Alaska Airlines and Horizon Air 2010 Annual Report Download - page 197

options and the expected forfeiture rates are
based on historical experience for various
homogenous employee groups.
The Company recorded stock-based
compensation expense related to stock options
of $4.0 million, $4.3 million, and $5.1 million in
2010, 2009, and 2008, respectively. The total
intrinsic value of options exercised during 2010
was $22.8 million. Cash received by the
Company from option exercises during 2010
totaled $37.4 million. A total of 263,525 options
vested during 2010 with an aggregate fair value
of $3.9 million. As of December 31, 2010, $2.6
million of compensation cost associated with
unvested stock option awards attributable to
future service had not yet been recognized. This
amount will be recognized as expense over a
weighted-average period of 1.8 years.
The following table summarizes stock options
outstanding and exercisable at
December 31, 2010 with their weighted-average
exercise prices and remaining contractual lives:
Range of Exercise
prices
Remaining
Life
(years) Shares
Price
Per
Share
Outstanding:
$10to$20 ...... 6.4 61,383 $19.05
$21to$28 ...... 6.6 638,234 27.31
$29to$34 ...... 6.7 248,205 32.67
$35to$45 ...... 5.5 198,698 40.24
Options
outstanding .... 6.4 1,146,520 $30.27
Range of Exercise prices Shares
Price
Per
Share
Exercisable:
$10to$20................ 19,191 $18.82
$21to$28................ 198,104 27.02
$29to$34................ 121,150 32.06
$35to$45................ 168,567 39.78
Options exercisable ......... 507,012 $32.16
Restricted Stock Awards
The Company has restricted stock units (RSUs)
outstanding under the 2004 and 2008 Long-term
Incentive Equity Plans. As of December 31,
2010, 1,301,985 total RSUs have been granted
under these plans. The RSUs are non-voting and
are not eligible for dividends. The fair value of
the RSU awards is based on the closing price of
the Company’s common stock on the date of
grant. Compensation cost for RSUs is generally
recognized over the shorter of three years from
the date of grant as the awards “cliff vest” after
three years, or the period from the date of grant
to the employee’s retirement eligibility. The
Company recorded stock-based compensation
expense related to RSUs of $6.2 million, $5.8
million, and $6.8 million in 2010, 2009, and
2008, respectively. These amounts are included
in wages and benefits in the consolidated
statements of operations.
The following table summarizes information
about outstanding RSUs:
Number of
Units
Weighted-
Average
Grant
Date Fair
Value
Non-vested at December 31,
2009 ................. 602,694 $26.21
Granted ................. 176,194 37.75
Vested .................. (84,069) 34.73
Forfeited ................ (33,195) 25.07
Non-vested at December 31,
2010 ................. 661,624 $28.27
As of December 31, 2010, $5.0 million of
compensation cost associated with unvested
restricted stock awards attributable to future
service had not yet been recognized. This
amount will be recognized as expense over a
weighted-average period of 1.7 years.
Performance Stock Awards
From time to time, the Company issues
Performance Share Unit awards (PSUs) to certain
executives. PSUs are similar to RSUs, but
vesting is based on performance or market
conditions.
Currently outstanding PSUs were granted in
2008 and in 2010. There are several tranches of
PSUs that vest based on differing performance
conditions including achieving a specified pretax
margin, a market condition tied to the
Company’s total shareholder return relative to an
airline peer group, and based on certain
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ŠForm 10-K