terms shall have the following
meanings:
o PROFIT SHARING DISTRIBUTION. The annual profit sharing distribution
paid by the Company, Alaska Airlines or Horizon under Alaska
Airlines' or Horizon's Profit Sharing Plans or any successor or
similar plans for any fiscal year to any employee thereof, in
recognition of performance of services to Alaska Airlines, Horizon or
their affiliates.
o FAIR MARKET VALUE. The closing price of a share of Common Stock as
reported daily in The Wall Street Journal or similar readily
available public source for the date in question. If no sales of
shares were made on such date, the closing price of a share as
reported for the preceding day on which a sale of shares occurred
shall be used.
o PURCHASE DATE. A date to be determined by the Committee, which date
shall be no later than March 1 of the year in which any Profit
Sharing Distribution is determined and which date shall be the only
date on which the Participants may elect to purchase shares under the
Plan with respect to such Profit Sharing Distribution.
o SPP RESTRICTED STOCK. Common Stock purchased pursuant to the terms
of the Plan, which is subject to restrictions as set forth in
Section 11.
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<PAGE> 3
o STOCK PURCHASE PRICE. The price per share of Common Stock acquired
pursuant to the terms of the Plan as determined by the Committee,
which price shall be 85% of the Fair Market Value of a share of
Common Stock based on the average closing price for December or on
the Purchase Date, whichever is less.
8. RIGHT TO PURCHASE COMMON STOCK
As of the date that Profit Sharing Distributions are determined under
Alaska Airlines' or Horizon's Profit Sharing Plans, each Participant will be
entitled to use up to the net after-tax amount of the Participant's Profit
Sharing Distribution to purchase, on the Purchase Date, shares of the Company's
Common Stock.
A Participant shall be entitled to purchase shares under the Plan only
on the applicable Purchase Date. A Participant may elect to use some or all of
the Participant's net after-tax Profit Sharing Distribution to purchase shares
under the Plan. To the extent a Participant does not purchase the maximum number
of shares permitted under the Plan on the Purchase Date, the right to elect to
purchase shares with the remaining Profit Sharing Distribution amount shall
terminate.
9. NUMBER OF SHARES
The maximum number of shares of Common Stock that may be purchased by
any Participant for any fiscal year shall equal the number of shares that can be
purchased on the Purchase Date at the Stock Purchase Price with the
Participant's net after-tax Profit Sharing Distribution for that fiscal year.
10. WRITTEN AGREEMENT
All rights to purchase Common Stock shall be set forth in writing and
shall express an offer by the Company to sell a number of shares of Common
Stock, not to exceed the maximum number provided in the preceding paragraph, on
the Purchase Date at the Stock Purchase Price.
11. RESTRICTIONS ON TRANSFER
Unless the Statement of Profit Sharing Distribution and Stock Purchase
Election Form provides otherwise, shares acquired pursuant to the terms of the
Plan for a Stock Purchase Price of less than 100% of the Fair Market Value of
the Common Stock on the Purchase Date shall be issued as "SPP Restricted Stock"
that may not be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of by the Participant for a period of one year, or such
shorter period as the Board may determine in its discretion (the "Restriction
Period"), and such other conditions as the Committee may provide.
Notwithstanding the foregoing, the Restriction Period for any Participant shall
be deemed to end and all restrictions on shares of SPP Restricted Stock shall
lapse upon (i) a Participant's death or (ii) a determination by the Committee
that the Participant has incurred a severe and unexpected financial hardship.
Also notwithstanding the foregoing, if a Participant terminates
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<PAGE> 4
employment with Alaska Airlines or Horizon for any reason other than death
before the expiration of the Restriction Period, the shares of SPP Restricted
Stock still subject to restriction shall not be forfeited by the Participant to
the Company but shall remain subject to restriction until the end of the
Restriction Period.
12. NOTICE OF ELECTION
A Participant shall elect to purchase shares under the Plan by providing
written notice to the Company on or before a date to be specified by the
Committee on a form provided by the Company for such purpose. Notice to the
Company of the election to purchase shares shall be irrevocable and shall
specify whether (a) all of the Participant's Profit Sharing Distribution shall
be used to purchase Common Stock; (b) all of the Participant's Profit Sharing
Distribution shall be paid in cash; or (c) how much of the Participant's Profit
Sharing Distribution shall be paid in cash before shares are purchased with the
remaining amount. The Company shall treat such notice by a Participant as a
binding commitment to allow the Company to withhold such Stock Purchase Price
(including any applicable withholdings) from the Participant's Profit Sharing
Distribution.
13. BROKERAGE ACCOUNT
The Company will open and maintain an individual securities account with
a brokerage firm for each Participant when the Participant makes his or her
first purchase, and will issue the Common Stock to be held in such account,
using the funds allocated from the Participant's Profit Sharing Distribution. A
Participant may not transfer such Common Stock out of the account until the
Restriction Period has terminated, except as provided in Section 11. Each
Participant will receive periodic statements from the brokerage firm on such
account. The Company will pay all fees associated with the Participants' stock
purchases under the Plan. Each Participant will be responsible for paying any
commissions and costs associated with any future sales of the Common Stock in
such account.
14. TERMINATION OF EMPLOYMENT
A Participant shall be ineligible to elect to purchase shares under the
Plan unless the Participant is an employee of Alaska Airlines or Horizon on the
applicable Purchase Date; provided, that the legal representative of a
Participant who has received a Profit Sharing Distribution but who dies after
the end of the fiscal year for which the Profit Sharing Distribution was granted
but before the Purchase Date, shall be entitled to elect to purchase shares
under the Plan in respect of such Profit Sharing Distribution on the Purchase
Date.
15. ACCELERATION AND SETTLEMENT OF AWARDS
The Committee shall have the discretion, exercisable at any time before
a sale, merger, consolidation, reorganization, liquidation or change in control
in the Company, as defined by the Committee, to provide for the termination of
the Restriction Period for any SPP Restricted Stock upon or immediately before
such event is effective. However, the granting of awards under the Plan shall in
no way affect the right of the Company to adjust, reclassify, reorganize,
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<PAGE> 5
or otherwise change its capital or business structure, or to merge, consolidate,
dissolve, liquidate, sell or transfer all or any portion of its businesses or
assets.
16. PLAN AMENDMENT
The Plan may be amended only by the Board as it deems necessary or
appropriate to better achieve the purposes of the Plan.
17. TAX WITHHOLDING
The Company shall have the right to deduct from any Profit Sharing
Distribution subject to the terms of this Plan, a sufficient amount to cover
withholding of any federal, state or local taxes required by law, or to take
such other action as may be necessary to satisfy any such withholding
obligations. The Company shall also have the right to withhold any such taxes
due on the difference between the Stock Purchase Price and the market value of
the Common Stock on the Purchase Date.
18. OTHER BENEFIT AND COMPENSATION PROGRAMS
Unless otherwise specifically determined by the Committee and not
inconsistent with the terms of any benefit plan, severance program or severance
pay law, settlements of awards received by Participants under the Plan shall not
be deemed a part of a Participant's regular, recurring compensation for purposes
of calculating payments or benefits from any Company benefit plan, severance
program or severance pay law. Further, the Company may adopt other compensation
programs, plans or arrangements as it deems appropriate or necessary.
20. REGULATORY APPROVALS
The implementation of the Plan and the issuance of shares upon the
election to purchase shares pursuant to the Plan shall be subject to the
Company's procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan or the shares issued pursuant to
it.
21. FUTURE RIGHTS
No person shall have any claim or rights to be entitled to purchase
shares under the Plan, and no Participant shall have any rights under the Plan
to be retained in the employ of Alaska Airlines, Horizon, the Company or any of
the Company's affiliates.
22. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of a Participant
including, without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.
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<PAGE> 1
EXHIBIT 99.2
ALASKA AIR GROUP, INC.
1997 NONOFFICER LONG-TERM INCENTIVE EQUITY PLAN
1. PURPOSE
The purpose of the Alaska Air Group, Inc. 1997 Nonofficer Long-Term Incentive
Equity Plan (the "Plan") is to promote the long-term profitability of Alaska Air
Group, Inc. (the "Company") and to enhance value for its stockholders by
offering incentives and rewards to selected employees of the Company, to retain
their services and to encourage them to acquire and maintain stock ownership in
the Company.
2. TERM
The Plan shall become effective upon its approval by the Company's Board of
Directors (the "Board") and shall terminate at the close of business on the
fifth anniversary of such approval date unless terminated earlier by the Board.
After termination of the Plan, no future awards may be granted but previously
granted awards shall remain outstanding in accordance with their applicable
terms and conditions and the terms and conditions of the Plan.
3. PLAN ADMINISTRATION
The Compensation Committee (the "Committee") of the Board shall be responsible
for administering the Plan. The members of the Committee shall be appointed by
the Board and shall consist of two or more members of the Board. The Committee
shall have full and exclusive power to interpret the Plan and to adopt such
rules, regulations and guidelines for carrying out the Plan as it may deem
necessary or proper, all of which power shall be executed in the best interests
of the Company and in keeping with the objectives of the Plan. This power
includes but is not limited to selecting award recipients, establishing all
award terms and conditions and adopting modifications, amendments and
procedures, as well as rules and regulations governing awards under the Plan,
and to make all other determinations necessary or advisable for the
administration of the Plan. The interpretation and construction of any provision
of the Plan or any option or right granted hereunder and all determinations by
the Committee in each case shall be final, binding and conclusive with respect
to all interested parties.
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4. ELIGIBILITY
Any employee of the Company who, at the time the award is granted, is not a
director or officer of the Company subject to Section 16 of the Securities
Exchange Act of 1934, as amended, shall be eligible to receive awards under the
Plan. "Employee" shall also include any former employee of the Company eligible
to receive an assumed or replacement award as contemplated in Sections 5 and 8,
and "Company" includes any entity that is directly or indirectly controlled by
the Company or any entity in which the Company has a significant equity
interest, as determined by the Committee.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 6 of the Plan, the aggregate number of
shares of Common Stock ($1.00 par value) of the Company ("shares") which may be
transferred to participants under the Plan shall be 250,000.
Shares subject to awards under the Plan which expire, terminate or are canceled
prior to exercise or, in the case of awards granted under Section 8(c), do not
vest shall thereafter be available for the granting of other awards. Shares
otherwise issuable pursuant to an award which have been exchanged by a
participant as full or partial payment to the Company in connection with any
award under the Plan also shall thereafter be available for the granting of
other awards. In instances where an SAR or other award is settled in cash, the
shares covered by such award shall remain available for the granting of other
awards. Likewise, the payment of cash dividends and dividend equivalents paid in
cash in conjunction with outstanding awards shall not be counted against the
shares available for issuance.
Any shares issued under the Plan may consist in whole or in part of authorized
and unissued shares or of treasury shares, and no fractional shares shall be
issued under the Plan. Cash may be paid in lieu of any fractional shares in
settlements of awards under the Plan.
6. ADJUSTMENTS AND REORGANIZATIONS
In the event of any stock dividend, stock split, combination or exchange of
shares, merger, consolidation, spin-off, recapitalization or other distribution
(other than normal cash dividends) of Company assets to stockholders, or any
other change affecting shares or share price, the Committee shall make a
proportionate adjustment with respect to: (a) the aggregate number of shares
that may be issued under the Plan; (b) each outstanding award made under the
Plan; and (c) the exercise price per share for any outstanding stock options,
SARs or similar awards under the Plan.
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7. FAIR MARKET VALUE
Fair Market Value for all purposes under the Plan shall mean the closing price
of a share of Common Stock as reported daily in The Wall Street Journal or
similar readily available public source for the date in question. If no sales of
shares were made on such date, the closing price of a share as reported for the
preceding day on which a sale of shares occurred shall be used.
8. AWARDS
The Committee shall determine the type or types of award(s) to be made to each
participant. Awards may be granted singly, in combination or in tandem. Awards
also may be made in combination or in tandem with, in replacement of, as
alternative to, or as the payment form for grants or rights under any other
compensation plan or individual contract or agreement of the Company including
those of any acquired entity. The types of awards that may be granted under the
Plan are:
(a) Stock Options - This is a grant of a right to purchase a specified
number of shares during a specified period as determined by the Committee. The
purchase price per share for each stock option shall be determined by the
Committee. The exercise price for a stock option shall be paid in full by the
optionee at the time of the exercise in cash or such other method permitted by
the Committee, including (i) tendering (either actually or by attestation)
shares, (ii) authorizing a third party to sell the shares (or a sufficient
portion thereof) acquired upon exercise of a stock option and assigning the
delivery to the Company of a sufficient amount of the sale proceeds to pay for
all the shares acquired through such exercise, or (iii) any combination of the
above.
(b) SARs - This is a right to receive a payment, in cash and/or shares,
equal to the excess of the Fair Market Value of a specified number of shares on
the date the SAR is exercised over the Fair Market Value on the date the SAR was
granted (except that if an SAR is granted retroactively in tandem with or in
substitution for a stock option, the designated Fair Market Value shall be no
lower than the exercise price per share for such tandem or replaced stock
option).
(c) Stock Awards - This is an award made or denominated in shares or units
equivalent in value to shares. All or part of any stock award may be subject to
conditions and restrictions established by the Committee which may be based on
continuous service with the Company or the achievement of performance goals
related to profits, profit growth, profit-related return ratios, cash flow or
shareholder returns, where such goals may be stated in absolute terms or
relative to comparison companies.
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9. DIVIDENDS AND DIVIDEND EQUIVALENTS
The Committee may provide that any awards under the Plan earn dividends or
dividend equivalents. Such dividends or dividend equivalents may be paid
currently or may be credited to a participant's account. Any crediting of
dividends or dividend equivalents may be subject to such restrictions and
conditions as the Committee may establish, including reinvestment in additional
shares or share equivalents.
10. DEFERRALS AND SETTLEMENTS
Payment of awards may be in the form of cash, stock, other awards or
combinations thereof as the Committee shall determine, and with such
restrictions as it may impose. The Committee also may require or permit
participants to elect to defer the issuance of shares or the settlement of
awards in cash under such rules and procedures as it may establish under the
Plan. It also may provide that deferred settlements include the payment or
crediting of interest on the deferral amounts, or the payment or crediting of
dividend equivalents where the deferral amounts are denominated in shares.
11. TRANSFERABILITY AND EXERCISABILITY
Awards granted under the Plan shall not be transferable or assignable other than
by will or the laws of descent and distribution, except to the extent permitted
by the Committee, in its sole discretion.. However, any award so transferred
shall continue to be subject to all the terms and conditions contained in the
instrument evidencing such award.
12. AWARD AGREEMENTS
Awards under the Plan shall be evidenced by agreements as approved by the
Committee that set forth the terms, conditions and limitations for each award
which may include the term of an award, the provisions applicable in the event
the participant's employment terminates, and the Committee's authority to
unilaterally or bilaterally amend, modify, suspend, cancel or rescind any award.
13. ACCELERATION AND SETTLEMENT OF AWARDS
The Committee shall have the discretion, exercisable at any time before a sale,
merger, consolidation, reorganization, liquidation or change in control in the
Company, as defined by the Committee, to provide for the acceleration of vesting
and for settlement, including cash payment, of an award granted under the Plan
upon or immediately before such event is effective. However, the granting of
awards under
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the Plan shall in no way affect the right of the Company to adjust, reclassify,
reorganize, or otherwise change its capital or business structure, or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any portion of its
businesses or assets.
14. PLAN AMENDMENT
The Plan may be amended only by the Board as it deems necessary or appropriate
to better achieve the purposes of the Plan.
15. TAX WITHHOLDING
The Company shall have the right to deduct from any settlement of an award made
under the Plan, including the delivery or vesting of shares, a sufficient amount
to cover withholding of any federal, state or local taxes required by law, or to
take such other action as may be necessary to satisfy any such withholding
obligations. The Committee may, in its discretion and subject to such rules as
it may adopt, permit participants to use shares to satisfy required tax
withholding, and such shares shall be valued at the Fair Market Value as of the
settlement date of the applicable award.
16. OTHER BENEFIT AND COMPENSATION PROGRAMS
Unless otherwise specifically determined by the Committee and not inconsistent
with the terms of any benefit plan, severance program or severance pay law,
settlements of awards received by participants under the Plan shall not be
deemed a part of a participant's regular, recurring compensation for purposes of
calculating payments or benefits from any Company benefit plan, severance
program or severance pay law. Further, the Company may adopt other compensation
programs, plans or arrangements as it deems appropriate or necessary.
17. UNFUNDED PLAN
Unless otherwise determined by the Board, the Plan shall be unfunded and shall
not create (or be construed to create) a trust or a separate fund or funds. The
Plan shall not establish any fiduciary relationship between the Company and any
participant or other person. To the extent any person holds any rights by virtue
of an award granted under the Plan, such rights (unless otherwise determined by
the Committee) shall be no greater than the rights of an unsecured general
creditor of the Company.
18. USE OF PROCEEDS
The cash proceeds received by the Company from the issuance of shares pursuant
to awards under the Plan shall constitute general funds of the Company.
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19. REGULATORY APPROVALS
The implementation of the Plan, the granting of any award under the Plan, and
the issuance of shares upon the exercise or settlement of any award shall be
subject to the Company's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the awards granted
under it or the shares issued pursuant to it.
20. FUTURE RIGHTS
No person shall have any claim or rights to be granted an award under the Plan,
and no participant shall have any rights under the Plan to be retained in the
employ of the Company.
21. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of a participant
including, without limitation, the estate of such participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the participant's creditors.
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