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Exhibit
10.3
ALASKA AIR GROUP,
INC.
2008 PERFORMANCE INCENTIVE
PLAN
STOCK UNIT AWARD
AGREEMENT
THIS STOCK UNIT AWARD
AGREEMENT (this “ Agreement ”) dated
, by and between ALASKA AIR GROUP, INC. , a Delaware
corporation (the “ Corporation ”), and
(the “ Participant ”) evidences the award of
restricted stock units (the “Award” ) granted by
the Corporation to the Participant as to the number of stock units
(the “ Stock Units ”) first set forth
below.
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| Number of
Stock Units 1 : |
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Award
Date: |
Vesting
1
[The Award shall vest and
become nonforfeitable with respect to 100% of the total number of
Stock Units subject to the Award on the third anniversary of the
Award Date.]
The Award is granted under
the Alaska Air Group, Inc. 2008 Performance Incentive Plan (the
“ Plan ”) and subject to the Terms and
Conditions of Stock Unit Award (the “ Terms ”)
attached to this Agreement (incorporated herein by this reference)
and to the Plan. The Award has been granted to the Participant in
addition to, and not in lieu of, any other form of compensation
otherwise payable or to be paid to the Participant. Capitalized
terms are defined in the Plan if not defined herein. The parties
agree to the terms of the Award set forth herein. The Participant
acknowledges receipt of a copy of the Terms, the Plan and the
Prospectus for the Plan.
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| PARTICIPANT |
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ALASKA AIR GROUP, INC. |
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a Delaware corporation |
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By: |
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William
S. Ayer |
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Chairman,
President and CEO |
TERMS AND CONDITIONS OF
STOCK UNIT AWARD
1. Stock
Units . As used herein, the term “stock unit”
shall mean a non-voting unit of measurement which is deemed for
bookkeeping purposes to be equivalent to one outstanding share of
the Corporation’s Common Stock (subject to adjustment as
provided in Section 7.1 of the Plan) solely for purposes of
the Plan and this Agreement. The Stock Units shall be used solely
as a device for the determination of the payment to eventually be
made to the Participant if such Stock Units vest pursuant to this
Agreement. The Stock Units shall not be treated as property or as a
trust fund of any kind.
2. Vesting;
Possible Acceleration . Subject to Section 7 below,
the Award shall vest and become nonforfeitable as set forth on the
cover page of this Agreement. Notwithstanding any other provision
herein or in the Plan, the Award, to the extent not then vested,
shall become fully vested and shall be paid in accordance with
Section 6 promptly following the Participant’s
Separation from Service (as defined below) if (i) the
Participant’s employment with the Corporation and its
Subsidiaries is terminated by the Corporation or a Subsidiary
without Cause or by the Participant for Good Reason, and
(ii) such termination occurs at any time within the period
commencing six (6) months before a Change of Control and
ending twenty-four (24) months after such Change of Control.
(For these purposes, the terms “Cause,” “Change
of Control” and “Good Reason” shall have the
meanings ascribed to them in Exhibit A attached hereto.) In the
event that, upon the occurrence of a Change of Control, the
Participant is entitled to accelerated vesting of the Award
pursuant to this Section 2 in connection with a termination of
the Participant’s employment prior to such Change of Control,
the Award, to the extent it had not vested and was cancelled or
otherwise terminated upon or prior to the date of such Change of
Control solely as a result of such termination of employment, shall
be reinstated and shall automatically become fully vested and shall
be paid in accordance with Section 6 upon the Change of
Control. For purposes of this Agreement, “ Separation from
Service ” shall mean a “separation from
service” within the meaning of Treasury Regulation
Section 1.409A-1(h)(1), without regard to the optional
alternative definitions available thereunder (i.e. generally a
termination of the Participant’s employment with the
Corporation or a Subsidiary).
3. Continuance
of Employment . The vesting schedule requires continued
employment or service through each applicable vesting date as a
condition to the vesting of the applicable installment of the Award
and the rights and benefits under this Agreement. Employment or
service for only a portion of the vesting period, even if a
substantial portion, will not entitle the Participant to any
proportionate vesting or avoid or mitigate a termination of rights
and benefits upon or following a termination of employment or
services as provided in Section 7 below or under the
Plan.
Nothing contained in this
Agreement or the Plan constitutes an employment or service
commitment by the Corporation, affects the Participant’s
status as an employee at will who is subject to termination without
cause, confers upon the Participant any right to remain employed by
or in service to the Corporation or any Subsidiary, interferes in
any way with the right of the Corporation or any Subsidiary at any
time to terminate such employment or services, or affects the right
of the Corporation or any Subsidiary to increase or decrease the
Participant’s other compensation or benefits. Nothing in this
paragraph, however, is intended to adversely affect any independent
contractual right of the Participant without his consent
thereto.
4. Limitations
on Rights Associated with Units . The Participant shall
have no rights as a stockholder of the Corporation, no dividend
rights and no voting rights, with respect to the Stock Units and
any shares of Common Stock underlying or issuable in respect of
such Stock Units until such shares of Common Stock are actually
issued to and held of record by the Participant. No adjustments
will be made for dividends or other rights of a holder for which
the record date is prior to the date of issuance of the stock
certificate.
5. Restrictions
on Transfer . Neither the Award, nor any interest therein
or amount or shares payable in respect thereof may be sold,
assigned, transferred, pledged or otherwise disposed of, alienated
or encumbered, either voluntarily or involuntarily. The transfer
restrictions in the preceding sentence shall not apply to
(a) transfers to the Corporation, or (b) transfers by
will or the laws of descent and distribution.
6. Timing and
Manner of Payment of Stock Units . On or as soon as
administratively practical following each vesting of the applicable
portion of the total Award pursuant to the terms hereof (and in all
events within ninety (90) days after such vesting event), the
Corporation shall deliver to the Participant a number of shares of
Common Stock (either by delivering one or more certificates for
such shares or by entering such shares in book entry form, as
determined by the Corporation in its discretion) equal to the
number of Stock Units subject to this Award that vest on the
applicable vesting date; provided, however, that in the event that
the vesting and payment of the Stock Units is triggered by the
Participant’s Separation from Service and the Participant is
a “specified employee” (within the meaning of Treasury
Regulation Section 1.409A-1(i)) on the date of such Separation
from Service, the Participant shall not be entitled to any payment
of the Stock Units until the earlier of (i) the date which is
six (6) months after the Participant’s Separation from
Service with the Corporation for any reason other than death, or
(ii) the date of the Participant’s death, if and to the
extent such delay in payment is required to comply with
Section 409A of the Code. The Corporation’s obligation
to deliver shares of Common Stock or otherwise make payment with
respect to vested Stock Units is subject to the condition precedent
that the Participant or other person entitled under the Plan to
receive any shares with respect to the vested Stock Units deliver
to the Corporation any representations or other documents or
assurances that the Administrator may deem necessary or
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