<PAGE>
As filed with the Securities and Exchange Commission on September 22, 1999
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)
<TABLE>
<S> <C>
Delaware 91-1292054
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
19300 Pacific Highway South
Seattle, Washington 98188
(Address of principal executive offices, including zip code)
ALASKA AIR GROUP, INC. 1999 LONG-TERM INCENTIVE EQUITY PLAN
ALASKA AIR GROUP, INC. 1997 LONG-TERM INCENTIVE EQUITY PLAN
(Full title of the plans)
KEITH LOVELESS
Corporate Secretary and Associate General Counsel
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 Cole LLP
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Securities Number to Be Proposed Maximum Proposed Maximum Amount of
to Be Registered Registered(1) Offering Price Per Share(2) Aggregate Offering Registration Fee
Price(2)
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<S> <C> <C> <C> <C>
Common Stock, $1.00 par value per share (3),
under the:
- ------------------------------------------------------------------------------------------------------------------------------------
Alaska Air Group, Inc. 1999 Long-Term 1,200,000 $40.60 $48,720,000.00 $13,544.16
Incentive Equity Plan
- ------------------------------------------------------------------------------------------------------------------------------------
Alaska Air Group, Inc. 1997 Long-Term 250,000 $40.60 $10,150,000.00 $ 2,821.70
Incentive Equity Plan
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,450,000 $40.60 $58,870,000.00 $16,366.00
====================================================================================================================================
</TABLE>
(1) Includes an indeterminate number of additional shares that may be necessary
to adjust the number of shares reserved for issuance pursuant to the
employee benefit plans as the result of any future stock split, stock
dividend, 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.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended. The
price per share is estimated to be $40.60, based on the average of the high
($41.44) and low ($39.75) sales prices for the Registrant's
Common Stock as reported on The New York Stock Exchange on September 20,
1999.
(3) Includes rights to purchase Series A Participating Preferred Stock
associated with the Common Stock.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K and Form 10-K/A
for the year ended December 31, 1998, filed on February 11, 1999 and June 2,
1999, respectively, 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 and Form 10-K/A referred to in (a)
above;
(c) The description of the Registrant's Common Stock contained
in the Registration Statement on Form 8-A filed on September 19, 1985, under
Section 12(b) of the Exchange Act, including any amendments or reports filed for
the purpose of updating such description; and
(d) The description of certain rights to purchase Series A
Participating Preferred Stock contained in the Registration Statement on Form
8-A filed on December 11, 1986, under Section 12(b) of the Exchange Act,
including any amendments or reports filed for the purpose of updating such
description.
All documents 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 which indicates that the securities offered hereby
have been sold or which 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
dates on which such documents are filed.
Item 4. DESCRIPTION OF SECURITIES
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
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 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.
II-1
<PAGE>
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 Restated 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 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
---------- --------------------------------------------------------------
<S> <C>
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie LLP (included in its opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Alaska Air Group, Inc. 1999 Long-Term Incentive Equity Plan
99.2 Alaska Air Group, Inc. 1997 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;
II-2
<PAGE>
(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 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 which 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 benefit 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 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 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.
II-3
<PAGE>
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
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 20th day of
September, 1999.
ALASKA AIR GROUP, INC.
/s/ JOHN F. KELLY
----------------------------
By: John F. Kelly
Chairman of the Board, Chief Executive
Officer and President
POWER OF ATTORNEY
Each person whose signature appears below authorizes John F. Kelly and
Harry G. Lehr, or either of them, as attorneys-in-fact with full power of
substitution, to execute in the name and on the behalf of each person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on the 20th day of September, 1999.
<TABLE>
<S> <C>
/s/ JOHN F. KELLY /s/ R. MARC LANGLAND
- -------------------------------------------------------------- ---------------------------------------------
John F. Kelly R. Marc Langland
Chairman of the Board, Chief Executive Officer and President Director
(Principal Executive Officer)
/s/ HARRY G. LEHR /s/ BYRON I. MALLOT
- -------------------------------------------------------------- ---------------------------------------------
Harry G. Lehr Byron I. Mallott
Senior Vice President/Finance Director
(Principal Financial and Accounting Officer)
/s/ BRADLEY D. TILDEN /s/ JOHN V. RINDLAUB
- -------------------------------------------------------------- ---------------------------------------------
Bradley D. Tilden John V. Rindlaub
Controller Director
/s/ WILLIAM S. AYER /s/ PATRICIA Q. STONESIFER
- -------------------------------------------------------------- ---------------------------------------------
William S. Ayer Patricia Q. Stonesifer
Director Director
/s/ RONALD F. COSGRAVE /s/ RICHARD A. WIEN
- -------------------------------------------------------------- ---------------------------------------------
Ronald F. Cosgrave Richard A. Wien
Director Director
/s/ MARY JANE FATE
- --------------------------------------------------------------
Mary Jane Fate
Director
/s/ BRUCE R. KENNEDY
- --------------------------------------------------------------
Bruce R. Kennedy
Director
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- -------------- ---------------------------------------------------------------
5.1 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie LLP (included in its opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 Alaska Air Group, Inc. 1999 Long-Term Incentive Equity Plan
99.2 Alaska Air Group, Inc. 1997 Long-Term Incentive Equity Plan
<PAGE>
EXHIBIT 5.1
Perkins Coie LLP
A Law Partnership Including Professional Corporations
1201 Third Avenue, 40th Floor, Seattle, Washington 98101-3099
Telephone: 206 583-8888 Facsimile: 206 583-8500
September 20, 1999
Alaska Air Group, Inc.
19300 Pacific Highway South
Seattle, Washington 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 Alaska Air Group, Inc. (the "Company") 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 the Company is filing with the Securities and Exchange Commission
with respect to up to 1,450,000 shares of Common Stock, $1.00 par value per
share (the "Shares"), which may be issued as follows: up to 1,200,000 Shares
under the Alaska Air Group, Inc. 1999 Long-Term Incentive Equity Plan and up to
250,000 Shares under the Alaska Air Group, Inc. 1997 Long-Term Incentive Equity
Plan (collectively, the "Plans").
We have examined the Registration Statement and such documents and records
of the Company and other documents as we have deemed relevant and 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 on and subject to the foregoing, we are of the opinion that any
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, the 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,
/s/ PERKINS COIE LLP
<PAGE>
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
25, 1999, included in Alaska Air Group, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 1998, and to all references to our Firm included in
this registration statement.
/s/ ARTHUR ANDERSEN LLP
Seattle, Washington
September 20, 1999
<PAGE>
EXHIBIT 99.1
ALASKA AIR GROUP, INC.
1999 LONG-TERM INCENTIVE EQUITY PLAN
1. Purpose
The purpose of the Alaska Air Group, Inc. 1999 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 key employees and officers 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
stockholders and shall terminate at the close of business on the fifth
anniversary of such approval date unless terminated earlier by the Board (as
defined in Section 3). 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 of Directors of
the Company (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 nonemployee members of the Board who are intended to qualify to
administer the Plan as contemplated by (a) Rule 16b-3 under the Securities and
Exchange Act of 1934 (the "Exchange Act") or any successor rules, and (b)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
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. In no event, however, shall the Committee have the
power to cancel outstanding stock options or stock appreciation rights ("SARs")
for the purpose of replacing or re-granting such options or SARs with a purchase
price that is less than the purchase price of the original option or SAR. 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.
4. Eligibility
Any employee of the Company 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, as determined by the Committee, except that with respect to
incentive stock options ("ISOs") intended to comply with Section 422 of the
Code, "Company" includes only any parent or subsidiary of the Company in
accordance with Section 422 of the Code.
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<PAGE>
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 1,200,000. The aggregate
number of shares that may be issued under awards pursuant to Section 8(c) of the
Plan shall not exceed 600,000 shares. No more than 120,000 shares may be issued
pursuant to Section 8(c) of the Plan as stock awards subject to restrictions
based solely on continuous employment of less than three (3) years. The
aggregate number of shares that may be covered by awards granted to any single
individual under the Plan shall not exceed 600,000 shares for any consecutive
three-year period, such limitation to be applied in a manner consistent with the
requirements of, and only to the extent required for compliance with, the
exclusion from the limitation on deductibility of compensation under Section
162(m) of the Code. The aggregate number of shares that may be represented by
ISOs shall not exceed 1,200,000.
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.
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 not less
than 100% of Fair Market Value on the date of grant (except if a stock option is
granted retroactively in tandem with or as a substitution for an SAR, the
exercise price may be no lower than the exercise
-2-
<PAGE>
price per share for such tandem or replaced SAR). A stock option may be in the
form of an ISO which, in addition to being subject to applicable terms,
conditions and limitations established by the Committee, complies with Section
422 of the Code. 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.
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, and, with respect to ISOs,
by Section 422 of the Code. However, any award so transferred shall continue to
be subject to all the terms and conditions contained in the instrument
evidencing such award.
12. Evidence of Awards
Awards under the Plan shall be evidenced by instruments as approved by the
Committee that set forth the terms, conditions and limitations for each award
which may include the term of an award (except that in no event shall the term
of any ISO exceed a period of ten years from the date of its grant), 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.
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<PAGE>
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 of
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 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, except that no such
amendment shall be made without the approval of the Company's stockholders which
would increase the number of shares available for issuance in accordance with
Sections 5 and 6 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.
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.
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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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EXHIBIT 99.2
ALASKA AIR GROUP, INC.
1997 LONG-TERM INCENTIVE EQUITY PLAN
("MIRROR PLAN")
1. Purpose
The purpose of the Alaska Air Group, Inc. 1997 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.
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 500,000.
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
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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.
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
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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.
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 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
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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.
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.
_______________________________
On May 24, 1999, the Board of Directors amended the Plan to increase the
aggregate number of shares that may be granted to 500,000.
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