Alaska Airlines and Horizon Air 2007 Annual Report Download - page 93

who does not continue as an Eligible Person in respect of the Corporation or another
Subsidiary that continues as such after giving effect to the transaction or other event giving
rise to the change in status.
7. ADJUSTMENTS; ACCELERATION
7.1 Adjustments. Subject to Section 7.2, upon (or, as may be necessary to effect the adjustment,
immediately prior to): any reclassification, recapitalization, stock split (including a stock split in
the form of a stock dividend) or reverse stock split; any merger, combination, consolidation, or
other reorganization; any spin-off, split-up, or similar extraordinary dividend distribution in
respect of the Common Stock; or any exchange of Common Stock or other securities of the
Corporation, or any similar, unusual or extraordinary corporate transaction in respect of the
Common Stock; then the Administrator shall equitably and proportionately adjust (1) the
number and type of shares of Common Stock (or other securities) that thereafter may be made
the subject of awards (including the specific share limits, maximums and numbers of shares
set forth elsewhere in this Plan), (2) the number, amount and type of shares of Common Stock
(or other securities or property) subject to any outstanding awards, (3) the grant, purchase, or
exercise price (which term includes the base price of any SAR or similar right) of any
outstanding awards, and/or (4) the securities, cash or other property deliverable upon exercise
or payment of any outstanding awards, in each case to the extent necessary to preserve (but
not increase) the level of incentives intended by this Plan and the then-outstanding awards.
Unless otherwise expressly provided in the applicable award agreement, upon (or, as may be
necessary to effect the adjustment, immediately prior to) any event or transaction described in
the preceding paragraph or a sale of all or substantially all of the business or assets of the
Corporation as an entirety, the Administrator shall equitably and proportionately adjust the
performance standards applicable to any then-outstanding performance-based awards to the
extent necessary to preserve (but not increase) the level of incentives intended by this Plan
and the then-outstanding performance-based awards.
It is intended that, if possible, any adjustments contemplated by the preceding two paragraphs
be made in a manner that satisfies applicable U.S. legal, tax (including, without limitation and
as applicable in the circumstances, Section 424 of the Code, Section 409A of the Code and
Section 162(m) of the Code) and accounting (so as to not trigger any charge to earnings with
respect to such adjustment) requirements.
Without limiting the generality of Section 3.3, any good faith determination by the
Administrator as to whether an adjustment is required in the circumstances pursuant to this
Section 7.1, and the extent and nature of any such adjustment, shall be conclusive and
binding on all persons.
7.2 Corporate Transactions—Assumption and Termination of Awards. Upon the occurrence of any
of the following: any merger, combination, consolidation, or other reorganization; any exchange
of Common Stock or other securities of the Corporation; a sale of all or substantially all the
business, stock or assets of the Corporation; a dissolution of the Corporation; or any other
event in which the Corporation does not survive (or does not survive as a public company in
respect of its Common Stock); then the Administrator may make provision for a cash payment
in settlement of, or for the assumption, substitution or exchange of any or all outstanding
share-based awards or the cash, securities or property deliverable to the holder of any or all
outstanding share-based awards, based upon, to the extent relevant under the circumstances,
the distribution or consideration payable to holders of the Common Stock upon or in respect of
such event. Upon the occurrence of any event described in the preceding sentence, then,
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