Exhibit 10.1
ALASKA AIR GROUP,
INC.
2008 PERFORMANCE INCENTIVE
PLAN
NONQUALIFIED STOCK OPTION
AGREEMENT
INCENTIVE AWARD
THIS NONQUALIFIED STOCK OPTION
AGREEMENT (this “
Option Agreement ”) dated
, by and between ALASKA AIR GROUP, INC. , a Delaware
corporation (the “ Corporation ”), and
WILLIAM S. AYER (the “ Grantee ”)
evidences the nonqualified stock option (the “ Option
”) granted by the Corporation to the Grantee as to the number
of shares of the Corporation’s Common Stock first set forth
below.
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Number of
Shares of Common Stock 1 :
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Award
Date:
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Exercise Price
per Share 1
: $
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Expiration
Date 1,2
:
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Vesting
1,2
The Option shall
become vested as to 100% of the total number of shares of Common
Stock subject to the Option on the third anniversary of the Award
Date.
The Option is granted under the
Alaska Air Group, Inc. 2008 Performance Incentive Plan (the “
Plan ”) and subject to the Terms and Conditions of
Nonqualified Stock Option (the “ Terms ”)
attached to this Option Agreement (incorporated herein by this
reference) and to the Plan. The Option has been granted to the
Grantee in addition to, and not in lieu of, any other form of
compensation otherwise payable or to be paid to the Grantee.
Capitalized terms are defined in the Plan if not defined herein.
The parties agree to the terms of the Option set forth herein. The
Grantee acknowledges receipt of a copy of the Terms, the Plan and
the Prospectus for the Plan.
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GRANTEE
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ALASKA AIR GROUP, INC.
a Delaware Corporation
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By:
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William S.
Ayer
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Phyllis J.
Campbell
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Chair, President and CEO
Alaska Air Group, Inc.
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Chair, Compensation Committee
Alaska Air Group, Inc. Board of
Directors
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Co-Mail
Code
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Home
Address
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City, State,
Zip
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1
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Subject to adjustment under
Section 7.1 of the Plan
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2
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Subject to early termination
under Section 4 of the Terms and Section 7.2 of the
Plan
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TERMS AND CONDITIONS OF
NONQUALIFIED STOCK OPTION
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1.
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Vesting;
Limits on Exercise; Incentive Stock Option Status; Possible
Acceleration .
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The Option shall vest and become
exercisable in percentage installments of the aggregate number of
shares subject to the Option as set forth on the cover page of this
Option Agreement. The Option may be exercised only to the extent
the Option is vested and exercisable.
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•
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Cumulative
Exercisability . To the
extent that the Option is vested and exercisable, the Grantee has
the right to exercise the Option (to the extent not previously
exercised), and such right shall continue, until the expiration or
earlier termination of the Option.
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No Fractional
Shares . Fractional share
interests shall be disregarded, but may be cumulated.
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Minimum Exercise
. No fewer than 100 shares of Common
Stock (subject to adjustment under Section 7.1 of the Plan)
may be purchased at any one time, unless the number purchased is
the total number at the time exercisable under the
Option.
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Nonqualified Stock
Option . The Option is a
nonqualified stock option and is not, and shall not be, an
incentive stock option within the meaning of Section 422 of
the Code.
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Notwithstanding any other provision
herein or in the Plan, the Option, to the extent not then vested,
shall become fully vested if (i) the Grantee’s
employment with the Corporation and its Subsidiaries is terminated
by the Corporation or a Subsidiary without Cause or by the Grantee
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
Grantee is entitled to accelerated vesting of the Option pursuant
to this paragraph in connection with a termination of the
Grantee’s employment prior to such Change of Control, the
Option, 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 the
Grantee shall be given a reasonable opportunity to exercise such
accelerated portion of the Option before it terminates.
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2.
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Continuance of Employment/Service Required; No
Employment/Service Commitment .
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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 Option and the rights and benefits under this Option Agreement.
Employment or service for only a portion of the vesting period,
even if a substantial portion, will not entitle the Grantee 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 4 below or under the
Plan.
Nothing contained in this Option
Agreement or the Plan constitutes an employment or service
commitment by the Corporation, affects the Grantee’s status
as an employee at will who is subject to termination without cause,
confers upon the Grantee 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
Grantee’s other compensation or benefits. Nothing in this
paragraph, however, is intended to adversely affect any independent
contractual right of the Grantee without his consent
thereto.
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3.
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Method of
Exercise of Option .
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The Option shall be exercisable by
the delivery to the Secretary of the Corporation (or such other
person as the Administrator may require pursuant to such
administrative exercise procedures as the Administrator may
implement from time to time) of:
