Attached files
| file | filename |
|---|---|
| EX-32.2 - EXHIBIT 32.2 - ALASKA AIR GROUP, INC. | alk10-k123117ex322.htm |
| EX-32.1 - EXHIBIT 32.1 - ALASKA AIR GROUP, INC. | alk10-k123117ex321.htm |
| EX-31.2 - EXHIBIT 31.2 - ALASKA AIR GROUP, INC. | alk10-k123117ex312.htm |
| EX-31.1 - EXHIBIT 31.1 - ALASKA AIR GROUP, INC. | alk10-k123117ex311.htm |
| EX-23.1 - EXHIBIT 23.1 - ALASKA AIR GROUP, INC. | alk10-k123117ex231.htm |
| EX-21 - EXHIBIT 21 - ALASKA AIR GROUP, INC. | alk10-k123117ex21.htm |
| EX-10.26 - EXHIBIT 10.26 - ALASKA AIR GROUP, INC. | pbpamendedandrestated011.htm |
| EX-10.25 - EXHIBIT 10.25 - ALASKA AIR GROUP, INC. | oprplanamended011718.htm |
| 10-K - 10-K - ALASKA AIR GROUP, INC. | alk10-k123117.htm |
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (“Agreement”), dated January 15, 2018 (“Effective
Date”) is entered into between Horizon Air Industries, Inc., a Washington Corp. (“Horizon”), a
wholly owned subsidiary of Alaska Air Group, Inc., a Delaware corporation (“AAG”), and Gary
L. Beck (“Executive”).
In consideration of the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows:
1. Employment
1.1 Title and Authority.
Horizon shall employ Executive as its President and Chief Executive Officer (“CEO”).
Executive shall have authority commensurate with such position, subject to the Amended and
Restated Bylaws of Horizon, in addition to other duties as assigned to Executive from time to
time by the Boards of Directors of Horizon or AAG (collectively, “Board”) or the CEO of AAG.
1.2 Duties.
Executive will perform duties associated with and required for the position of President
and CEO as may be assigned from time to time by the Board, which relate to the business of
Horizon, its subsidiaries, its affiliates, or any business ventures in which Horizon, its
subsidiaries, affiliates or its parent corporation may participate. The primary duties of Executive
may include, but are not limited to, exercising general managerial authority over Horizon’s
business operations, financial performance, strategic initiatives, personnel management, labor
relations, overall success, and the safety of Horizon’s customers and employees. Executive will
cooperate with management at Alaska Airlines, Inc. (“Alaska”) as necessary and appropriate in
connection with certain “shared service” functions performed by Alaska generally and as
outlined more specifically in the Capacity Purchase Agreement between Alaska and Horizon.
2. Attention and Effort
Executive will devote all of his entire productive time, ability, attention and effort to Horizon’s
business and will serve its interests during the term of this Agreement; provided, however, that
Executive may devote reasonable periods of time to engaging in charitable, civic, or community
service activities, so long as the foregoing additional activities do not materially interfere with
Executive’s duties under this Agreement. Consistent with this commitment, Executive will take
all actions necessary to wrap up and end any services performed under the terms of Executive’s
Consulting Agreement between Alaska and Gary Beck Aviation Consulting, LLC dated
November 30, 2016.
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3. Term
3.1 24 -Month Term
The “Effective Date” of this Agreement is January 15, 2018. Unless otherwise
terminated earlier pursuant to Section 6 of this Agreement, Executive’s term of employment
under this Agreement shall begin on the Effective Date and end no later than January 14, 2020.
All references in this Agreement to the “Term” of this Agreement shall refer to the period
beginning on the Effective Date and ending on January 14, 2020.
3.2 Expiration of the Term
Upon expiration of the Term, Executive’s employment will terminate unless Horizon and
the Executive enter into a subsequent agreement in writing signed by both parties or unless the
parties extend this Agreement by amendment in accordance with Section 13. Nothing in this
Agreement shall be read or interpreted to imply a renewed Agreement for any fixed duration
after this Term expires.
3.3 Change of Control
Concurrent with the execution hereof, Executive and Horizon shall enter into a Change of
Control Agreement on substantially the same terms and conditions as apply to executives of
Horizon. Notwithstanding any other provision in this Agreement, if a change of control (within
the meaning of the Change of Control Agreement) occurs, this Agreement shall terminate and
Executive's employment, compensation and other rights will be subject to the terms of the
Change of Control Agreement.
4. Compensation
Subject to Sections 6 and 7, during the Term of this Agreement, Horizon agrees to pay or cause
to be paid to Executive, and Executive agrees to accept in exchange for the services rendered
hereunder by him, the following compensation:
4.1 Base Salary
Executive’s compensation shall consist, in part, of an annual base salary of $350,000
(“Base Salary”), subject to applicable tax withholding and payroll deductions. Such annual Base
Salary shall be paid in substantially equal installments and at the same intervals as other officers
of Horizon are paid. At its sole discretion, the Board or the Compensation and Leadership
Development Committee of the AAG Board (“Compensation Committee”) shall determine any
increases or other adjustments in the amount of the Executive’s annual base salary.
4.2 Annual Bonus
Beginning on the Effective Date, Executive will be eligible to receive, in addition to the
annual Base Salary described above, an annual payout under the AAG Performance-Based Pay
Plan (“PBP Plan”). The annual payout will be subject to the terms of the PBP Plan and based on
achievement of the goals that are established for Horizon under the PBP Plan from time to time
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by the Compensation Committee. The participation rate used to calculate Executive’s annual
bonus will be seventy-five percent (75%) of Base Salary as defined in the PBP Plan.
4.4 Qualified Retirement Plan
Executive will be eligible to participate in the Horizon Air Savings Investment Plan
("Plan") in accordance with the terms of the Plan. Generally, under the Plan, Executive may elect
to contribute to the Plan a percentage of his compensation, and as of the Effective Date of this
Agreement, Horizon will match his contribution as provided in the Plan document. Contributions
and benefits under the Plan are subject to applicable laws and regulations and the terms of the
Plan document. The terms of the Plan document may be amended by Horizon at any time in its
sole discretion. Executive's right to participate in the Plan shall be on the same basis as Horizon
employees generally.
4.5 Equity Compensation
Subject to any necessary approvals, following the Effective Date, the Executive will be
granted awards of stock options, restricted stock units, and performance stock units, with an
aggregate target award value of 125% of the Executive’s base salary, under the 2016
Performance Incentive Plan (“PIP”).
The stock options shall be subject to such terms and conditions as the Compensation Committee
will determine, and will include the following:
(a) the exercise price of the stock option shall be equal to the closing price of
AAG stock on the date the options are awarded;
(b) the options shall vest according to the grant agreement, provided however,
that any options remaining unvested upon retirement as defined in the grant agreement, shall vest
immediately on such retirement date; and
(c) such other terms as the Compensation Committee shall determine.
The restricted stock units and performance stock units granted to the Executive will be subject to
such terms and conditions as the Compensation Committee will determine.
4.6 Nonqualified Deferred Compensation
The Executive will be eligible to participate in the AAG. Nonqualified Deferred
Compensation Plan (the “Nonqualified Plan”) and the Defined Contribution Officer
Supplemental Retirement Plan (“DC OSRP”) in accordance with the terms of such plans.
5. Benefits
During the Term of this Agreement, Executive will be entitled to participate, subject to and in
accordance with applicable eligibility requirements, in any employee health and welfare benefit
plans and fringe benefit programs, including, but not limited to, health, dental and vision, group
life and disability insurance coverage, and such other benefit programs as shall be provided from
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time to time to Horizon employees. The terms of such plans may be amended by Horizon at any
time in its sole discretion.
6. Termination
Employment of Executive pursuant to this Agreement may be terminated as provided in this
Section, but in any case, the provisions of Section 8 (Noncompetition and Nonsolicitation) shall
survive the termination of this Agreement and the termination of Executive’s employment
hereunder:
6.1 By Horizon
With or without Cause (as defined below), Horizon may terminate the employment of
Executive at any time during the Term upon giving Notice of Termination (as defined below).
6.2 By Executive
Executive may terminate his employment at any time, for any reason, upon giving Notice
of Termination.
6.3 Automatic Termination Upon Death or Disability
Executive and Horizon hereby acknowledge that Executive’s ability to perform the duties
of Horizon’s President and CEO is of the essence of this Agreement. As a result, Horizon may
terminate Executive’s employment in the event of Executive’s death or Disability (which cannot
be reasonably accommodated) during the Term. In the event of Executive’s death or Disability
during the Term, Executive will only be entitled to receive his Base Salary earned as of the date
of death or Disability and amounts payable in accordance with any bonus plans, if any, and will
not be entitled to any other salary, compensation, or benefits from Horizon thereafter, except as
otherwise specifically provided for under Horizon’s benefit plans or as otherwise expressly
required by applicable law. In the event of Disability, termination will be deemed to be effective
immediately upon a good faith determination by the Board (or the Compensation Committee
thereof) of Executive’s Disability. “Disability” means Executive’s inability, with or without
reasonable accommodation, to perform the essential duties, responsibilities, and/or functions of
his position with Horizon for a period or periods aggregating one hundred twenty (120) days (or
such other period as may be required by law) in any twelve (12) month period as a result of any
mental or physical illness, disability, or incapacity, unless Executive is granted a leave of
absence by the Board (or the Compensation Committee thereof). Upon reasonable request,
Executive will cooperate with Horizon if a question arises as to whether he has become disabled
(including, without limitation, submitting to an examination by a medical doctor or other health
care specialists selected by Horizon and authorizing such medical doctor or such other health
care specialist to discuss Executive’s condition with Horizon), pursuant to applicable law. The
costs and expenses of any such exams or evaluations shall be borne by Horizon.
6.4 Notice
The term “Notice of Termination” shall mean at least 30 days’ written notice of
termination of Executive’s employment, during which period Executive’s employment and
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performance of services will continue; provided, however, that Horizon may, upon notice to
Executive and without reducing Executive’s compensation during such period, excuse Executive
from any or all of his or her duties during the 30-day period, such excuse not to be deemed a
termination under this Agreement. In the event of termination by Horizon or the Executive prior
to the end of the Term, the effective date of the termination of Executive’s employment
hereunder and the “Termination Date” is the date on which the 30-day period expires.
7. Termination Payments
Except as specifically provided in this Section 7, in the event of termination of the Executive’s
employment under Section 6.1 or 6.2, all compensation and benefits set forth in this Agreement
shall terminate on the Termination Date.
7.1 Termination by Horizon
If Horizon terminates Executive’s employment without Cause and the Termination Date
is on or before July 14, 2019, which is six (6) months prior to the end of the Term, Executive
shall be entitled to receive: (a) termination payment equal to the remainder of the Base Salary
Executive would have received had he continued to be employed through July 14, 2019 based on
the Base Salary rate in effect on the Termination Date, but this payment shall be made only upon
execution and non-revocation of a release of claims satisfactory to Horizon and made pursuant
only to the schedule under Section 7.4 , and (b) any unpaid annual Base Salary which has
accrued for services already performed as of the Termination Date. If Horizon terminates
Executive’s employment on or after July 15, 2019, or terminates Executive’s employment with
Cause, Executive shall not be entitled to receive the termination payment set forth in clause (a)
of this Section, but shall receive unpaid Base Salary set forth in clause (b) above. For the
purposes of clarity, if Horizon terminates Executive’s employment without Cause and the
Termination Date is on or before July 14, 2019, Executive will be entitled to no additional
payments, bonuses, or benefits other than any accrued or vested benefits to which Executive
would be entitled to under ERISA or applicable federal, state, or local law and the payments
described in this Section. All payments made under this Section shall be paid subject to
applicable tax withholding and payroll deductions.
7.2 Termination by Executive
In the case of the termination of Executive’s employment by Executive, Executive shall
not be entitled to any payments hereunder, other than unpaid Base Salary under clause (b) of
Section 7.1 of this Agreement.
7.3 Termination in Connection with a Change in Control
Notwithstanding Section 7.1 of this Agreement and in full substitution therefor, if the
Executive’s employment is terminated after a Change of Control (as defined in the Change of
Control Agreement), Executive’s rights upon termination will be governed by the terms of the
Change of Control Agreement and his right to termination payments under clause (a) of Section
7.1; provided, however, that in the event the amounts payable to Executive under the Change of
Control Agreement upon termination are lower than termination payments under this Agreement,
Executive shall be entitled to the termination payments under this Agreement.
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7.4 Payment Schedule
Payments due under Section 7.1, if any, will be made within sixty (60) days of the
Termination Date. Payments due under Section 7.1(b), if any, shall be made to Executive at the
same interval as payments of salary were made to Executive immediately prior to termination.
7.5 Cause
Wherever reference is made in this Agreement to termination being with or without
Cause, “Cause” shall mean as basis for termination for reason of admission by the Executive or
reasonable substantiation by Horizon of:
(a) Failure or refusal to carry out lawful duties described in Section 1 or any
directions of the Board reasonably consistent with the duties of the Executive;
(b) Misconduct, gross negligence, job abandonment, reckless attempts to
injure Horizon, or any material policy violation;
(c) Any action or conduct that materially discredits Horizon or is materially
detrimental to Horizon’s reputation;
(d) Embezzlement, dishonesty fraud, conviction of a felony or conspiracy
against Horizon; or
(e) Any willful or intentional injury to either Horizon, its property, its
customers, or its employees in connection with the business affairs of Horizon.
8. Noncompetition and Nonsolicitation
8.1 Applicability
This Section 8 shall survive the termination of Executive’s employment with Horizon and
the expiration of the Term of this Agreement.
8.2 Scope of Competition
Executive agrees that he will not, directly or indirectly, during his employment and for a
period of one (1) year after the Termination Date for any reason, whether before or after the
expiration of this Agreement, 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 Horizon, 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 Horizon or (ii) in actual or
demonstrably anticipated research or development by Horizon, unless released from such
obligation in writing by the Board. Executive shall be deemed to be related to, or connected
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with, a Competitor if such Competitor is: (a) a partnership in which he is a general or limited
partner or employee, (b) a corporation or association of which he is a shareholder, officer,
employee or director, or (c) 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 (5%) of the outstanding
equity securities of a publicly or privately held corporation, so long as Executive has no other
relationship with such corporation.
8.3 Scope of Nonsolicitation
Executive shall not directly or indirectly solicit, influence or entice, or attempt to solicit,
influence or entice, any employee or consultant of Horizon, including its affiliates and
subsidiaries to cease his or her relationship with Horizon. Further, Executive shall not solicit,
influence, entice, or in any way divert any customer, distributor, partner, joint venture or supplier
of Horizon to do business or in any way become associated with any Competitor. This Section
8.3 shall apply during the time period and geographical area described in Section 8.2(a).
8.4 Confidentiality; Nondisclosure; Return of Materials
Executive acknowledges that by virtue of his employment at Horizon, he will have access
to confidential, proprietary, and trade secret information that is not generally known to the
public. Without limitation, such information may include: strategic initiatives or plans, financial
information, marketing information, customer lists, research and development, pricing
information, technology, supplier/vendor relationships, contract terms, employee
compensation/benefits information, customer data, and any other non-public information that the
Company considers to be confidential. During the term of his employment by Horizon and
following termination of such employment, he will not disclose (except as required by his duties
to Horizon), without limitation, strategic initiatives or plans, financial information, marketing
information, customer lists, research and development, pricing information, technology,
supplier/vendor relationships, contract terms, employee compensation/benefits information,
customer data, and any other non-public information that Horizon considers to be confidential
whether or not developed by Executive. In the event of the termination of his employment with
Horizon or the expiration of this Agreement, Executive will promptly return all documents, data
and other materials of whatever nature, including, without limitation, drawings, specifications,
research, reports, embodiments, software and manuals to Horizon which pertain to Horizon and
shall not retain or cause or allow any third party to retain photocopies, data files, or other
reproductions of the foregoing.
8.5 Equitable Relief
Executive acknowledges that the provisions of this Section 8 are essential to Horizon,
that Horizon would not enter into this Agreement if it did not include this Section 8 and that
damages sustained by Horizon as a result of a breach of this Section 8 cannot be adequately
remedied by damages, and Executive agrees that Horizon, notwithstanding any other provision
of this Agreement, including, without limitation, Section 15 and Section 19 hereof, and in
addition to any other remedy it may have under this Agreement or at law, shall be entitled to
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injunctive and other equitable relief to prevent or curtail any breach of any provision of this
Agreement, including, without limitation, this Section 8.
8.6 Effect of Violation
Executive and Horizon acknowledge and agree that additional consideration has been
given for Executive entering into this Section 8, such additional consideration including, without
limitation, bonus eligibility and certain provisions for termination payments pursuant to Section
7 of this Agreement. Violation by Executive of this Section 8 shall relieve Horizon of any
obligation it may have to make any further such payments, but shall not relieve Executive of his
obligations, as required hereunder, not to compete.
8.7 Definition of “Horizon”
For purposes of Section 8.2 and Section 8.3, “Horizon” shall include all affiliates,
subsidiaries and parent corporation of Horizon, including but not limited to Alaska and AAG,
and any business ventures in which Horizon, its affiliates, subsidiaries or its parent corporation
may participate.
9. Notice and Cure of Breach
Whenever a breach of this Agreement by either party is relied upon as justification for any action
taken by the other party pursuant to any provision of this Agreement, other than pursuant to the
definition of Cause in Section 7.5 of this Agreement, before such action is taken, the party
asserting the breach of this Agreement shall give the other party at least fifteen (15) days’ prior
written notice of the existence and the nature of such breach before taking further action
hereunder and shall give the party purportedly in breach of this Agreement the opportunity to
correct such breach during the 15-day period.
10. Form of Notice
All notices given hereunder shall be given in writing, shall specifically refer to this Agreement
and shall be personally delivered or sent by email, with a hard copy to follow via a method of
ascertainable delivery (e.g., FedEx or registered or certified mail, return receipt requested), at the
address set forth below or at such other address as may hereafter be designated by notice given in
compliance with the terms hereof:
If to Executive: Gary L. Beck
ADDRESS: _______________________________
CITY: _______________________________
STATE AND ZIP: _______________________________
Email:
If to Horizon: Horizon Air Industries, Inc.
Attn: Corporate Secretary
19300 International Blvd.
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Seattle, WA 98188
Email:
11. Assignment
This Agreement is personal to Executive and shall not be assignable by Executive. Subject to
the provisions of Section 7.3, Horizon may assign its rights hereunder to (a) any corporation
resulting from any merger, consolidation or other reorganization to which Horizon is a party or
(b) any corporation, partnership, association or other person to which Horizon may transfer all or
substantially all of the assets and business of Horizon existing at such time. All of the terms and
provisions of this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted assigns.
12. Waivers
No delay or failure by any party hereto in exercising, protecting or enforcing any of its rights,
titles, interests or remedies hereunder, and no course of dealing or performance with respect
thereto, shall constitute a waiver thereof. The express waiver by a party hereto of any right, title,
interest or remedy in a particular instance or circumstance shall not constitute a waiver thereof in
any other instance or circumstance. All rights and remedies shall be cumulative and not
exclusive of any other rights or remedies.
13. Amendments in Writing
No amendment, modification, waiver, termination, or discharge of any provision of this
Agreement, nor consent to any departure therefrom by either party hereto, shall in any event be
effective unless the same shall be in writing, specifically identifying this Agreement and the
provision intended to be amended, modified, waived, terminated or discharged and signed by
Horizon and Executive, and each such amendment, modification, waiver, termination, or
discharge shall be effective only in the specific instance and for the specific purpose for which
given. No provision of this Agreement shall be varied, contradicted or explained by any oral
agreement, course of dealing or performance or any other matter not set forth in an agreement in
writing and signed by Horizon and Executive.
14. Applicable Law
This Agreement shall in all respects, including all matters of construction, validity and
performance, be governed by, and construed and enforced in accordance with, the laws of the
State of Washington, without regard to any rules governing conflicts of laws.
15. Severability
If any provision of this Agreement shall be held invalid, illegal, or unenforceable in any
jurisdiction, for any reason, including, without limitation, the duration of such provision, its
geographical scope or the extent of the activities prohibited or required by it, then, to the full
extent permitted by law: (a) all other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in order to carry out the intent of the parties
hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability shall not
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affect the validity, legality, or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such provision to the
extent necessary for such provision to be enforceable under applicable law.
16. Headings
All headings used herein are for convenience only and shall not in any way affect the
construction of, or be taken into consideration in interpreting, this Agreement.
17. Counterparts
This Agreement, and any amendment or modification entered into pursuant to Section 13 hereof,
may be executed in any number of counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original and all of which counterparts, taken together,
shall constitute one and the same instrument.
18. Entire Agreement
This Agreement, including exhibits hereto incorporated by reference, on and as of the date hereof
constitutes the entire agreement between Horizon and Executive with respect to the subject
matter hereof and all prior or contemporaneous oral or written communications, understandings
or agreements between Horizon and Executive with respect to such subject matter are hereby
superseded and nullified in their entireties.
19. Arbitration
Disputes or controversies arising under Section 8 of this Agreement (Noncompetition and
Nonsolicitation) may only be brought by either party in the state or federal courts located in King
County, Washington. Any and all remaining disputes, claims, or controversies arising out of or
relating to or in connection with this Agreement will be finally settled by binding arbitration in
Seattle, Washington before a single arbitrator to be selected from Judicial Dispute Resolution
(“JDR”). The parties voluntarily waive any right to have covered disputes decided by a court of
law and/or jury. The arbitration shall be administered by JDR pursuant to its Arbitration Rules
and Procedures. The arbitrator’s fees and costs shall be paid for by Horizon. Arbitration must be
initiated within the statute of limitations applicable to the claims in dispute. The arbitrator’s
decision shall be final and conclusive, and both parties waive the right to trial de novo or appeal.
Judgment on the Award may be entered in King County Superior Court. Executive and Horizon
(and/or any of its affiliates) shall bear their respective attorneys’ fees and costs in any proceeding
arising under Section 8, of this Agreement.
Except as may be necessary to enter judgment upon the award or to the extent required by
applicable law, all claims, defenses, and proceedings (including, without limiting the generality
of the foregoing, the existence of the controversy, and the fact that there is an arbitration
proceeding) shall be treated in a confidential manner by the arbitrator, the parties, and their
counsel, and each of their agents, employees, and all others acting on behalf of or in concert with
them. Without limiting the generality of the foregoing, no one shall divulge to any third party or
person not directly involved in the arbitration the contents of the pleadings, papers, orders,
hearings, trials, or awards in the arbitration, except as may be necessary to enter judgment upon
