Alaska Airlines and Horizon Air 2009 Annual Report Download - page 29

PROPOSAL 4.
APPROVAL OF THE ALASKA AIR GROUP, INC. 2010 EMPLOYEE STOCK PURCHASE PLAN
Overview
At the Annual Meeting, stockholders are
being asked to approve the Alaska Air
Group, Inc. Employee Stock Purchase Plan
(the “ESPP”), which was adopted, subject to
stockholder approval, by the Board on
March 11, 2010.
Under the ESPP, shares of the Company’s
common stock will be available for purchase
by eligible employees who elect to
participate in the ESPP. Eligible employees
will be entitled to purchase, by means of
payroll deductions, limited amounts of the
Company’s common stock during periodic
Offering Periods. The ESPP will not be
effective without stockholder approval.
The Board believes that the ESPP will help
the Company retain and motivate eligible
employees and help further align the
interests of eligible employees with those of
the Company’s stockholders. The new ESPP
will replace our 2002 Employee Stock
Purchase Plan, which terminated at the end
of February 2010.
Summary Description of the ESPP
The principal terms of the ESPP are
summarized below. The following summary
is qualified in its entirety by the full text of
the ESPP, which is attached as Exhibit A to
this Proxy Statement.
Purpose
The purpose of the ESPP is to provide
eligible employees with an opportunity to
purchase shares of the Company’s common
stock at a favorable price and upon
favorable terms in consideration of the
participating employees’ continued services.
The ESPP is intended to provide an
additional incentive to participating eligible
employees to remain in the Company’s
employ and to advance the best interests of
the Company and its stockholders.
Operation of the ESPP
The ESPP will generally operate in
consecutive six-month periods referred to as
“Offering Periods,” also referred to as
“Purchase Periods.” The determination of the
duration of future Offering Periods and
Purchase Periods may be changed from time
to time. However, only one Offering Period
may be in effect at any one time, and an
Offering Period may not be shorter than three
months and may not be longer than 27
months. Although the ESPP gives us flexibility
to change the structure of future Offering
Periods and Purchase Periods, at present we
expect that the initial Offering Period will
commence on September 1, 2010 and the
next consecutive Offering Period to
commence on March 1, 2011. The Company
may change, if it so desires, the Offering
Periods and Purchase Periods in the future.
On the first day of each Offering Period
(referred to as the “Grant Date”), each
eligible employee who has timely filed a valid
election to participate in the ESPP for that
Offering Period will be granted an option to
purchase shares of the Company’s common
stock. A participant must designate in his or
her election the percentage of his or her
compensation to be withheld from his or her
pay during that Offering Period for the
purchase of stock under the ESPP. The
participant’s contributions under the ESPP
will be credited to a bookkeeping account in
his or her name. Subject to certain limits, a
participant generally may elect to terminate
(but may not otherwise increase or decrease)
his or her contributions to the ESPP during an
Offering Period. A participant generally may
ŠProxy
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