Alaska Airlines and Horizon Air 2009 Annual Report Download - page 70

(1) The years of credited service and present value of accumulated benefits shown in the table above are
presented as of December 31, 2009 assuming that each Named Executive Officer retires at normal retirement
age and that benefits are paid out in accordance with the terms of each plan described below. For a
description of the material assumptions used to calculate the present value of accumulated benefits shown
above, please see Note 8 (Employee Benefits Plans) to the Company’s Consolidated Financial Statements,
included as part of the Company’s 2009 Annual Report filed on Form 10-K with the SEC and incorporated
herein by reference.
(2) In lieu of participation in the defined-benefit plans, Mr. Minicucci receives an enhanced contribution to the
Company’s defined-contribution plans. Specifically, in lieu of participation in the qualified defined-benefit
pension plan, Mr. Minicucci receives a Company match contribution up to 6% of his eligible wages. In lieu of
the Supplementary Retirement defined-benefit plan, Mr. Minicucci participates in the Supplementary
Retirement defined-contribution plan, which is further described below.
Salaried Retirement Plan
The Salaried Retirement Plan is a
tax-qualified, defined-benefit retirement plan
for salaried Alaska Airlines employees hired
prior to April 1, 2003. Each of the Named
Executive Officers that participates in the
Plan is fully vested in his accrued benefits
under the Salaried Retirement Plan. Benefits
payable under the Salaried Retirement Plan
are generally based on years of credited
service with the Company and its affiliates
and final average base salary for the five
highest complete and consecutive calendar
years of an employee’s last ten complete
calendar years of service. The annual
retirement benefit at age 62 (normal
retirement age under the Salaried
Retirement Plan) is equal to 2% of the
employee’s final average base salary times
years of credited service (limited to 40
years). Annual benefits are computed on a
straight life annuity basis beginning at
normal retirement age. Benefits under the
Salaried Retirement Plan are not subject to
offset for Social Security benefits.
The tax law limits the compensation on
which annual retirement benefits are based.
For 2009, this limit was $245,000. The tax
law also limits the annual benefits that may
be paid from a tax-qualified retirement plan.
For 2009, this limit on annual benefits was
$195,000.
Supplementary Retirement Plans
In addition to the benefits described above,
the Named Executive Officers, other than
Mr. Minicucci, are eligible to receive
retirement benefits under the Supplementary
Retirement defined-benefit plan. This plan is
a non-qualified, unfunded, defined-benefit
plan. Normal retirement benefits are payable
once the officer reaches age 60. Benefits are
calculated as a monthly amount on a straight
life annuity basis. In general, the monthly
benefit is determined as a percentage
(between 50% to 75% of a participant’s final
average monthly base salary) with the
percentage determined based on both the
officer’s length of service with the Company
and length of service as an elected officer.
This benefit amount is subject to offset by
the amount of the officer’s Social Security
benefits and the amount of benefits paid
under the Salaried Retirement defined-benefit
plan to the extent such benefits were
accrued after the officer became a participant
in the Supplementary Retirement defined-
benefit plan. (There is no offset for any
Salaried Retirement Plan benefits accrued for
service before the officer became a
participant in the Supplementary Retirement
defined-benefit plan.)
Participants in the Supplementary
Retirement defined-benefit plan become fully
vested in their benefits under the plan upon
attaining age 50 and completing 10 years of
service as an elected officer. Plan benefits
will also become fully vested upon a change
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