Alaska Airlines and Horizon Air 2009 Annual Report Download - page 181

options and the expected forfeiture rates are
based on historical experience for various
homogenous employee groups.
The Company recorded stock-based
compensation expense related to stock options
of $4.3 million, $5.1 million, and $4.7 million in
2009, 2008, and 2007, respectively. The total
intrinsic value of options exercised during 2009
was $1.6 million. Cash received by the Company
from option exercises during 2009 totaled $8.3
million. A total of 295,399 options vested during
2009 with an aggregate fair value of $4.4
million. As of December 31, 2009, $4.4 million
of compensation cost associated with unvested
stock option awards attributable to future service
had not yet been recognized. This amount will be
recognized as expense over a weighted-average
period of 2.2 years.
The following table summarizes stock options
outstanding and exercisable at December 31,
2009 with their weighted-average exercise prices
and remaining contractual lives:
Range of
Exercise prices
Remaining
Life
(years) Shares
Price
Per
Share
Outstanding:
$10to$20.......... 5.0 210,739 $18.86
$21to$28.......... 6.1 1,160,629 26.99
$29to$34.......... 2.9 584,175 31.98
$35to$45.......... 5.7 363,280 39.96
Options outstanding . . . 5.2 2,318,823 $29.54
Range of Exercise prices Shares
Price
Per
Share
Exercisable:
$10to$20 ................... 143,700 $18.70
$21to$28 ................... 550,553 26.51
$29to$34 ................... 582,256 31.98
$35to$45 ................... 244,947 39.57
Options exercisable ............ 1,521,456 $29.97
Restricted Stock Awards
The Company has restricted stock units (RSUs)
outstanding under the 2004 and 2008 Long-term
Incentive Equity Plans. As of December 31,
2009, 1,125,791 total RSUs have been granted
under these plans. The RSUs are non-voting and
are not eligible for dividends. The fair value of
the RSU awards is based on the closing price of
the Company’s common stock on the date of
grant. Compensation cost for RSUs is generally
recognized over the shorter of three years from
the date of grant as the awards “cliff vest” after
three years, or the period from the date of grant
to the employee’s retirement eligibility. The
Company recorded stock-based compensation
expense related to RSUs of $5.8 million, $6.8
million, and $5.6 million in 2009, 2008, and
2007, respectively. These amounts are included
in wages and benefits in the consolidated
statements of operations.
The following table summarizes information
about outstanding RSUs:
Number
of Units
Weighted-
Average
Grant
Date Fair
Value
Non-vested at December 31,
2008 ..................... 501,658 $28.14
Granted ..................... 253,293 27.19
Vested ..................... (132,415) 35.17
Forfeited .................... (19,842) 27.72
Non-vested at December 31,
2009 ..................... 602,694 $26.21
As of December 31, 2009, $5.3 million of
compensation cost associated with unvested
restricted stock awards attributable to future
service had not yet been recognized. This
amount will be recognized as expense over a
weighted-average period of 1.8 years.
Performance Stock Awards
During the first quarters of 2008 and 2007, the
Company awarded Performance Share Unit
awards (PSUs) to certain executives. PSUs are
similar to RSUs, but vesting is based on a
performance condition tied to the Company
achieving a specified pretax margin over a three-
year period. The PSU plan allows a portion of the
PSUs to vest even if the specified pretax margin
falls below the target but above the minimum
threshold, and additional shares to be granted if
the margin target is exceeded, subject to a
maximum. The Company intends to regularly
review its assumptions about meeting the
performance goal and expected vesting, and to
adjust the related compensation expense
accordingly. Based on expectations of the
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ŠForm 10-K