Alaska Airlines and Horizon Air 2007 Annual Report Download - page 74

PROPOSAL NO. 4
STOCKHOLDER PROPOSAL
Terry Dayton has given notice of his
intention to present a proposal at the 2008
Annual Meeting. Mr. Dayton’s address is 10510
E. 6th Avenue, Spokane, WA 99206, and
Mr. Dayton represents that he owns 807 shares
of the Company’s common stock. Mr. Dayton’s
proposal and supporting statement, as
submitted to the Company, appear below in
italics.
The Board of Directors opposes adoption of
Mr. Dayton’s proposal and asks stockholders to
review the Board’s response, which follows
Mr. Dayton’s proposal and supporting statement
below.
The affirmative vote of the holders of a
majority of the shares of common stock present,
in person or represented by proxy at the meeting,
and entitled to vote on the proposal is required
to approve this proposal.
Stockholder Proposal
CUMULATIVE VOTING
RESOLVED, that our board initiate in 2008
the appropriate process to amend our company’s
governance documents (certificate of
incorporation and/or bylaws) to ensure that
cumulative voting is permitted to elect director
nominees to the board. Cumulative voting means
that each shareholder may cast as many votes
as equal to number of share held, multiplied by
the number of directors to be elected. A
shareholder may cast all such cumulated votes
for a single candidate or split votes between
multiple candidates, as that shareholder sees
fit. Under cumulative voting shareholders can
withhold votes from certain nominees in order to
cast multiple votes for others.
Proposalist Terry Dayton, a Horizon Air
communications agent, has notified the Alaska
Air Group, Inc. (“AAG”) that he intends to present
the following proposal at the 2008 Annual
Meeting.
SUPPORTING STATEMENT
Cumulative voting won 54% support at Aetna
and 56% support at Alaska Airlines in 2005. It
also received 55% support at General Motors
(GM) in 2006. The Council of Institutional
Investors www.cii.org has recommended
adoption of this proposal topic. CalPERS also
recommended a yes-vote for proposals on this
topic.
Cumulative voting allows a significant group
of shareholders to elect a director of its choice
safeguarding minority shareholder interests and
bringing independent perspectives to Board
decisions. Most importantly cumulative voting
encourages management to maximize
shareholder value by making it easier for a
would-be acquirer materialize, however that very
possibility represents a powerful incentive for
improved management of our company.
This proposal is particularly important
because our company has underperformed its
peers over one-year, three-year, and five-year
periods. Additionally we still have plurality voting,
a partially staggered board and there is no
shareholder right to call a special meeting or act
by written consent.
Vote Yes on Proposal No. 4 for Cumulative
Voting
BOARD OF DIRECTORS’ RESPONSE TO STOCKHOLDER PROPOSAL 4
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE AGAINST PROPOSAL 4
FOR THE FOLLOWING REASONS:
The Board believes that directors should be
elected through a system that assures that
directors will represent the interests of all
stockholders, not just those of particular groups.
Currently all of our directors have been elected
by a majority of shares voted. Cumulative voting
could lead to factionalism by enabling individual
stockholders or groups of stockholders with less
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