Alaska Airlines and Horizon Air 2009 Annual Report Download - page 182
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number of PSUs that will ultimately vest, the
Company did not record any expense in 2009,
recorded a credit of $0.4 million in 2008, and
recorded compensation expense of $0.4 million
during 2007.
Deferred Stock Awards
In 2009, the Company awarded 12,704 Deferred
Stock Unit awards (DSUs) to members of its
Board of Directors as part of their retainers. The
underlying common shares are issued upon
retirement from the Board, but require no future
service period. As a result, the entire intrinsic
value of the awards on the date of grant was
expensed in 2009. The total amount of
compensation expense recorded in both 2009
and 2008 was $0.3 million.
Employee Stock Purchase Plan
The Company sponsors an ESPP, which qualifies
under Section 423 of the Internal Revenue Code.
Under the terms of the ESPP, employees can
purchase Company common stock at 85% of the
closing market price on the first day of the
offering period or the quarterly purchase date,
whichever is lower. Because of these attributes,
the ESPP is considered compensatory under
accounting standards and as such,
compensation cost is recognized. Compensation
cost for the Company’s ESPP was $1.5 million in
2009 and $1.6 million in both 2008 and 2007.
The grant date fair value is calculated using the
Black-Scholes model in the same manner as the
Company’s option awards for 85% of the share
award plus the intrinsic value of the 15%
discount. Proceeds received from the issuance
of shares are credited to stockholders’ equity in
the period in which the shares are issued. In
2009 and 2008, 184,488 shares and 169,242
shares, respectively, were purchased by
Company employees under the ESPP, resulting in
cash proceeds of $3.1 million and $3.2 million,
respectively.
Summary of Stock-Based Compensation
The table below summarizes the components of
total stock-based compensation for the years
ended December 31, 2009, 2008 and 2007:
(in millions) 2009 2008 2007
Stock options ............... $ 4.3 $ 5.1 $ 4.7
Restricted stock units ........ 5.8 6.8 5.6
Performance share units ...... —(0.4) 0.4
Deferred stock awards ........ 0.3 0.3 —
Employee stock purchase
plan ..................... 1.5 1.6 1.6
Total stock-based
compensation ............. $11.9 $13.4 $12.3
86