Alaska Airlines and Horizon Air 2014 Annual Report Download - page 79

Loveless qualify for these benefits under all termination scenarios. In this column, we show the present value
of this benefit, calculated using a discount rate equal to 120% of the long-term AFR (Applicable Federal Rate)
for December 2014 and Internal Revenue Code Section 401(e) mortality tables for 2015, described above in
the Pension and Other Retirement Benefits section above. Other assumptions include that the lifetime
average annual usage is equal to actual average annual usage amounts in 2012 through 2014, 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 the All Other Compensation column in the Summary Compensation Table. Messrs.
Johnson and Loveless retired effective August 31, 2014 and September 30, 2014, respectively, therefore the
information above reflects actual valuations.
(2) 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 $59.76, the closing price of the Company’s
common stock on December 31, 2014. 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.
(3) 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.
(4) Represents the sum of (a) for Mr. Sprague, the present value of the unvested portion of the nonqualified
retirement benefits that would vest upon a change in control, (b) the matching contribution the executive
would have received under the Company’s qualified defined contribution plan had the executive continued to
contribute the maximum allowable amount during the employment period, and (c) the contribution the
executive would have received under the Company’s nonqualified defined contribution plan had the executive
continued to participate in the plan during the employment period.
(5) Represents the estimated cost of (a) 18 months of premiums under the Company’s medical, dental and
vision programs, and (b) three years of continued participation in life, disability, accidental death insurance
and other fringe benefit programs.
(6) Valuations for death and change in control are not included as Mr. Johnson retired August 31, 2014 and
Mr. Loveless retired September 30, 2014.
ŠProxy
EXECUTIVE COMPENSATION 67