Alaska Airlines and Horizon Air 2009 Annual Report Download - page 65

Description of Equity-Based Awards
Each of the equity-based awards reported in
the Grants of Plan-Based Awards Table was
granted under, and is subject to, the terms
of the 2008 Plan, which is administered by
the Compensation Committee. The
Committee has authority to interpret the
plan provisions and make all required
determinations under the plans. This
authority includes making required
proportionate adjustments to outstanding
awards upon the occurrence of certain
corporate events such as reorganizations,
mergers and stock splits, and making
provisions to ensure that any tax withholding
obligations incurred in respect of awards are
satisfied. Unless otherwise provided by the
Committee, awards granted under the plans
are generally only transferable to a
beneficiary of a Named Executive Officer
upon his death.
Options
Each option reported in Column (j) of the
table above was granted with a per-share
exercise price equal to the fair market value
of a share of our common stock on the grant
date. For these purposes, and in accordance
with the terms of the 2008 Plan and our
option grant practices, the fair market value
is equal to the closing price of a share of
our common stock on the applicable grant
date in Column (k).
Each option granted to the Named Executive
Officers in 2009 is subject to a four-year
vesting schedule, with 25% of the options
vesting on each of the first four
anniversaries of the grant date. Once
vested, each option will generally remain
exercisable until its normal expiration date.
Each of the options granted to the Named
Executive Officers in 2009 has a term of ten
years. If a Named Executive Officer’s
employment terminates for any reason other
than due to his death, disability or
retirement, the unvested portion of the
options will immediately terminate. If the
Named Executive Officer’s employment is
terminated as a result of the officer’s death
or disability, the options will immediately
vest and become exercisable. If the Named
Executive Officer’s employment is
terminated as a result of the officer’s
retirement, the options, other than
Mr. Ayer’s retention awards, will continue to
vest and become exercisable over the three-
year period following the retirement date
(subject to earlier termination at the end of
the option’s stated term). For these
purposes, “retirement” generally means a
termination of employment on or after
attaining age 60, attaining age 55 with at
least five years of service with the Company,
or becoming entitled to commence benefits
under a Company-sponsored defined benefit
plan in which the officer participates (with at
least 10 years service). Unless otherwise
provided by the Board of Directors, if there
is a change in control of the Company, the
options will generally become fully vested
and exercisable.
The options granted to Named Executive
Officers during 2009 do not include any
dividend rights.
Restricted Stock Units
Column (i) of the table above reports awards
of restricted stock units granted to the
Named Executive Officers for 2009. Each
restricted stock unit represents a
contractual right upon vesting to receive one
share of our common stock. Restricted
stock units granted to the Named Executive
Officers for 2009 will vest in one installment
on the third anniversary of the grant date,
provided that the officer continues to be
employed with the Company through that
date. However, the restricted stock units will
become fully vested if the Named Executive
Officer’s employment terminates due to the
officer’s death or disability. If the Named
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