Alaska Airlines and Horizon Air 2012 Annual Report Download - page 83

EXECUTIVE COMPENSATION
Change in Control
Cash
Severance(1)
Enhanced
Retirement
Benefit(2)
Benefit
Continuation(3)
Lifetime
Airfare
Benefit(4)
Equity
Acceleration(5)
Excise Tax
Gross-Up(6) Total
Bradley D. Tilden $2,926,589 $442,020 $262,512 $24,191 $5,211,065 $ 0 $8,866,377
Brandon S. Pedersen $1,676,071 $151,858 $179,922 $ 0 $1,113,887 $827,727 $3,949,465
Keith Loveless $2,009,414 $321,425 $175,712 $13,789 $1,680,560 $ 0 $4,200,900
Glenn S. Johnson $2,120,978 $431,125 $174,205 $11,292 $2,680,024 $ 0 $5,417,624
Benito Minicucci $2,035,490 $183,276 $158,179 $ 0 $2,693,690 $ 0 $5,070,635
William S. Ayer $2,532,591 $181,554 $130,832 $16,467 $6,837,977 $ 0 $9,699,421
(1) Represents the amount obtained by multiplying three by the sum of the executive’s highest rate of base salary
during the preceding 12 months and the higher of the executive’s target incentive or his average incentive for
the three preceding years.
(2) Represents the sum of (a) except in the case of Mr. Pedersen and Mr. Minicucci, the actuarial equivalent of an
additional three years of age and service credit under our qualified and non-qualified retirement plan using the
executive’s highest rate of salary during the preceding 12 months prior to a change in control, (b) except in the
case of Mr. Pedersen and Mr. Minicucci, the present value of the accrued but unvested portion of the non-
qualified retirement benefits that would vest upon a change of control, (c) the matching contribution the
executive would have received under our qualified defined-contribution plan had the executive continued to
contribute the maximum allowable amount during the employment period, and (d) in the case of Mr. Pedersen
and Mr. Minicucci, the contribution the executive would have received under our nonqualified defined-
contribution plan had the executive continued to participate in the plan during the employment period.
(3) Represents the estimated cost of (a) 18 months of premiums under our medical, dental and vision programs,
and (b) three years of continued participation in life, disability, accidental death insurance and other fringe
benefit programs.
(4) All employees who retire with more than ten years of service are entitled to flight benefits on Alaska Airlines
and Horizon Air. Flight benefits for the Named Executive Officers are for positive-space travel, for which the
Company also provides a tax reimbursement. Messrs. Tilden, Loveless, Johnson, and Ayer qualify for these
benefits under all termination scenarios. In this column, we show the present value of this benefit, calculated
using a discount rate and mortality table that are the same as those used for our pension plan accounting
under ASC 715-20 as of December 31, 2012, described above in the section titled “Pension and Other
Retirement Benefits.” Other assumptions include that the lifetime average annual usage is equal to actual
average annual usage amounts in 2010 through 2012, and that the annual value of the benefit is equal to the
annual incremental cost to the Company, which will be the same as the average of the incremental cost
incurred to provide air travel benefits to the executive in those years as disclosed under “
All Other
Compensation
” in the Summary Compensation Table.
(5) Represents the “in-the-money” value of unvested stock options and the face value of unvested restricted stock
and performance stock unit awards that would vest upon termination of employment in the circumstances
described above based on a stock price of $43.09. The value of the extended term of the options is not
reflected in the table because we have assumed that the executive’s outstanding stock options would be
assumed by the acquiring company pursuant to a change in control.
(6) In February 2013, the Committee amended its change-in-control agreements to eliminate provisions that could
have resulted in a reimbursement for Section 280G excise taxes.
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