form8-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
February
5, 2010
(Date of
earliest event reported)
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
(State or
Other Jurisdiction of Incorporation)
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1-8957
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91-1292054
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(Commission
File Number)
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(IRS
Employer Identification No.)
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19300
International Boulevard, Seattle, Washington
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98188
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|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2.
below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
5.02 Departure of Directors or Principal Officers; Election of Officers;
Appointment of Principal Officers
On
February 3, 2010, the Compensation Committee of the Board of Directors (the
“Committee”) of Alaska Air Group, Inc. (the “Company”) took the following
actions.
The
Committee confirmed its philosophy to pay the senior-most executive officers
base pay below market, with an opportunity to earn market pay through short-term
and long-term incentive plans if the Company performs well. The
Committee set base salary for Chairman and CEO Bill Ayer at
$400,000. At $400,000 per year, Mr. Ayer’s base salary is
below the 25th
percentile as compared to market, based on airline peer group information
provided by the Committee’s independent compensation consultant. The Committee
also set base salary for the Company’s other Named Executive
Officers: Alaska Airlines (“Alaska”) President Brad Tilden, $375,000;
Alaska Air Group Executive Vice President/Finance and Chief Financial Officer
Glenn Johnson, $300,000; Alaska Chief Operating Officer Ben Minicucci, $285,000;
and President of Horizon Air Industries, Inc. (“Horizon”) Jeff
Pinneo, $240,000.
The
Committee approved Performance-Based Pay plan participation rates of 100% for
Mr. Ayer, 85% for Mr. Tilden, and 75% for Messrs. Johnson, Minicucci, and
Pinneo. Participation rates are expressed as a percentage of base
salary for the fiscal year assuming target performance is achieved. The actual
amounts paid under the PBP plan may be higher if the performance targets are
exceeded or lower (or even 0%) if the targets are not met.
The
Committee also approved grants of stock options, restricted stock units (“RSUs”)
and performance stock units under the Company’s 2008 Performance Incentive Plan
(“PIP”) to each of the Named Executive Officers. The table below presents the
number of shares subject to each of these awards:
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Stock Options
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RSUs
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Performance Units
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William
S. Ayer
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38,620
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22,480
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11,200
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Bradley
D. Tilden
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15,200
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8,700
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8,700
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Glenn
S. Johnson
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9,800
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5,600
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5,600
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Benito
Minicucci
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9,300
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5,300
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5,300
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Jeffrey
D. Pinneo
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7,800
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4,500
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4,500
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Each
stock option was granted with an exercise price equal to $33.26, the closing
price of a share of Company common stock on February 3, 2010, and is scheduled
to vest in annual installments over a four-year period. The RSUs are scheduled
to vest on the third anniversary of the grant date and are payable upon vesting
in shares of Company common stock on a one-for-one basis. The performance units
will be eligible to vest based on the Company’s total shareholder return (“TSR”)
relative to an airline peer group provided by the Committee’s independent
compensation consultant measured over the three-year period commencing
January 1, 2010. The Company’s performance will be ranked as compared to
its peer group. The percentage of the performance units that vest may
range from 0% to 200%, depending on the Company’s performance during that
period. Vested performance units are payable in shares of Company common stock
on a one-for-one basis.
In
connection with certain grants, the Committee approved forms of agreements for
use in evidencing the stock options and performance stock unit awards granted
under the PIP. These forms are attached hereto as Exhibits 10.1 and 10.2,
respectively, and incorporated herein by reference.
Mr.
Ayer’s grant is proportioned to bring his total direct compensation to the
50th
percentile as compared to market, based on airline peer group information
provided by the Committee’s independent compensation
consultant.
ITEM
9.01. Financial Statements and Other Exhibits
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Exhibit
10.1
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Alaska
Air Group, Inc. 2008 Performance Incentive Plan Performance Stock Unit
Award Agreement
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Exhibit
10.2
Alaska Air Group, Inc. 2008 Performance Incentive Plan Nonqualified Stock Option
Agreement
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
ALASKA AIR GROUP,
INC.
Registrant
Date:
February 5, 2010
/s/ Brandon S.
Pedersen
Brandon
S. Pedersen
Vice
President/Finance and Controller
/s/ Glenn S.
Johnson
Glenn S.
Johnson
Executive
Vice President/Finance and Chief Financial Officer