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SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |_| Filed by a Party other than the
Registrant |X| Check the appropriate box: |X| Preliminary Proxy
Statement |_| Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2)) |_| Definitive Proxy Statement
|_| Definitive Additional Materials |_| Soliciting Material
Pursuant to ss.240.14a-12
THE ALASKA AIR GROUP, Inc. ("AAG") (Name of Registrant as
Specified In Its Charter)
Steve Nieman, Richard D. Foley and Robert C. Osborne MD (Name of
Persons Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): |X| No fee
required |_| Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined)
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing. 1) Amount Previously Paid: 2) Form,
Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed: PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS
Scheduled to be held at the William M. Allen Theater at The
Museum of Flight, 9404 E. Marginal Way South, Seattle,
Washington at 2 p.m. on May 20, 2003. For more details, please
reference the Company_s proxy statement.
SOLICITATION, VOTING AND REVOCATION OF PROXIES
Richard D. Foley, Steve Nieman and Robert C. Osborne, MD
Note: The AAG_s Proxy Statement is incorporated by reference in
its entirety.
Hello. Allow us to introduce ourselves: We are Richard Foley,
Steve Nieman and Dr. Robert Osborne. We are the CHALLENGERS for
ELECTION to the board of directors of Alaska Air Group, Inc.
("the company"). We are running against the INCUMBENTS
nominated for re-election by the incumbent board. All three of
us have agreed to accept nomination and to serve if elected.
For more information on us, see the fifth and sixth sections
below titled INFORMATION ABOUT and PARTICIPANTS IN THE
SOLICITATION.
The CHALLENGERS provide these proxy materials to enable you to
exercise your right to vote for their election to the board of
directors at the company's 2003 Annual Shareholders Meeting.
Shareholder rights, corporate democracy and corporate governance
have become subjects of debate to the extent that the US
Securities and Exchange Commission ("SEC") has announced on
April 14, 2003 that it will "Review Current Proxy Rules and
Regulations to Improve Corporate Democracy." (See www.sec.gov).
We believe the existing systems can be confusing, complex and
open to some degree to opposing legal interpretation. However,
within the range of legal choices a company can make, we think
there are choices that are optimal and help the shareholders to
have a better understanding of complex subjects. Similarly
there are choices, we believe, that are less than optimal. In
our opinion, we think that wherever equally legal alternatives
exist, the one that optimizes shareholder understanding should
be the one selected.
In the case of our company, we see examples of what we think can
be characterized as both types of choices. An example of an
optimal choice can be found on page 42 of the Company's proxy
statement under the heading OPPOSING SOLICITATION. This
provides the shareholders important information about the
CHALLENGERS. It properly names them and thereby, we think,
infers that there are six nominees to select from for the three
seats up for election. However, the company, as was its right,
chose to OMIT the names of the CHALLENGERS from the Company's
proxy voting card. We believe that choice was less than
optimal.
We think that once having informed the shareholders about the
OPPOSING SOLICITATION and naming the individuals on that
alternate slate, it would have been more optimal for the
shareholders to have been empowered to exercise their right to
vote for, against or withhold from any combination of three of
the six had all six appeared on the companys proxy card. THE
CHALLENGERS WERE NOT OFFERED AN OPPORTUNITY TO ACCEPT OR
REJECT SUCH AN OPTION. Had the company made such an offer, the
CHALLENGERS would have accepted it.
Therefore, the CHALLENGERS, Richard D. Foley, Steve Nieman and
Robert C. Osborne, M.D. are undertaking to provide you this
proxy statement and proxy card to enable you to vote on all the
candidates who are running. We asked the company to allow us to
include the incumbent nominees on our proxy voting card, but, as
was their right, the Company declined. We think this was a less
than optimal choice. We believe that a fresh perspective is
needed on the board of directors, and that our company would
benefit from electing the three CHALLENGER candidates.
We think that this year where there is an ALTERNATE SLATE
CONTESTING FOR ELECTION, AND A SOLICITATION IN OPPOSITION TO THE
COMPANY that it may become an example for study in the SEC_s
upcoming review on corporate governance and the proxy system.
EXPENSES
The total amount to be spent directly or indirectly will not
exceed $500 in aggregate. Contrary to customary practice, we
have chosen regardless the outcome of the vote NOT TO SEEK
REIMBURSEMENT FOR THIS SOLICITATION from the company. In many
contests, if the CHALLENGERS win they seek to have their
expenses reimbursed by the Company, such as duplicative
mailings, etc. In our view such a practice causes the
shareholders to pay twice for essentially the same thing. We
plan limited printing or mailing by the U.S. Post Office or any
other carrier. Electronic mail (email) will be used to
communicate with and contact some of the shareholders of the
company, such as institutional holders.
DIRECTOR COMPENSATION
If elected, all three CHALLENGER candidates have agreed that any
director compensation paid by the Company beyond reimbursement
of expenses incurred in attending meetings BE DONATED TO THE
EMPLOYEE ASSISTANCE FUNDS (EAF) OF BOTH ALASKA AIRLINES AND
HORIZON AIR. We are paying for the costs of this solicitation
collectively, and have pledged not to seek reimbursement from
the Company.
HOW WE PLAN TO SOLICIT
The dedicated Internet web site www.votepal.com will be used for
the purposes of conducting our solicitation. It will contain a
downloadable/printable version of our proxy statement and proxy
card. The proxy card will not be available until we file a
definitive 14A. The web site will provide email addresses,
telephone and fax numbers for shareholders to contact us. It may
also reference the Company_s proxy materials. For those who are
unable to access the Internet, we will upon certified request
mail our proxy materials. Requests can be mailed to a postal
address, which will be provided.
We may use a "telephone tree technique" to ask shareholders if
they would be willing to contact two or three other shareholders
to get them to view our web site. It is our intention to
lawfully maximize the use of Internet communication tools. We
will make ourselves available to all media interested in our
efforts, and will strive to follow all legal requirements,
regulations and guidelines.
The Company, objecting to the form of our request for the
shareholder list, informed us that it would exercise what it
considered its lawful option not to provide us with a copy of
the shareholders lists. The company offered, as was within its
right to do, to mail our proxy statement and proxy card to all
the shareholders. As this would have been a second mailing and
a repeated cost of approximately forty to fifty thousand dollars
that the CHALLENGERS would have had to pay, we chose to decline.
Presently over 80% of the Company's shares are held by
institutional investors, therefore we expect to have little
difficulty in contacting that percentage of the outstanding
shares.
It remains to be seen whether the shareholders of our company
will respond positively to this grassroots proxy solicitation.
We do not agree with the argument that only shareholders with
lots of money to spend on litigation, proxy solicitors and
multiple mailings should be the only ones allowed to communicate
with other shareholders or be empowered to exercise their
ownership rights.
We believe that a more democratic system is a better system. We
think that shareholders should not be prevented from properly
exercising their rights of ownership by a system that creates
artificial barriers that ensures participation by only wealthy
shareholders. We think that a proxy card, like any ballot in a
democratic system, should contain the names of all qualified
candidates. Further, like a regular election, the candidates
should shoulder the costs of campaigning. This should apply for
both incumbents and challengers.
VOTING
WHAT AM I VOTING ON?
You are being asked to vote for the election of the three
CHALLENGERS as directors from the slate of six, a proposal to
amend the Company's Certificate of Incorporation to remove the
super-majority voting provision and [7] stockholder proposals.
HOW DO I CAST MY VOTE USING THE CHALLENGERS_ PROXY CARD?
For employee 401(k) plan participants and registered
shareholders, there is a Voter Control Number that can be
obtained from either postal mailed or emailed proxy materials.
This Voter Control Number is provided by either EquiServe, the
transfer agent hired by the Company, or by ADP. ADP is an
intermediary information processing and mailing agent used by
stock exchanges for shareholders who own shares through bankers
or brokers. In order to accurately identify yourself and enhance
the potential that your proxy will be counted, you may
voluntarily write in your control number on our proxy card.
HOWEVER, IF YOU HOLD SHARES IN STREE NAME, YOU SHOULD ALSO
CONTACT YOUR BANKER, BROKER OR TRUSTEE AND REQUEST A LEGAL FORM
OF PROXY THAT WILL ENABLE YOU TO VOTE FOR THE ALTERNATE SLATE OF
CANDIDATES.
We have received guidance from the SEC that the Commission would
not object to shareholders writing their Voter Control Number
received from the Company, a banker or a broker on our proxy
cards. In addition, those SHAREHOLDERS HOLDING THEIR SHARES
THROUGH A BANK, BROKER OR TRUSTEE SHOULD CALL THEIR APPLICABLE
AGENT AND REQUEST A LEGAL FORM OF PROXY. The CHALLENGERS agree
that you may download and print out as many copies of their
materials as you feel necessary for sending to the Company,
EquiServe, ADP, your banker, broker, trustee, any other type of
intermediary, and for your records. Please remember if you are
downloading and mailing one of our proxy cards--SIGN IT AND FILL
IN THE NECESSARY INFORMATION TO ACCURATELY IDENTIFY YOURSELF AND
THE NUMBER OF SHARES YOU OWN TO VOTE.
Primarily, we will be offering and collecting our proxy cards
electronically. On www.votepal.com, we will provide a proxy card
in pdf and text format that interested shareholders can view and
transmit via a secure web page, or download, fill in, sign and
mail to a post office box or fax number that will be provided.
HOW DO I CAST MY VOTE USING THE COMPANY_S PROXY CARD?
For employee 401(k) plan participants, you will have to vote via
EquiServe to complete the requirement that the Putnam trustee be
notified of your voting instructions. This must be completed
before the May 15, 2003 midnight Eastern Time deadline suggested
by the Company. (See the company's proxy statement on page 8
under the heading "You may vote in person at the meeting";
second paragraph). However, our candidates are not printed on
the Company_s proxy card. Thus, you will need to OBTAIN A LEGAL
PROXY FROM THE COMPANY OR THE TRUSTEE. WE ARE STILL IN THE
PROCESS OF ENDEAVORING TO OBTAIN THE APPLICABLE INFORMATION FROM
PUTNAM, WHICH IS THE DESIGNITED TRUSTEE.
GENERALLY ACCEPTED PRACTICE IS THAT THE MOST RECENTLY-DATED
LEGAL PROXY WILL BE THE ONE COUNTED.
YOU MAY VOTE IN PERSON AT THE MEETING
We plan to have extra copies of our proxy statements and proxy
cards available for those shareholders at the meeting who have
been unable to download copies of them. If you hold your shares
through a bank, broker or trustee, you must CONTACT THEM TO
RECEIVE FROM THEM A LEGAL PROXY, and bring the legal proxy with
you in order to vote at the meeting. You may call and request a
legal proxy from your stockbroker, or download and print one at
the Internet voting site to which your proxy materials direct
you, or from the CHALLENGERS web site. To enhance the
probability that your vote will be counted, you will need to
voluntarily write in the Voter Control Number, check the names
of your selections for election, and/or mark your choices
regarding the proposals, and deliver that completed proxy to the
inspector of elections or his appointees at the meeting.
FOR EMPLOYEE SHAREHOLDERS, we understand that this situation may
be confusing. Some employees have received their materials from
the Company via the Internet, including electronic voting
procedures. Some employee shareholders may receive their proxy
materials and proxy card on paper from the Company. Further,
there are two trustees for company 401(k) plans: the Company is
one, and the second is Putnam, which is the designated trustee.
We are endeavoring to gather the correct procedures and will
provide them in our final definitive filing. As things stand at
the time of this filing, employee shareholders through company
plans, including the 401(k), are not being provided with a
practical method to vote for the CHALLENGERS. Some of the
causes for this state of affairs regarding the employee
shareholders is due to the choice we made not to do a regular
mailing. HOWEVER, WE BELIEVE THAT EMPLOYEE SHAREHOLDERS SHOULD
BE ENTITLED TO A PAPER PROXY CARD, AND SHOULD BE EMPOWERED TO
SUBMIT A LEGAL PROXY TO VOTE FOR THE CHALLENGERS. WE RECOMMEND
THAT EMPLOYEE SHAREHOLDERS CONTACT THE COMPANY TO REQUEST A
LEGAL PROXY, OR RECEIVE AN EXPLANATION WHY THEY ARE NOT ENTITLED
TO RECEIVE ONE.
The law of Delaware, under which the Company is incorporated,
specifically permits electronically transmitted proxies,
provided that each such proxy contains or is submitted with
information from which the inspectors of election can determine
that it was authorized by the stockholder. (General Corporation
Law of the State of Delaware, Section 212(c).)
In general there is some disagreement on whether electronically
transmitted proxies are valid and lawful where a state of a
"contested election" has been declared. The CHALLENGERS
position on this is that we have no objection to electronic
proxy voting. We have discussed this with the Company, and
indicated our willingness to participate in developing a viable
method to maximize the convenience for shareholders to vote, and
maximize the ease and accuracy of the tabulation of the proxy
votes. Our position is that the determination of a contested
election exists when the company and the CHALLENGERS have filed
accordingly with the SEC.
We understand that the New York Stock Exchange usually does not
agree with positions like ours. It maintains that challengers
have to pay ADP to do a mailing to all shareholders who hold
their shares in street name through banks, brokers or other
intermediaries. We can only view such a position as being wrong
on two counts: We believe (1) that this decision should be made
by the participants and the SEC--not by intermediaries; and (2)
to be forced to pay for an essentially duplicative mailing is
for all practical purposes little more than a form of legal
extortion.
WHAT IF I CHANGE MY MIND AFTER I SUBMIT MY PROXY?
If the proxy is signed with a voting direction indicated, the
proxy will be voted according to the direction given. If no
direction is given with respect to a proposal, the proxy will be
voted as follows with respect to any such proposal (listed in
the order of presentation and using the same numbering as the
Company's proxy materials for ease of comparison): For Proposals
1 through 9 and for director candidates Richard D. Foley,
Stephen Nieman and Robert C. Osborne MD. We again direct you to
the Company_s Proxy Statement.
Before the polls close at the meeting, you may revoke your proxy
and change your vote by submitting a later-dated proxy. Before
the day of the meeting, you may do this by contacting us via
fax, phone or email, which will be provided. Finally, you can
send written revocation to: Keith Loveless, Corporate Secretary,
Alaska Air Group, Inc., PO Box 68947, Seattle WA 98168-0947.
Telephone number (206) 431-7040.
Reiterating, how are shares in the Company_s 401(k) plan voted?
At the record date, The company 401(k) trust held 1,679,193
shares, which are eligible to be voted by employee participants.
(See the Company_s Proxy Statement, page 9, column 2 par. 3).
The proxy card sent with the proxy statement by the Company's
transfer agent, EquiServe, covers shares held in the 401(k)
trust as well as shares held of record, if any. Unfortunately,
the names of our candidates are not on the Company_s EquiServe
proxy card. The trustee will vote the shares in accordance with
instructions received from participants. If you want to vote our
candidates, you will have to mark "withheld" for the three
director candidates nominated by the Company. We feel this step
must be taken because sending instructions is important: Lacking
guidance, the trustee will vote shares for which no instructions
were received in the same proportion, for and against, as the
shares for which instructions were received. WE FURTHER
RECOMMEND THAT EMPLOYEE SHAREHOLDERS WHO VOTE THROUGH THE 401(K)
PLANS CONTACT THE COMPANY FOR A LEGAL FORM OF PROXY OR AN
EXPLANATION WHY THEY ARE NOT ENTITLED TO ONE.
The entire question of what is and what is not a legal proxy may
be disputed. Therefore, we recommend all interested
shareholders print out at least two copies of our proxy cards,
vote, sign and mail one to EquiServe_s address, and mail the
second to our postal address. Additionally, you will need to
write the Voter Control Number on it, and also execute our
electronic proxy card. We will attempt to notify EquiServe of
the CHALLENGERS_ proxy cards that we have collected. WE
UNDERSTAND THAT THIS PROCESS IS MORE COMPLICATED THAN YOU WOULD
PREFER, BUT IT IS THE ONLY METHOD WE HAVE BEEN ABLE TO DEVISE
THAT WILL ALLOW THE FULL EXERCISE OF YOUR SHAREHOLDER RIGHTS TO
HAVE AN OPPORTUNITY TO VOTE THREE FROM THE SIX CANDIDATES.
Reference the Company_s Proxy Statement which states: To allow
sufficient time for voting by the trustee, the Company instructs
that your voting instructions for 401(k) plan shares must be
received by 11:59 p.m. Eastern Time on May 15, 2003. (See page 8
under the heading "You may vote in person at the meeting" second
para.).
INFORMATION ABOUT NOMINEES
Mr. Richard De Wayne Foley, 56; retired 32-year railroad
conductor and President of The Foley Group. Mr. Steve Nieman,
50; pilot for Horizon Air since 1978. Robert C. Osborne, M.D.,
58; physician in private practice. For more information, see the
heading PARTICIPANTS IN THE SOLICITATION below.
Mr. Nieman and Mr. Foley became acquainted with each other
through membership in CESJ_the Center for Economic and Social
Justice, a non-profit organization advocating stakeholder
ownership among other advocacies. In 2000, Mr. Nieman formed
the non-profit Washington State corporation HACECA, Inc., which
stands for the Horizon/Alaska Customers/Employees Co-Ownership
Association. After Mr. Foley and Mr. Nieman became acquainted,
Mr. Nieman asked Mr. Foley to join HACECA's board, which he
agreed to. HACECA is neither a party to, nor an associate in
this solicitation. However, in response to SEC guidance, HACECA
is listed below as a participant.
Mr. Nieman traveled to Tucson, Arizona in March 2002. Mr. Foley
introduced Mr. Nieman to Robert C. Osborne, MD during this
visit. Sharing similar interests in employee ownership, these
three men agreed to work to build a resource of information and
assistance to promote responsible exercise of employee ownership
shareholder rights. Under that premise, they formed OUR
(Ownership Union), which was certified by the U.S. Dept. of
Labor in June 2002. OUR is neither a party to, nor an associate
in or participant in the solicitation.
In the fall of 2002 at the request of Mr. Nieman, Dr. Osborne
and Mr. Foley agreed to accept nomination for election to the
board of directors of the company.
PARTICIPANTS IN THE SOLICITATION
Steve Nieman, Richard D. Foley and Robert C. Osborne MD are
participants in the solicitation. Neither Mr. Foley nor Dr.
Osborne owns any of the company's stock. Only Mr. Nieman owns
stock, a total of approximately 750 shares, bought through
various Company stock-buying plans over the last 20 years.
Neither Richard D. Foley, Steve Nieman or Dr. Osborne has any
family relationship with any of the officers or directors of the
company, nor are they parties to, or in any way involved in any
securities litigation involving the company, or any other
registrant. None of them are promoters or control persons.
None of them have been in involved in any bankruptcy petitions
or proceedings. None of them have been involved in any type of
transaction or any other type of business relationship with the
company, other than Mr. Nieman's employment as a pilot with
Horizon Air. None of them have been involved in any
solicitation of any registrant within the last five years. None
of them have received any payment or income, other than Mr.
Nieman's within the normal course of his regular employment.
RICHARD DE WAYNE FOLEY
6040 N. Camino Arturo Tucson, AZ 85718 President & CEO. The
Foley Group ("TFG") November 1989 to present.
Principal business: Consulting; Shareholder services & computer
mapping. TFG was incorporated in November 1989. Please note
that TFG has no corporate involvement with any shareholder
actions at the company; nor are any of its officers, employees
or associates in the company. Mr. Foley and TFG own no shares
of the company either beneficially or in any other manner; nor
do they have any business relationships, past, existing or
contemplated with the AAG; nor any purchase or ownership, the
voting of any proxies, or the withholding of any proxies of the
company's stock.
Founder of OUR (Ownership Union), and serves as Chairman. OUR is
a registered federal labor union started in 2002. Address: Box
602, Brush Prairie, WA 98606.
Mr. Foley has not been convicted in a criminal proceeding
Note: Mr. Foley has agreed to assist several employee
shareholders of the company, including Mr. Steve Nieman, in the
exercise of their shareholder rights to make proposals, and to
serve as a communication coordinator for these shareholders. In
every instance of this assistance, the individual shareholder
retained full control of the action of the exercise of their
shareholder rights. In no case or instance has there been any
contract or agreement wherein Mr. Foley would be paid or receive
any compensation of any kind by or from any of these
shareholders or any other parties. The limited proxy by these
shareholders did not include any voting rights, and it was
limited to assisting in the preparing and presentation of
shareholder proposals to the company, and follow up with any
necessary revisions. With the single exception of Mr. Nieman,
none of the other shareholders assisted by Mr. Foley are
associated in any way with this contest or any solicitation of
proxies for votes at the Company's 2003 annual meeting and
election of directors.
STEVE NIEMAN
Pilot for Horizon Air since December 1978. Address: Horizon Air
8070 N.E. Air Trans Way Portland, OR 97218
Home Address: 15204 NE 181st Loop, Brush Prairie, WA 98606.
Phone: (360) 687-3187.
President of the Horizon/Alaska Customers/Employees Co-Ownership
Association, a non-profit incorporated Aug. 2000 in Washington
state--Address: Box 602, Brush Prairie, WA 98606. Founder of OUR
(Ownership Union), which is a registered U.S. federal labor
union started in 2002--Address: Box 602, Brush Prairie, WA
98606.
Mr. Nieman has not been convicted in a criminal proceeding
Mr. Nieman knows many employee shareholders of the registrant.
Mr. Nieman is associated with Dr Osborne and Richard D. Foley in
only non-profit organizations.
Steve Nieman is not a "significant employee" of the Company as
described in the SEC regulations S-K.
Robert C. Osborne, MD
Osborne Anesthesia Services. Address: 800 N. Swan Rd. Suite 114
Tucson, AZ 85711. Phone (520) 319-2093.
Dr. Osborne is 58 years old. He is a physician in private
practice.
Founder of OUR (Ownership Union), and Secretary/Treasurer. OUR
is a registered federal labor union started in 2002. Address:
Box 602, Brush Prairie, WA 98606.
Mr. Osborne has not been convicted in a criminal proceeding
THE HORIZON/ALASKA CUSTOMERS/EMPLOPYEES CO-OWNERSHIP
ASSOCIATION, INC. ("HACECA") was founded by Steve Nieman. It is
a non-profit organization formed to promote better understanding
and cooperation between employees, customers and shareholders.
As a method of addressing the varied and sometimes conflicting
interests of these groups, HACECA chose to define relationships
between the three on a conceptual basis revolving around
expanding ownership. In various writings at various times
appearing on a number of pages on the HACECA web site
www.eahop.org, arguments are presented advocating a
restructuring of ownership designs of the company through a
unique form of sale. A more common term to which HACECA may be
understood would be an ESOP or employee stock ownership plan
purchase of a company. However, HACECA also advocates including
customers and regular stock market investors participating in a
more formulated and power-balanced ownership structure. Thus,
all writings associated with HACECA should be understood as an
expression of a business philosophy goal, rather than as
applying to a specific sale or offer to purchase the AAG.
None of the HACECA_s materials is related to any specific
proposed sale of the Company. HACECA owns no stock in the
company. It has not contributed any money or any assistance to
this solicitation.
HACECA has no family relationship with any of the officers or
directors of the company, nor is it a party to or in any way
involved in any securities litigation involving the company or
any other registrant. It is not a promoter or control person.
It has not been in involved in any bankruptcy petitions or
proceedings. It has not been involved in any type of
transaction or any other type of business relationship with the
company. It has not been involved in any solicitation of any
registrant within the last five years. It has not received any
payment or income from the company except for $1,000 that
Horizon Air donated to it in Nov. 2000. It is not an employee
of the Company, nor had any contractual relationship with the
Company. It has never been a party to any legal action civil or
criminal. Several abbreviations which appear on HACECA's web
site such as EAHSOP and CSOPAH stand for Employees
Alaska/Horizon Stock Ownership Plan and Customer Stock Ownership
Plan Alaska/Horizon. A term which may be more common and which
relates to these types of business relationships is "Co-ops."
All refer to various types of ownership structures.
PROPOSALS
For additional information on the following proposals, we direct
you to the Company's Proxy Statement.
PROPOSAL NO. 1 ELECTION OF DIRECTORS
The challenger candidates have consented to be named in this
proxy, and to serve if elected. The challenger nominees are:
Mr. Richard De Wayne Foley
Mr. Stephen Nieman
Robert C. Osborne, MD
The AAG_s Board of Director nominees are:
Mr. Bruce R. Kennedy
Mr. Jessie J. Knight, Jr.
Mr. J. Kenneth Thompson
FURTHER MATTERS
IF MR. NIEMAN, MR. FOLEY AND DR. OSBORNE WIN SEATS IN THIS
ELECTION, none plan to pledge or sign loyalty oaths that might
be requested by the incumbent board. The challengers believe
that their duties to shareholders are adequately detailed in
law. Further, their duties are not subject to any additional
modification or interpretation by the incumbent board. The
challengers will interpret their victory as a mandate from
shareholders to assist in a reorientation of the company.
Because they are privy to information regarding this
solicitation that other shareholders are not, there might be
some who feel it would be improper for Mr. Foley and Dr. Osborne
to buy stock. Therefore, they will wait until after the
shareholders meeting to purchase shares.
Regarding Mr. Nieman_s proposal to authorize an auction of the
company: IF THE RESOLUTION PASSES, it will send a conclusive
signal that the Board should take action to address this issue.
IF THE RESOLUTION FAILS, it could be interpreted as a "vote of
confidence" in management.
The CHALLENGERS have formulated no specific plans to sell the
Company. They have not conducted any specific analysis of
issues, conditions or financial evaluations necessary to
effectuate a sale of the Company. The position they have taken
about a sale has more to do with setting a goal for positive
changes in the Company rather than completing a specific sale to
any buyer.
However, please note in Mr. Nieman's proposal in the Company's
proxy statement on page 33 PROPOSAL 4 "STOCKHOLDER PROPOSAL ON
SELLING THE COMPANY," third paragraph under the heading of
PROPONENT'S SUPPORTING STATEMENT: "HOWEVER, I BELIEVE THAT THE
HIGHEST BID WILL INCLUDE THE MEANINGFUL, SUBSTANTIAL, DIRECT,
FAIR AND EQUAL PARTICIPATION OF ALL EMPLOYEES OF AAG, AS AAG
EMPLOYEES OWN, IF NOT THE LARGEST, THEN CERTAINLY ONE OF THE
LARGEST BLOCKS OF AAG STOCK OUTSIDE OF INSTITUTIONAL
OWNERSHIP(1)."
We reference this because we believe that it expresses the
essence of the goal for which the proposal was made and the
reason for our efforts to bring these proxy materials to the
shareholders. We believe that the employees have not only their
money invested in the company, but also their lives. We believe
that the relationship between employees and the Company must be
reshaped to provide new flexibility demanded by a market in an
accelerating rate of change.
IF THE CHALLENGERS ARE NOT ELECTED, they plan to continue to
exercise their First Amendment rights of free speech regarding
beliefs they hold. The CHALLENGERS support growing alliances
between stockholders, employees and customers.
THE FULL DETAILS OF THE FOLLOWING SHAREHOLDER PROPOSALS CAN BE
FOUND IN THE COMPANY'S PROXY STATEMENT BEGINNING ON PAGE 30 AND
RUNNING THROUGH PAGE 42. IT IS HEREBY INCORPORATED BY
REFERENCE.
PROPOSAL NO. 2 AMEND THE CERTIFICATE OF INCORPORATION TO
ELIMINATE THE 80% SUPER-MAJORITY VOTING REQUIREMENT
RECOMMEND A VOTE FOR PROPOSAL 2.
PROPOSAL NO. 3 STOCKHOLDER PROPOSAL ON SIMPLE-MAJORITY VOTE--
RECOMMEND A VOTE FOR PROPOSAL 3.
PROPOSAL NO. 4 STOCKHOLDER PROPOSAL ON SALE OF THE COMPANY--
RECOMMEND A VOTE FOR PROPOSAL 4.
PROPOSAL NO. 5 STOCKHOLDER PROPOSAL ON ANNUAL ELECTION OF EACH
DIRECTOR--RECOMMEND A VOTE FOR PROPOSAL 5.
PROPOSAL NO. 6 STOCKHOLDER PROPOSAL ON STOCKHOLDER RIGHTS PLAN--
RECOMMEND A VOTE FOR PROPOSAL 6.
PROPOSAL NO. 7 STOCKHOLDER PROPOSAL ON AN INDEPENDENT BOARD
CHAIRMAN--RECOMMEND A VOTE FOR PROPOSAL 7.
PROPOSAL NO. 8 STOCKHOLDER PROPOSAL ON EXPENSING STOCK OPTIONS--
RECOMMEND A VOTE FOR PROPOSAL 8.
PROPOSAL NO. 9 STOCKHOLDER PROPOSAL ON REPORTING EMPLOYEE STOCK
OWNERSHIP--RECOMMEND A VOTE FOR PROPOSAL 9.
PROXY CARD
The filling out with the required and necessary personal
information and submission of this Proxy Card is voluntary.
Voter Control Number _______________________________________
The undersigned hereby appoints Steve Nieman and Richard Foley
proxy, with full power of substitution, to vote with the same
force and effect as the undersigned at the Annual Meeting of the
Stockholders of the Alaska Air Group, Inc. to be held at the
William M. Allen Theater at The Museum of Flight, 9404 E.
Marginal Way South, Seattle, Washington at 2 p.m. on May 20,
2003, and any adjournment or postponement thereof, upon the
matters set forth herein and upon such other matters as may
properly come before the meeting, all in accordance with the
notice and accompanying proxy statement for said meeting,
receipt of which is acknowledged.
(THIS PROXY REVOKES ALL PRIOR PROXIES GIVEN BY THE UNDERSIGNED.)
This proxy, when properly executed, will be voted in the manner
directed herein. Please date, sign and send your proxy card back
today.
When completed and signed, this proxy/voting instruction form
will be voted as you have directed. If no direction is given, it
will be voted FOR ALL OF THE CHALLENGER NOMINEES (nominee
numbers 01/02/03) in Proposal 1, and FOR Proposals 2 through 9.
Proposal No. 1: Election of Directors. Nominees:
(01) (01) Richard D. Foley
(02) (02) Stephen Nieman
(03) (03) Robert C. Osborne, MD
(04)
FOR ________________________________________________________
WITHHOLD
____________________________________________________________
THE FULL DETAILS OF THE FOLLOWING SHAREHOLDER PROPOSALS CAN BE
FOUND IN THE COMPANY'S PROXY STATEMENT BEGINNING ON PAGE 30 AND
RUNNING THROUGH PAGE 42 AND IS HEREBY INCORPORATED BY
REFERENCE.
FOR AGAINST ABSTAIN No. 2 AMEND THE CERTIFICATE OF INCORPORATION
TO ELIMINATE THE 80% SUPER-MAJORITY VOTING REQUIREMENT/ / / / /
/ Recommend vote FOR Proposal 2. If no direction is given, the
proxy will be voted FOR Proposal 2.
FOR AGAINST ABSTAIN No. 3 STOCKHOLDER PROPOSAL ON SIMPLE-
MAJORITY VOTE/ / / / / / Recommend vote FOR Proposal 3. If no
direction is given, the proxy will be voted FOR Proposal 3.
FOR AGAINST ABSTAIN No. 4 STOCKHOLDER PROPOSAL ON SALE OF THE
COMPANY/ / / / / / Recommend vote FOR Proposal 4. If no
direction is given, the proxy will be voted FOR Proposal 4.
FOR AGAINST ABSTAIN No. 5 STOCKHOLDER PROPOSAL ON ANNUAL
ELECTION OF EACH DIRECTOR/ / / / / / Recommend vote FOR Proposal
5. If no direction is given, the proxy will be voted FOR
Proposal 5.
FOR AGAINST ABSTAIN No. 6 STOCKHOLDER PROPOSAL ON STOCKHOLDER
RIGHTS PLANS/ / / / / / Recommend vote FOR Proposal 6. If no
direction is given, the proxy will be voted FOR Proposal 6.
FOR AGAINST ABSTAIN No. 7 STOCKHOLDER PROPOSAL ON AN INDEPENDENT
BOARD CHAIRMAN/ / / / / / Recommend vote FOR Proposal 7. If no
direction is given, the proxy will be voted FOR Proposal 7.
FOR AGAINST ABSTAIN No. 8 STOCKHOLDER PROPOSAL ON EXPENSING
STOCK OPTIONS/ / / / / / Recommend vote FOR Proposal 8. If no
direction is given, the proxy will be voted FOR Proposal 8.
FOR AGAINST ABSTAIN No. 9 STOCKHOLDER PROPOSAL ON REPORTING
EMPLOYEE STOCK OWNERSHIP/ / / / / / Recommend vote FOR Proposal
9. If no direction is given, the proxy will be voted FOR
Proposal 9.
*Note* In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting
or at any adjournments or postponements thereof. PLEASE SIGN,
DATE AND RETURN TODAY. DATE -----------------, 2003
Signature --------------------- Signature ----------------------
Title(s) ------------------------ NOTE: Please sign exactly as
name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.