Alaska Airlines and Horizon Air 2007 Annual Report Download - page 87

that would have been delivered had there been no such cash or other settlement shall not be
counted against the shares available for issuance under this Plan. In the event that shares of
Common Stock are delivered in respect of a dividend equivalent right granted under this Plan,
only the actual number of shares delivered with respect to the award shall be counted against
the share limits of this Plan. To the extent that shares of Common Stock are delivered
pursuant to the exercise of a stock appreciation right or stock option granted under this Plan,
the number of underlying shares as to which the exercise related shall be counted against the
applicable share limits under Section 4.2, as opposed to only counting the shares actually
issued. (For purposes of clarity, if a stock appreciation right relates to 100,000 shares and is
exercised at a time when the payment due to the participant is 15,000 shares, 100,000
shares shall be charged against the applicable share limits under Section 4.2 with respect to
such exercise.) Shares that are subject to or underlie awards granted under this Plan which
expire or for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other
reason are not paid or delivered under this Plan shall again be available for subsequent
awards under this Plan. Shares that are exchanged by a participant or withheld by the
Corporation as full or partial payment in connection with any award under this Plan, as well as
any shares exchanged by a participant or withheld by the Corporation or one of its Subsidiaries
to satisfy the tax withholding obligations related to any award, shall not be available for
subsequent awards under this Plan. Refer to Section 8.10 for application of the foregoing
share limits with respect to assumed awards. The foregoing adjustments to the share limits of
this Plan are subject to any applicable limitations under Section 162(m) of the Code with
respect to awards intended as performance-based compensation thereunder.
4.4 Reservation of Shares; No Fractional Shares; Minimum Issue. The Corporation shall at all
times reserve a number of shares of Common Stock sufficient to cover the Corporation’s
obligations and contingent obligations to deliver shares with respect to awards then
outstanding under this Plan (exclusive of any dividend equivalent obligations to the extent the
Corporation has the right to settle such rights in cash). No fractional shares shall be delivered
under this Plan. The Administrator may pay cash in lieu of any fractional shares in settlements
of awards under this Plan. No fewer than 100 shares may be purchased on exercise of any
award (or, in the case of stock appreciation or purchase rights, no fewer than 100 rights may
be exercised at any one time) unless the total number purchased or exercised is the total
number at the time available for purchase or exercise under the award.
5. AWARDS
5.1 Type and Form of Awards. The Administrator shall determine the type or types of award(s) to
be made to each selected Eligible Person. 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
alternatives to, or as the payment form for grants or rights under any other employee or
compensation plan of the Corporation or one of its Subsidiaries. The types of awards that may
be granted under this Plan are:
5.1.1 Stock Options. A stock option is the grant of a right to purchase a specified number of
shares of Common Stock during a specified period as determined by the Administrator. An
option may be intended as an incentive stock option within the meaning of Section 422 of the
Code (an “ISO”) or a nonqualified stock option (an option not intended to be an ISO). The
award agreement for an option will indicate if the option is intended as an ISO; otherwise it will
be deemed to be a nonqualified stock option. The maximum term of each option (ISO or
nonqualified) shall be ten (10) years. The per share exercise price for each option shall be not
less than 100% of the fair market value of a share of Common Stock on the date of grant of
the option. When an option is exercised, the exercise price for the shares to be purchased
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