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.

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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
any salary, wages, bonuses, accrued vacation, commissions, severance benefits,
and any and all other benefits due to Executive.

15. No Assignments. Executive warrants and represents that he has not heretofore
assigned or transferred to any person not a party to this Agreement any released
matter or any part or portion thereof and shall defend, indemnify and hold
harmless Releasees from and against any claim (including the payment of
attorneys’ fees and costs actually incurred whether or not litigation is
commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed.

16. No Disparagement. Executive agrees that he shall not make any disparaging,
uncomplimentary or negative remarks about Alaska, AAG, or their products,
business affairs or employees.

17. End of Employment Relationship. Executive and Alaska acknowledge that any
employment relationship between them shall terminate on the Retirement Date, and
that they will have no continuing contractual relationship except as expressly
provided in this Agreement. Executive acknowledges that the Change of Control
Agreement between Executive and Company dated September 11, 2000 shall terminate
on the Retirement Date.

18. Taxes. Executive agrees that he shall be exclusively liable for the payment
of all federal and state taxes which may be due as the result of the
consideration received herein and hereby represents that he shall make payments
on such taxes at the time and in the amount required of him. In addition,
Executive hereby agrees fully to defend, indemnify and hold harmless Releasees
and each of them from payment of taxes, interest and/or penalties that are
required of them by any government agency at any time as the result of payment
of the consideration set forth herein.

 

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19. Entire Agreement. This instrument constitutes and contains the entire
agreement and final understanding concerning Executive’s employment, voluntary
retirement from the same and the other subject matters addressed herein between
the parties. It is intended by the parties as a complete and exclusive statement
of the terms of their agreement. It supersedes and replaces all prior
negotiations and all agreements proposed or otherwise, whether written or oral,
concerning the subject matters hereof. Any representation, promise or agreement
not specifically included in this Agreement shall not be binding upon or
enforceable against either party. This is a fully integrated agreement.

20. Revocation. Either Executive or Alaska may revoke this Agreement in its
entirety during the seven (7) days following execution of the Agreement by
Executive. Any revocation of the Agreement must be in writing and hand-delivered
during the revocation period. This Agreement will become effective and
enforceable seven (7) days following execution by Executive, unless it is
revoked during the seven-day period. If so revoked during such period, this
Agreement and the Consulting Agreement shall be null and void in their entirety.

21. Severability. If any provision of this Agreement or the application thereof
is held invalid, such invalidity shall not affect other provisions or
applications of the Agreement which can be given effect without the invalid
provisions or applications and to this end the provisions of this Agreement are
declared to be severable.

22. Washington Law Governs. This Agreement shall be deemed to have been executed
and delivered within the State of Washington, and the rights and obligations of
the parties hereunder shall be construed and enforced in accordance with, and
governed by, the laws of the State of Washington without regard to principles of
conflict of laws.

23. Execution in Counterparts. This Agreement may be executed in counterparts,
and each counterpart, when executed, shall have the efficacy of a signed
original. Photographic copies of such signed counterparts may be used in lieu of
the originals for any purpose.

24. Binding Arbitration of Disputes. Any dispute or controversy between
Executive, on the one hand, and Alaska (or any other Releasee), on the other
hand, in any way arising out of, related to, or connected with this Agreement or
the subject matter thereof, or otherwise in any way arising out of, related to,
or connected with Executive’s employment with Alaska or the conclusion of
Executive’s employment with Alaska, shall be resolved through final and binding
arbitration before an arbitrator in King County, Washington. The arbitrator
shall be selected by mutual agreement of the parties; if none, then by striking
from a panel of seven arbitrators provided by the American Arbitration
Association. By entering into this agreement to arbitrate, the parties
voluntarily waive any right to have covered disputes decided by a court of law
and/or jury. In the event of such arbitration, the prevailing party shall be
entitled to recover all reasonable costs and

 

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expenses incurred by such party in connection therewith, including attorneys’
fees. The nonprevailing party shall also be solely responsible for all costs of
the arbitration, including, but not limited to, the arbitrator’s fees, court
reporter fees, and any and all other administrative costs of the arbitration,
and promptly shall reimburse the prevailing party for any portion of such costs
previously paid by the prevailing party. Any dispute as to the reasonableness of
costs and expenses shall be determined by the arbitrator.

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, and 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 an
award as required by applicable law. Any court proceedings relating to the
arbitration hereunder, including, without limiting the generality of the
foregoing, to prevent or compel arbitration or to confirm, correct, vacate or
otherwise enforce an arbitration award, shall be filed under seal with the
court, to the extent permitted by law.

25. Notice. All notices given hereunder (except for notices of revocation
pursuant to paragraph 20 above) shall be given in writing, shall specifically
refer to this Agreement, and shall be personally delivered or sent by telecopy
or other electronic facsimile transmission or by 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:    Kevin Finan     

6416 – 163rd Place SE

Bellevue, Washington 98006

  If to Alaska:    Alaska Airlines, Inc.      Attn: Chief Executive Officer     

19300 Pacific Highway South

Seattle, WA 98188

     Fax: (206) 431-3819

If notice is mailed, such notice shall be effective upon mailing, or if notice
is personally delivered or sent by telecopy or other electronic facsimile
transmission, it shall be effective upon receipt.

 

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26. Limitations on Waiver. No waiver of any breach of any term or provision of
this Agreement shall be construed to be, or shall be, a waiver of any other
breach of this Agreement. No waiver shall be binding unless in writing and
signed by the party waiving the breach.

27. Legal Counsel. Each party recognizes that this is a legally binding contract
and acknowledges and agrees that they have had the opportunity to consult with
legal counsel of their choice. Executive agrees and acknowledges that he has
read and understands this Agreement, is entering into it freely and voluntarily,
and has been advised to seek counsel prior to entering into this Agreement and
has had ample opportunity to do so.

28. Section 409A. Notwithstanding any provision of this Agreement to the
contrary, if Executive is a “specified employee” as defined in Section 409A of
the Internal Revenue Code (“Code Section 409A”), Executive shall not be entitled
to any payments upon a separation of his service until the earlier of (i) the
date which is six (6) months after his separation from service for any reason
other than death, or (ii) the date of Executive’s death. Furthermore, with
regard to any benefit to be provided upon a termination of employment, to the
extent required by Code Section 409A, Executive shall pay the premium for such
benefit during the aforesaid period and be reimbursed by Alaska therefore
promptly after the end of such period. Any amounts otherwise payable to
Executive following a termination of his employment that are not so paid by
reason of this Section 26(a) shall be paid as soon as practicable after the date
that is six (6) months after Executive’s separation from service (or, if
earlier, the date of the Executive’s death). The provisions of this
Section 26(a) shall only apply if, and to the extent, required to comply with
Code Section 409A and avoid the imputation of tax, interest or penalties
thereunder.

It is the intent of the parties that no payment or benefit pursuant to this
Agreement will be subject to any tax, interest or penalty pursuant to Code
Section 409A and this Agreement shall be construed and interpreted consistent
with that intent.

 

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I have read the foregoing Agreement and I accept and agree to the provisions it
contains and hereby execute it voluntarily with full understanding of its
consequences.

I declare under penalty of perjury under the laws of the State of Washington
that the foregoing is true and correct.

EXECUTED this              day of April, 2007 at King County, Washington.

 

/s/ Kevin Finan

 

Kevin Finan

 

EXECUTED this              day of April 2007 at King County, Washington.

 

ALASKA AIRLINES, INC.

By  

 

  , Its  

 

 

 

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EXHIBIT A

Date:                     

William S. Ayer

Chairman, President and Chief Executive Officer

Alaska Airlines, Inc.

19300 International Blvd.

Seattle, Washington 98188

Dear Bill:

This is to advise you that, effective January 1, 2008, I hereby voluntarily
retire from my position as Executive Vice President/Strategic Projects and any
other capacity with Alaska Airlines, Inc.

Sincerely yours,

 

/s/ Kevin Finan

  Kevin Finan  

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EXHIBIT B

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT for independent contractor consulting services
(“Consulting Agreement”) is made and entered into as of                     , by
and between Alaska Airlines, Inc. (the “Company”), a corporation, and Kevin
Finan (the “Contractor”), an individual.

IT IS AGREED:

1. Independent Contractor Relationship. In accordance with the mutual intentions
of the Company and the Contractor, this Consulting Agreement establishes between
them an independent contractor relationship, and all of the terms and conditions
of this Consulting Agreement shall be interpreted in light of that relationship.
There is no intention to create by this Consulting Agreement an
employer-employee relationship or for Contractor to participate in any benefits
offered to active employees of the Company.

2. Term. The Contractor shall provide services from January 2, 2008 through
January 1, 2009; provided, however, that the Contractor shall not be obligated
to perform should Contractor become physically or mentally disabled from doing
so.

3. Amount of Service. It is understood by the parties that the Company does not
have the exclusive right to the Contractor’s services. It is understood and
agreed, however, that the Company has the right (although it has no obligation)
to use and the Contractor shall provide services for up to 30 days during the
term specified in Section 2 to be rendered at mutually agreeable times and
places and so as not to interfere unreasonably with other consulting or
employment of the Contractor. The Contractor warrants and represents that there
is no conflict of interest in the Contractor’s other contracts for services or
other employment, if any, with the services to be provided pursuant to this
Consulting Agreement and that the Contractor will ensure that no such conflict
arises during the term of this Consulting Agreement (which includes but is in no
way limited to use of another’s confidential and proprietary information).

4. Conflict of Interest Prohibited. It is also understood that, during the term
of this Consulting Agreement, the Contractor may not consult, work or serve in
any capacity for (1) another person or entity which intends to operate or does
operate in any business in competition with the Company or (2) any past, current
or future customer of the Company. The Contractor further acknowledges that he
will comply with the terms of Sections 10, 11, 12 and 13 of the Employment,
Retirement and Non-compete Agreement entered into between Consultant and the
Company on or about the date hereof (the “Retirement Agreement”).

5. Type of Service. The Company will purchase from the Contractor, and the
Contractor will sell to the Company, any services reasonably requested by the
Company,

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including services related to the transition of his former duties as an employee
of the Company. William S. Ayer (or his successor) is the only person authorized
to request the Contractor’s services.

6. Payment. During the term of this Consulting Agreement, the Company shall pay
to the Contractor for his services (and will so pay even if it chooses not to
exercise its right to use his services) a fee of $276,000 payable as follows:
$69,000 on April 1, 2008; $69,000 on July 1, 2008; $69,000 on October 1, 2008;
and $69,000 on January 1, 2009. In addition, Contractor shall be entitled to
unlimited, positive space travel on Alaska Airlines for his personal and
business travel during the term of this agreement. Contractor shall be
responsible for all taxes incurred as a result of such travel. This payment
herein provided shall constitute full payment for the Contractor’s services to
the Company during the term of this Consulting Agreement, and the Contractor
shall not receive any additional benefits or compensation for consulting
services, except that the Company will reimburse the Contractor for reasonable
and customary expenses incurred at the Company’s request in connection with such
consulting. All such costs and expenses shall be itemized by statement and each
statement shall be accompanied by substantiating bills or vouchers. Air travel
will be first class when available.

7. Contractor Responsible for its Agents and Employees. The Contractor shall
select and shall have full and complete control of and responsibility for all
agents, employees and subcontractors, if any, employed or used by the Contractor
and for the conduct of the Contractor’s independent business and none of said
agents, employees or subcontractors shall be, or shall be deemed to be, the
agent, employee or subcontractor of the Company for any purpose whatsoever, and
the Company shall have no duty, liability or responsibility, of any kind, to or
for the acts or omissions of Contractor or such agents, employees or
subcontractors, or any of them. Contractor agrees to defend, indemnify and hold
the Company harmless from and with respect to any and all claims of any kind
based on any act or omission of the Contractor or Contractor’s agents, employees
or subcontractors.

8. Contractor Responsible for Taxes and Indemnification. Without limiting any of
the foregoing, the Contractor agrees to accept exclusive liability for the
payment of taxes or contributions for unemployment insurance or pensions or
annuities or social security payments which are measured by the wages, salaries
or other remuneration paid to the Contractor or the employees of the Contractor,
if any, and to reimburse and indemnify the Company for such taxes or
contributions or penalties which the Company may be compelled to pay. The
Contractor also agrees to comply with all valid administrative regulations
respecting the assumption of liability for such taxes and contributions.

 

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9. Means and Methods. The Contractor agrees to furnish personal services as
provided herein as an independent contractor using the Contractor’s own means
and methods.

10. Contractor Work Product Owned by Company. All writings, plans and other
information developed under this Consulting Agreement, of whatever type relating
to the work performed under this Consulting Agreement, shall be the exclusive
property of the Company.

11. Confidentiality. The Contractor agrees that all data and information about
the Company’s business, plans, finances, plants, equipment, processes and
methods of operation disclosed to, acquired by or developed by the Contractor
during performance of the work hereunder is and shall remain the exclusive
property of the Company. Except for such information and data as can be proven
by the Contractor to be in or to have entered the public domain through no fault
of the Contractor or to have been in the Contractor’s possession prior to
disclosure to the Contractor by the Company and/or the performance of
Contractor’s services hereunder, Contractor shall during the term of the
Consulting Agreement and thereafter in perpetuity maintain as confidential and
not disclose to third parties or otherwise use, and will enjoin the Contractor’s
employees, agents or subcontractors (as applicable) from using, such information
except as duly authorized in the conduct of the Company’s business or as
otherwise authorized in advance in writing. The Contractor agrees that such data
and information shall be used by the Contractor solely for the purpose of
performing services for the Company and not for the benefit of any other person
or entity whatsoever.

12. Termination by Death. This Consulting Agreement shall automatically
terminate upon the Contractor’s death. In such event, the Company shall be
obligated to pay the Contractor’s estate or beneficiaries only the accrued but
unpaid fees and expenses due as of the date of death.

13. No Assignments by Contractor. The Contractor shall not assign or transfer
any rights under this Consulting Agreement without the Company’s prior written
consent, and any attempt of assignment or transfer without such consent shall be
void.

14. Washington Law Governs. This Consulting Agreement shall be deemed to have
been executed and delivered within the State of Washington, and the rights and
obligations of the parties hereunder shall be construed and enforced in
accordance with, and governed by, the laws of the State of Washington without
regard to principles of conflict of laws.

15. Severability. If any provision of this Consulting Agreement or the
application thereof is held invalid, the invalidity shall not affect other
provisions or applications of the Consulting Agreement which can be given effect
without the invalid provisions or applications and, to this end, the provisions
of this Consulting Agreement are declared to be severable.

 

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16. Waiver of Breach. No waiver of any breach of any term or provision of this
Consulting Agreement shall be construed to be, or shall be, a waiver of any
other breach of this Consulting Agreement. No waiver shall be binding unless in
writing and signed by the party waiving the breach.

17. Notice. All notices given hereunder shall be given in writing, shall
specifically refer to this Consulting Agreement, and shall be personally
delivered or sent by telecopy or other electronic facsimile transmission or by
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:   Kevin Finan       6416 –163rd Place SE      
Bellevue, Washington 98006     If to Alaska:   Alaska Airlines, Inc.       Attn:
Chief Executive Officer     19300 Pacific Highway South     Seattle, WA 98188  
  Fax: (206) 431-3819

If notice is mailed, such notice shall be effective upon mailing, or if notice
is personally delivered or sent by telecopy or other electronic facsimile
transmission, it shall be effective upon receipt.

18. Compliance with Law. The Contractor shall comply with any and all applicable
laws and regulations including but not limited to health, safety and security
rules and regulations which are now in effect or which may become applicable.

19. Arbitration of Disputes. Any controversy or claim arising out of or relating
to this Consulting Agreement, its enforcement or interpretation, or because of
an alleged breach, default, or misrepresentation in connection with any of its
provisions, shall be submitted to final and binding arbitration, to be held in
King County, Washington. The arbitrator shall be selected by mutual agreement of
the parties; if none, then by striking from a panel of seven arbitrators
provided by the American Arbitration Association. By entering into this
agreement to arbitrate, the parties voluntarily waive any right to have covered
disputes decided by a court of law and/or jury. In the event either party
institutes arbitration under this Consulting Agreement, the party prevailing in
any such arbitration shall be entitled, in addition to all other relief, to
reasonable attorneys’ fees relating to such arbitration. The nonprevailing party
shall be responsible for all costs of the arbitration, including but not limited
to, the arbitration fees, court reporter fees, etc.

 

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20. Entire Agreement. This instrument and the Retirement Agreement c constitutes
and contains the entire agreement and final understanding between the parties
covering the services provided by the Contractor. They are intended by the
parties as a complete and exclusive statement of the terms of their agreement.
They supercede all prior negotiations and agreements, proposed or otherwise,
whether written or oral, between the parties concerning services provided by the
Contractor. Any representation, promise or agreement not specifically included
in this Consulting Agreement or the Retirement Agreement shall not be binding
upon or enforceable against either party. This Consulting Agreement (together
with the Retirement Agreement) is a fully integrated document. This Consulting
Agreement may be modified only with a written instrument duly executed by each
of the parties. No person has any authority to make any representation or
promise on behalf of any of the parties not set forth herein or in the
Retirement Agreement and this Consulting Agreement has not been executed in
reliance upon any representations or promises except those contained herein.

21. Headings Not Controlling. Headings are used only for ease of reference and
are not controlling.

EXECUTED this      day of                  2007, at                      County,
Washington.

 

/s/ Kevin Finan

  Kevin Finan  

EXECUTED this      day of                  2007, at                      County,
Washington.

 

ALASKA AIRLINES, INC.

 

By  

 

  , Its  

 

 

 

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EXHIBIT C

ACKNOWLEDGEMENT AND WAIVER

I, Kevin Finan, hereby acknowledge that I was given twenty one (21) days to
consider the foregoing Employment, Retirement and Non-Compete Agreement (the
“Agreement”) and voluntarily chose to sign the Agreement prior to the expiration
of the 21-day period.

I declare under penalty of perjury under the laws of the State of Washington
that the foregoing is true and correct.

EXECUTED this      day of                  2007, at                      County,
Washington.

 

/s/ Kevin Finan

  Kevin Finan