Alaska Airlines and Horizon Air 2009 Annual Report Download - page 30

elect to increase, decrease or terminate his
or her contributions to the ESPP effective
with the first Purchase Period that
commences after the election is received.
Amounts contributed to the ESPP constitute
general corporate assets of the Company and
may be used for any corporate purpose.
Each option granted under the ESPP will
automatically be exercised on the last day of
each Purchase Period that occurs during the
Offering Period with respect to which it was
granted (referred to as the “Purchase Date”).
The number of shares acquired by a
participant upon exercise of his or her option
will be determined by dividing the
participant’s ESPP account balance as of the
applicable Purchase Date by the “Option
Price” for that Purchase Period. The
determination of the Option Price for a
Purchase Period may be changed from time
to time, except that in no event may the
Option Price for a Purchase Period be lower
than the lesser of (i) 85% of the fair market
value of a share of the Company’s common
stock on the applicable Grant Date, or
(ii) 85% of the fair market value of a share of
the Company’s common stock on the
applicable Purchase Date. Although the ESPP
gives us flexibility to change the method for
setting the Option Price, we initially expect to
set the Option Price under the ESPP using
the formula described above. We may
change, if we desire, the method for
establishing the Option Price in the future
provided that any change we make is
permitted by the ESPP and will not take effect
until the next Purchase Period after the
change. A participant’s ESPP account will be
reduced upon exercise of his or her option by
the amount used to pay the Option Price of
the shares acquired by the participant. No
interest will be paid to any participant or
credited to any account under the ESPP.
Eligibility
Only certain employees will be eligible to
participate in the ESPP. To be eligible to
participate in an Offering Period, on the
Grant Date of that period an individual must:
• have completed at least six months of
continuous employment with the
Company or one of its subsidiaries that
has been designated as a participating
subsidiary; and
• be customarily employed for more than
five months per calendar year.
As of March 1, 2010, approximately 13,700
employees of the Company and its
subsidiaries, including all of our named
executive officers, were eligible to
participate in the ESPP.
Limits on Authorized Shares; Limits on
Contributions
If stockholders approve the ESPP, a
maximum of 2,000,000 shares of our
common stock may be purchased under the
ESPP. Participation in the ESPP is also
subject to the following limits:
• A participant cannot contribute less
than 1% or more than 10% of his or her
compensation to the purchase of stock
under the ESPP in any one payroll
period.
• A participant cannot purchase more
than 2,000 shares of the Company’s
common stock under the ESPP with
respect to any one Offering Period.
• A participant cannot purchase more
than $25,000 of stock (valued at the
start of the applicable Offering Period
and without giving effect to any discount
reflected in the purchase price for the
stock) under the ESPP in any one
calendar year.
• A participant will not be granted an
option under the ESPP if it would cause
the participant to own stock and/or
hold outstanding options to purchase
stock representing 5% or more of the
total combined voting power or value of
14