Exhibit 10.1
EMPLOYMENT, RETIREMENT AND
NON-COMPETE AGREEMENT
This Retirement and Non-Compete
Agreement (this “Agreement”), is made this
th day of April 2007 (the
“Effective Date”), by and between Kevin Finan
(“Executive”), an individual, and Alaska Airlines, Inc.
(“Alaska”), an Alaska corporation that is a wholly
owned subsidiary of Alaska Air Group, Inc. (“AAG”), a
Delaware corporation.
WHEREAS, Executive is presently the
Executive Vice President/Operations of Alaska;
WHEREAS, the Executive desires to
retire, effective January 1, 2008;
WHEREAS, Alaska and the Executive
desire that Executive transition to a role of Executive Vice
President/Strategic Projects until January 1, 2008, on which
date the Executive retires from Alaska; and
WHEREAS, Alaska and Executive both
desire that Executive should provide transition consulting services
to Alaska for a period of time following his retirement from
Alaska.
NOW, THEREFORE, Alaska and
Executive, in consideration of the covenants undertaken and the
releases below, enter into this Agreement:
1. Employment . Alaska shall
employ Executive as its Executive Vice President/Strategic Projects
from the Effective Date until January 1, 2008 (the
“Retirement Date”). Executive has authority consistent
with that position, subject to Alaska’s Charter and Bylaws,
as may be granted from time to time by the Board of Directors of
Alaska or Alaska’s Chief Executive Officer. Executive will
perform such duties as may be assigned from time to time by the
Board of Directors of Alaska or Alaska’s Chief Executive
Officer, which relate to the business of Alaska, its subsidiaries,
its affiliates, or any business ventures in which Alaska, its
subsidiaries or its parent corporation may participate.
Executive will devote all of his
entire productive time, ability, attention and effort to
Alaska’s business and will serve its interests during his
employment by Alaska; provided , however , that
Executive may devote reasonable periods of time to
(a) engaging in personal investment activities and
(b) engaging in charitable or community service activities, so
long as none of the foregoing additional activities materially
interfere with Executive’s duties to Alaska.
2. Compensation and Officers
Supplemental Retirement Plan . Alaska agrees to pay and
Executive agrees to accept in exchange for the services rendered
hereunder by him during the period he is employed by Alaska, the
following compensation:
a. Base Salary :
Executive’s base salary shall be at an annualized rate of
$260,000, subject to any required tax withholding and all customary
payroll deductions. Such annual base salary shall be paid in
substantially equal installments and at the same intervals as other
officers of Alaska are paid.
b. Officers Supplemental
Retirement Plan : Executive shall continue to participate in
the Alaska Airlines Officers Supplemental Retirement Plan
(“OSRP”), the Qualified Plan For Salaried Employees and
the Alaska Saver 401(k) Plan, in accordance with the terms and
conditions of those plans as they are in effect from time to
time.
c. Benefits . Executive will
be entitled to participate, subject to and in accordance with
applicable terms and conditions of each program, in fringe benefit
programs, including, but not limited to, health, dental and vision
insurance, group life insurance, car allowance and maintenance, and
such other programs as shall be provided from time to time by
Alaska for its officers generally.
3. Voluntary Retirement .
Executive hereby irrevocably retires from his position as Executive
Vice President/Strategic Projects and as an employee of Alaska, its
subsidiaries and affiliates, and as an officer, director and in any
other capacity with Alaska, its parent, subsidiaries and
affiliates, effective as of the Retirement Date. Concurrently
herewith, Executive will execute and deliver to Alaska a retirement
letter in the form of Exhibit A attached hereto.
4. Separation Benefits . In
addition to any vested retirement benefits to which Executive has
contributed and/or Alaska has contributed on Executive’s
behalf, Alaska shall provide to Executive the following separation
benefits on and following the Retirement Date:
a. Retirement Date Payments .
On his Retirement Date, Executive will receive a final paycheck
representing all unpaid salary earned through the Retirement Date
and a lump-sum payment equal to 6 weeks base pay which represents
all accrued but unused vacation.
b. Retirement Bonus. On his
Retirement Date, Alaska shall pay to Executive a retirement bonus
equal to a sum of $200,000, less all standard withholdings and
authorized deductions.
c. Performance-Based Pay Plan
. Executive will be eligible for a 2007 Performance-Based Pay
(“PBP”) payout, if any, based on 2007 base wages earned
through the Retirement Date.
d. Stock Options and Restricted
Stock Units. Executive’s Stock Options and Restricted
Stock Units will continue to vest through the Retirement
Date.
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Additional vesting time and time to
exercise options will be as set forth in the option agreements for
a retiring officer, and each award will otherwise be governed by
the terms and conditions of the applicable award
agreement.
e. Travel and Board Room
Membership. Executive shall be entitled to normal online travel
privileges for retired officers after the Retirement Date,
including boarding priority normally afforded to retired officers.
This shall be in addition to the travel benefits provided to
Executive and spouse under the terms of the Consulting Agreement,
as defined below. In addition, Executive shall be entitled to
lifetime membership in Alaska’s Board Room
program.
5. Consulting Obligations .
Executive agrees to execute the Consulting Agreement in the form
attached hereto as Exhibit B, (the “Consulting
Agreement”) and provide Consulting Services to Alaska in
accordance with the terms and conditions of the Consulting
Agreement. In the event that Executive revokes this Agreement
pursuant to Section 9 (d), the Consulting Agreement shall also
be revoked.
6. Agreement Inadmissible .
Neither this Agreement nor anything in this Agreement shall be
construed to be or shall be admissible in any proceeding as
evidence of or an admission by Alaska of any violation of its
policies, procedures, state or federal laws or regulations. This
Agreement may be introduced, however, in any proceeding to enforce
the Agreement. Such introduction shall be pursuant to an order
protecting its confidentiality.
7. General Release and Covenant
Not To Sue . Except for those obligations created by or arising
out of this Agreement, Executive on behalf of himself, his
descendants, dependents, heirs, executors, administrators, assigns,
and successors, and each of them, hereby covenants not to sue and
fully releases and discharges Alaska, and its parent, subsidiaries
and affiliates, past and present, and each of them, as well as its
and their trustees, directors, officers, agents, attorneys,
insurers, employees, stockholders, representatives, assigns, and
successors, past and present, and each of them, hereinafter
together and collectively referred to as “Releasees,”
with respect to and from any and all claims, wages, demands,
rights, liens, agreements, contracts, covenants, actions, suits,
causes of action, obligations, debts, costs, expenses,
attorneys’ fees, damages, judgments, orders and liabilities
of whatever kind or nature in law, equity or otherwise, whether now
known or unknown, suspected or unsuspected, and whether or not
concealed or hidden, which he now owns or holds or he has at any
time heretofore owned or held or may in the future hold as against
said Releasees, including any claims arising out of or in any way
connected with his employment relationship with Alaska, or his
separation from the same, or any other transactions, occurrences,
acts or omissions or any loss, damage or injury whatever, known or
unknown, suspected or unsuspected, resulting from any act or
omission by or on the part of said Releasees, or any of them,
committed or omitted prior to the date of this Agreement including,
without limiting the generality of the foregoing, any claim under
Title VII of the Civil Rights Act of 1964 (as amended), the
Age
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Discrimination in Employment Act, the Americans
with Disabilities Act, the Family and Medical Leave Act of 1993
(the “FMLA”), the Washington Law Against
Discrimination, the Washington Age Discrimination Law, or any claim
for severance pay, bonus, sick leave, holiday pay, vacation pay,
life insurance, health or medical insurance or any other fringe
benefit. This release does not, however, cover any claim that
cannot be released as a matter of applicable law. Executive
acknowledges and agrees that he has received any and all leave and
other benefits that the has been and is entitled to pursuant to
FMLA.
8. Release of Unknown Claims
. It is the intention of Executive in executing this Agreement that
the same shall be effective as a bar to each and every claim,
demand and cause of action hereinabove specified. In furtherance of
this intention, Executive hereby expressly waives any and all
rights and benefits conferred upon him by any law, statute, or
legal doctrine that would otherwise prevent the release of unknown
claims and expressly consents that this Agreement shall be given
full force and effect according to each and all of its express
terms and provisions, including those related to unknown and
unsuspected claims, demands and causes of action, if any, as well
as those relating to any other claims, demands and causes of action
hereinabove specified. Executive acknowledges that he may hereafter
discover claims or facts in addition to or different from those
which Executive now knows or believes to exist with respect to the
subject matter of this Agreement and which, if known or suspected
at the time of executing this Agreement, may have materially
affected this settlement. Nevertheless, Executive hereby waives any
right, claim or cause of action that might arise as a result of
such different or additional claims or facts. Executive
acknowledges that he understands the significance and consequence
of such release and waiver.
9. Federal Age Discrimination in
Employment Act Waiver and Advisements . Executive expressly
acknowledges and agrees that, by entering into this Agreement, he
is waiving any and all rights or claims that he may have arising
under the Age Discrimination in Employment Act of 1967, as amended
(the “ADEA”), which have arisen on or before the date
of execution of this Agreement. Executive further expressly
acknowledges and agrees that:
a. In return for this Agreement, he
will receive compensation beyond that which he was already entitled
to receive before entering into this Agreement;
b. He was orally advised by Alaska
and is hereby advised in writing by this Agreement to consult with
an attorney before signing this Agreement;
c. He was given a copy of this
Agreement on
and informed that he had twenty one (21) days within which to
consider the Agreement, but and that if he wished to execute this
Agreement prior to the expiration of such 21-day period, he should
execute the Acknowledgment and Waiver attached as Exhibit
C;
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d. He was informed that he has seven
(7) days following the date of execution of the Agreement in
which to revoke the Agreement.
10. Confidential and Proprietary
Information . Executive acknowledges that by reason of his
position with Alaska he is aware of and has been given access to
concepts, designs, processes, technologies, trade secrets, customer
lists, marketing plans, business plans, and other forms of
confidential and proprietary information, whether or not developed
by Executive. Executive agrees promptly to return all related
documents, data and other materials of whatever nature. Executive
further represents that he has held all such information
confidential and will continue to do so, and that he will not use
such information and relationships for any business (which term
herein includes a partnership, firm, corporation or any other
entity) without the prior written consent of Alaska.
11. Non-Competition .
Executive agrees that he will not, directly or indirectly, during
his employment and for a period of one (1) year from the date
on which his employment with Alaska terminates for any reason, be
employed by, consult with or otherwise perform services for, own,
manage, operate, join, control or participate in the ownership,
management, operation or control of or be connected with, in any
manner, any Competitor. A “Competitor” shall include,
(a) any entity which provides air transportation services
anywhere in the world, and (b) any business whose efforts are
in competition with the efforts of the company, including, without
limitation, any business whose efforts involve any research and
development, products or services in competition with products or
services which are, during or at the end of the Term, either
(i) produced, marketed or otherwise commercially exploited by
Alaska or (ii) in actual or demonstrably anticipated research
or development by Alaska, unless released from such obligation in
writing by Alaska’s Board of Directors. Executive shall be
deemed to be related to or connected with a Competitor if such
Competitor is (x) a partnership in which he is a general or
limited partner or employee, (y) a corporation or association
of which he is a shareholder, officer, employee or director, or
(z) a partnership, corporation or association of which he is a
member, consultant or agent; provided, however, that nothing herein
shall prevent the purchase or ownership by Executive of shares
which constitute less than five percent of the outstanding equity
securities of a publicly or privately held corporation, so long as
Executive has no other relationship with such
corporation.
12. Non-Solicitation .
Executive shall not, during his employment and for a period of one
(1) year from the date on which his employment with Alaska
terminate for any reason, directly or indirectly solicit, influence
or entice, or attempt to solicit, influence or entice, any employee
or consultant of Alaska to cease his or her relationship with
Alaska or solicit, influence, entice or in any way divert any
customer, distributor, partner, joint venturer or supplier of
Alaska to do business or in any way become associated with any
Competitor.
13. Cooperation with
Investigations . Nothing in this Agreement limits, restricts or
precludes either Alaska or Executive from cooperating with any
governmental
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agency in the performance of its investigative
or other lawful duties. Further, Executive agrees to cooperate
fully with Alaska, including but not limited to the prosecution or
defense of any civil or criminal action or other legal proceedings
in which Alaska determines that Executive has relevant information
or knowledge. Such cooperation shall include, without limitation,
communicating with representatives (including attorneys) for
Alaska, providing truthful testimony in oral or written form,
preparing for such testimony with attorneys for Alaska, and
reviewing documents in connection with such communications or
preparations; provided, however , that the foregoing shall
not be deemed to require Executive to waive any Fifth Amendment or
other privilege with respect to events that occurred during
Executive’s tenure at Alaska.
14. Full Payment of Compensation
Due and Owing . Executive agrees that the payments described in
paragraphs 2, 3, and 4 above are the sole and exclusive
compensation to which he is entitled from Alaska or any other of
the Releasees, and acknowledges that the payments described in said
paragraphs fully satisfy an
