Change of Control Agreement
THIS CHANGE OF CONTROL AGREEMENT (this "Agreement") by and between Alaska Air
Group, Inc., a Delaware corporation ("Air Group"), and NAME (the "Executive") is
hereby entered into effective as of the DATE day of MONTH, YEAR (the "Effective
Date").
The Board of Directors (the "Board") of Air Group has determined that it is in
the best interests of Air Group and its stockholders to ensure that Air Group
and its subsidiaries will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined in Section 3). The Board believes that it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control and to encourage
the Executive's full attention and dedication to Air Group currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
that ensure that the compensation and benefits expectations of the Executive
will be satisfied, are competitive with those of other corporations, and align
the Executive's interests with those of Air Group's stockholders. Therefore, in
order to accomplish these objectives, the Board has caused Air Group to enter
into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.
Term

This Agreement shall be effective as of the Effective Date. This Agreement will
continue in effect through the third anniversary of the Effective Date. However,
upon the first anniversary of the Effective Date and upon each subsequent
anniversary of the Effective Date, the term of this Agreement shall be extended
automatically for one (1) additional year (such that upon the first anniversary
of the Effective Date the term of this Agreement shall be extended through the
fourth anniversary of the Effective Date and so on), unless Air Group delivers
written notice prior to such anniversary of the Effective Date to the Executive
that this Agreement will not be extended or further extended, as the case may
be, and if such notice is given this Agreement will terminate at the end of the
term then in progress.
Notwithstanding the foregoing, in the event a Change of Control occurs during
the original or any extended term of this Agreement, this Agreement will remain
in effect for the longer of: (i) twenty-four (24) months beyond the month in
which such Change of Control occurred; or (ii) until all obligations of Air
Group hereunder have been fulfilled and all benefits required hereunder have
been paid to the Executive. For purposes of clarity, subject to Section 4.1,
benefits shall be payable to the Executive under this Agreement only with
respect to a single Change of Control of Air Group. Accordingly, no Change of
Control after the first Change of Control shall be considered for purposes of
this Agreement.
2.
Certain Definitions

(a)    "Accrued Obligations" is defined in Section 7(a)(i).
(b)    "affiliated company" means any company controlled by, controlling or
under common control with Air Group.
(c)    "Annual Base Salary" is defined in Section 5(b)(i).
(d)    "Annual Bonus" is defined in Section 5(b)(ii).
(e)    "Business Combination" means (i) a reorganization, exchange of
securities, merger or consolidation involving Air Group or (ii) the sale or
other disposition of all or substantially all the assets of Air Group.
(f)    "Cause" means basis for termination for reason of admission by the
Executive or substantiation by the Employer of:

--------------------------------------------------------------------------------

(i)
embezzlement, dishonesty or other fraud, conviction of a felony or conspiracy
against the Employer; or

(ii)
if prior to a Change of Control, any willful or intentional injury to either the
Employer, its property, or its employees in connection with the business affairs
of the Employer.

(g)    "Change of Control Date" means the first date (if any) during the term of
this Agreement (determined in accordance with Section 1) on which a Change of
Control occurs. Anything in this Agreement to the contrary notwithstanding, if a
Change of Control occurs and if the Executive's employment with the Employer is
terminated within six (6) months prior to the Change of Control Date, and if it
is reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control or (ii) otherwise arose in connection
with or anticipation of the Change of Control, then for all purposes of this
Agreement the "Change of Control Date" shall mean the date immediately prior to
the date of such termination of employment.
(h)    "Code" means the Internal Revenue Code of 1986, as amended.
(i)    "Employer" means, collectively, Air Group and any of its subsidiaries
that employs the Executive.
(j)    "Employment Period" is defined in Section 4.
(k)    "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(l)    "Good Reason Separation" means the Executive's voluntary Separation from
Service within two years after the occurrence without the Executive's consent of
one or more of the following events:
(i)
the material reduction in the Executive's annual base salary;

(ii)
the material diminution or reduction of the Executive's authority, duties, or
responsibilities;

(iii)
a material change in the geographic location at which the Executive must perform
services; or

(iv)
any material breach by the Employer of any other provision of this Agreement;

provided, however, that an Executive shall not be entitled to a Good Reason
Separation unless the Executive shall have furnished written notice to the
Employer of the condition claimed to constitute the basis for the Good Reason
Separation within 90 days of the initial existence of such condition, and the
Employer shall have not remedied such condition within a period of 30 days after
its receipt of such notice from the Executive.
(m)    "Incentive Plan" means Air Group's Management Incentive Plan.
(n)    "Incumbent Director" means a member of the Board who has been either
(i) nominated by a majority of the directors of Air Group then in office or
(ii) appointed by directors so nominated, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a‑11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board.
(o)
"Notice of Termination" is defined in Section 6(a).

(p)    "Person" means any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d) of the Exchange Act).
(q)    "Recent Average Bonus" is defined in Section 5(b)(ii).

--------------------------------------------------------------------------------

(r)    "Retirement Plan" means the Employer's funded pension plan or any
successor plan thereto.
(s)    "Separation from Service" (and its derivatives, such as "Separates from
Service") means a termination of services provided by the Executive to the
Employer, whether such termination of services is voluntary or involuntary, as
determined by the Board in accordance with Section 409A of the Code and Treasury
Regulation Section 1.409A-1(h).
(t) "Welfare Benefit Continuation" is defined in Section 7(b).
3.
Change of Control

For the purpose of this Agreement, a "Change of Control" means the occurrence of
any of the following:
(a)    the consummation of:
(i)
any consolidation or merger of Air Group in which Air Group is not the
continuing or surviving corporation or pursuant to which shares of common stock
of Air Group would be converted into cash, securities or other property, other
than a merger of Air Group in which the holders of common stock of Air Group
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger; or

(ii)
any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of Air Group.

(b)    at any time during a period of twenty-four (24) months, fewer than a
majority of the members of the Board are Incumbent Directors. "Incumbent
Directors" means:
(i)
individuals who constitute the Board at the beginning of such period; and

(ii)
individuals who were nominated or elected by all of, or a committee composed
entirely of, the individuals described in (i); and

(iii)
individuals who were nominated or elected by individuals described in (ii).

(c)
any Person shall, as a result of a tender or exchange offer, open market
purchases, privately-negotiated purchases or otherwise, become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or
indirectly, of the then-outstanding securities of Air Group ordinarily (and
apart from rights accruing under special circumstances) having the right to vote
in the election of members of the Board ("Voting Securities" to be calculated as
provided in paragraph (d) of Rule 13d-3 in the case of rights to acquire common
stock of Air Group) representing 20% or more of the combined voting power of the
then-outstanding Voting Securities.

(d)
approval by the stockholders of Air Group of any plan or proposal for the
liquidation or dissolution of Air Group.

Unless the Board shall determine otherwise, a Change of Control shall not be
deemed to have occurred by reason of any corporate reorganization, merger,
consolidation, transfer of assets, liquidating distribution or other transaction
entered into solely by and between Air Group and any Affiliate thereof, provided
such transaction has been approved by at least two-thirds (2/3) of the Incumbent
Directors (as defined above) then in office and voting.
4.
Employment Period

Air Group hereby agrees to continue the Executive in its employ, and the
Executive hereby agrees to remain in the employ of Air Group, in accordance with
the terms and provisions of this Agreement, for the period commencing on the
Change of Control Date and ending on the [third (new CEO/EVP), second (new AS VP
and QX President),

--------------------------------------------------------------------------------

first (new QX VPs)] anniversary of such date (the "Employment Period"), in an
executive capacity, responsible for, among other things, duties associated with
such capacity, and, subject to the general supervision of the Board as required
by the Delaware General Corporation Law, such other duties and responsibilities
as are not inconsistent with the express terms of this Agreement. Such
employment may be with Air Group or any of its principal operating subsidiaries,
as appropriate to the management structure developed by Air Group. Air Group
agrees that it will not take any action, or make any demands on the Executive,
that may be deemed to arbitrarily, unreasonably or unnecessarily interfere with
the performance of the services to be rendered by the Executive hereunder.
Prior to the Change of Control Date, the Executive's employment with the
Employer is at will.
5.
Terms of Employment

(a)    Position and Duties.
(i)    During the Employment Period, (A) the Executive's position (including
status, offices, titles and reporting requirements), authority, duties and
responsibilities shall be in accordance with Section 4 and (B) the Executive's
services shall be performed within the metropolitan area in which the Executive
was situated immediately prior to the Change of Control Date, except for
required travel in the Employer business to the extent consistent with the
Executive's duties in Section 4.
(ii)    During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Employer and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, or (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Employer in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Change of
Control Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Change of
Control Date shall not thereafter be deemed to interfere with the performance of
the Executive's responsibilities to the Employer.
(b)    Compensation.
(i)    Base Salary. During the Employment Period, the Executive shall receive an
annual base salary ("Annual Base Salary"), which shall be paid in equal
installments in accordance with the regular payroll schedule applicable to
similarly-situated executives, at least equal to 12 times the highest monthly
base salary paid or payable to the Executive by the Employer in respect of the
12‑month period immediately preceding the month in which the Change of Control
Date occurs. For purposes of this Agreement, Annual Base Salary shall not
include any payments by the Employer on the Executive's behalf pursuant to any
incentive, savings or retirement plans, any welfare benefit plans or any fringe
benefit plans, in each case, of the Employer or any affiliated company, of the
type identified in paragraphs (iii) through (vi) of this Section 5(b), or any
reimbursement of expenses by the Employer or any affiliated company in
accordance with paragraph (v) of this Section 5(b), but shall include vacation
pay in accordance with paragraph (viii) of this Section 5(b). During the
Employment Period, the Annual Base Salary shall be reviewed at least annually
and shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary generally awarded in the
ordinary course of business to other peer executives of the Employer and any
affiliated companies. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement.
Annual Base Salary shall not be reduced after any such increase, and the term
Annual Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased.
(ii)    Annual Bonus. In addition to Annual Base Salary, the Executive shall be
awarded, for each fiscal year ending during the Employment Period, an annual
bonus (the "Annual Bonus") in cash at least equal to the greater of (A) the
Executive's target annual bonus (annualized if such target bonus is based on a
period of less than

--------------------------------------------------------------------------------

12 full months) in effect on the Change of Control Date and (B) the average
annualized (for any fiscal year consisting of less than 12 full months or with
respect to which the Executive has been employed by the Employer for less than
12 full months) bonus paid or payable, including by reason of any deferral, to
the Executive by the Employer in respect of the three fiscal years immediately
preceding the fiscal year in which the Change of Control Date occurs (the
"Recent Average Bonus"). Each such Annual Bonus shall be paid between January 1
and March 15 of the year next following the fiscal year for which the Annual
Bonus is awarded, unless the Executive shall elect, pursuant to the terms of the
AAGI Nonqualified Deferred Compensation Plan (or any successor to that plan), to
defer the receipt of such Annual Bonus.
(iii)    Incentive, Savings and Retirement Plans. During the Employment Period,
the Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Employer, but in no event shall such plans, practices,
policies and programs provide the Executive with incentive opportunities
(measured with respect to both regular and special incentive opportunities, to
the extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, that are less favorable, in
the aggregate, than the most favorable of those provided by the Employer for the
Executive under such plans, practices, policies and programs as in effect at any
time during the 90‑day period immediately preceding the Change of Control Date
or, if more favorable to the Executive, those provided generally at any time
after the Change of Control Date to other peer executives of the Employer.
(iv)    Welfare Benefit Plans. During the Employment Period, the Executive
and/or the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Employer (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other peer executives of the
Employer, but in no event shall such plans, practices, policies and programs
provide the Executive with benefits that are less favorable, in the aggregate,
than the most favorable of such plans, practices, policies and programs in
effect for the Executive at any time during the 90‑day period immediately
preceding the Change of Control Date or, if more favorable to the Executive,
those provided generally at any time after the Change of Control Date to other
peer executives of the Employer.
(v)    Expenses. During the Employment Period, the Executive shall be entitled
to reimbursement promptly, but in no event later than the end of the calendar
year following the year in which the expense is incurred, for all reasonable
employment expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Employer in effect for the
Executive at any time during the 90‑day period immediately preceding the Change
of Control Date or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of the Employer.
(vi)    Fringe Benefits. During the Employment Period, the Executive shall be
entitled to fringe benefits in accordance with the most favorable plans,
practices, programs and policies of the Employer in effect for the Executive at
any time during the 90‑day period immediately preceding the Change of Control
Date or, if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Employer. To the extent
that a plan, practice, program, or policy provides for the reimbursement of the
Executive's expenses, such reimbursements shall be made promptly, but in no
event later than the end of the calendar year following the year in which the
expense is incurred.
(vii)    Vacation. During the Employment Period, the Executive shall be entitled
to paid vacation in accordance with the most favorable plans, policies, programs
and practices of the Employer as in effect for the Executive at any time during
the 90‑day period immediately preceding the Change of Control Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Employer.
6.
Termination of Employment

(a)    Termination. The Executive's employment shall terminate automatically
upon the Executive's death during the Employment Period. The Executive's
employment may be terminated at any time during the Employment

--------------------------------------------------------------------------------

Period for any reason by either the Executive or by the Employer, communicated
by a notice of termination to the other party hereto given in accordance with
Section 13(b) (a "Notice of Termination").
(b)    Date of Termination. "Date of Termination" means (i) if the Executive's
employment is terminated by the Employer or by the Executive, the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be, and (ii) if the Executive's employment is terminated by reason of
death, the date of death of the Executive.
7.
Obligations of the Employer Upon Certain Terminations; Release

If the Executive's employment is terminated during the Employment Period by the
Executive in a Good Reason Separation or by the Employer without Cause, and such
termination constitutes a Separation from Service:
(a)    the Employer shall pay to the Executive in a lump sum in cash the
aggregate of the following amounts:
(i)    A lump sum amount equal to all payments to which the Executive would have
been entitled during the Employment Period, but for the Separation from Service,
including, without limitation, the aggregate amounts of the Executive's Annual
Base Salary (calculated in accordance with Section 5(b)(i) hereof) and the
aggregate amounts of the Executive's Annual Bonus (calculated in accordance with
Section 5(b)(ii) hereof), payable in each case during the Employment Period,
less any amounts comprising any portion of Annual Base Salary or Annual Bonus
actually received by the Executive during the period commencing on the Change of
Control Date and ending on the date of such Separation from Service.
(ii)    A separate lump sum supplemental retirement benefit equal to the
difference between (1) the actuarial equivalent (utilizing for this purpose the
actuarial assumptions utilized with respect to the Employer defined benefit
retirement plan during the 90-day period immediately preceding the Change of
Control Date) of the benefits payable under the Employer defined benefit
retirement plans, the 1995 Elected Officers' Supplementary Retirement Plan (or
if applicable to the Executive the Defined Contribution OSRP Plan feature of the
AAGI Nonqualified Deferred Compensation Plan) and any similar plans (other than
the deferred bonus or deferred retention incentive features of the AAGI
Nonqualified Deferred Compensation Plan) providing benefits for the Executive
that the Executive would receive if the Executive's employment continued at the
compensation level provided for in Section 5(b) and for the remainder of the
Employment Period (assuming for this purpose that all accrued benefits are fully
vested and that benefit accrual formulas are no less advantageous to the
Executive than those in effect during the 90-day period immediately preceding
the Change of Control Date), and (2) the actuarial equivalent (utilizing for
this purpose the same assumptions as outlined above) of the Executive's actual
benefit paid (or payable), if any, under the foregoing plans; and
(b)    for the remainder of the Employment Period, or such longer period as any
plan, program, practice or policy may provide, the Employer shall continue
benefits to the Executive and/or the Executive's family at least equal to those
that would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 5(b)(iv) if the Executive had not
incurred a Separation from Service in accordance with the most favorable plans,
practices, programs or policies of the Employer as in effect and applicable
generally to other executives and their families during the 90‑day period
immediately preceding the Change of Control Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Employer and their families; provided, however, that if
the Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer‑provided plan,
the medical and other welfare benefits described herein shall be secondary to
those provided under such other plan during such applicable period of
eligibility (such continuation of such benefits for the applicable period herein
set forth shall be hereinafter referred to as "Welfare Benefit Continuation").
For purposes of determining eligibility of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive shall be
considered to have remained employed until the end of the Employment Period and
to have retired on the last day of such period; provided, however, that the
Executive shall be entitled to the more favorable of the retiree benefits in
effect on the date of the Executive's Separation from Service or the retiree
benefits in effect on the date that would have been the last date of the
Employment

--------------------------------------------------------------------------------

Period if the Executive had remained employed. Notwithstanding anything in this
Section 7(b) to the contrary, in no event shall any health care benefit (whether
for medical, dental, or vision care) that is subject to Code Section 409A be
continued for a period longer than 18 months after the date of the Executive's
Separation from Service;
(c)    to the extent not theretofore paid or provided, the Employer shall timely
pay or provide to the Executive and/or the Executive's family any other amounts
or benefits required to be paid or provided or which the Executive and/or the
Executive's family is eligible to receive pursuant to Section 5(b)(v) and (vi)
of this Agreement under any plan, program, policy or practice or contract or
agreement of the Employer as in effect and applicable generally to other peer
executives and their families during the 90‑day period immediately preceding the
Change of Control Date or, if more favorable to the Executive, as in effect
generally thereafter with respect to other peer executives of the Employer and
their families (such other amounts and benefits shall be hereinafter referred to
as the "Other Benefits"). Notwithstanding anything in this Section 7(c) to the
contrary, in no event shall any Other Benefit be paid to the extent that such
payment would trigger any additional tax, penalty or interest imposed by Code
Section 409A.
(d)    Release. Notwithstanding anything else contained in this Agreement to the
contrary, as a condition precedent to any Employer obligation to the Executive
pursuant to this Section 7, the Executive shall, within 21 days following his or
her Separation from Service with the Employer (and within the period of time
provided for in the release), provide the Employer with a valid, executed
general release agreement in substantially the form attached hereto as Exhibit
A, and such release agreement shall have not been revoked by the Executive
pursuant to any revocation rights afforded by applicable law. The Employer shall
have no obligation to make any payment to the Executive pursuant to this Section
7 unless and until the release agreement contemplated by this Section 7(d)
becomes irrevocable by the Executive in accordance with all applicable laws,
rules and regulations. Notwithstanding the foregoing, the Employer shall provide
the benefits described in Sections 7(b) and 7(c) above following the Executive's
Separation from Service (or Change of Control if Section 7(e) applies) but, if
the Executive does not timely provide the release agreement contemplated by this
Section 7(d) or revokes such release agreement, the Employer shall have no
further obligation to provide the benefits set forth in Section 7(b) or, except
to the extent required under the applicable plan, program or policy, the
benefits set forth in Section 7(c).
(e)    Timing of Payment. The lump sum amount specified in Section 7(a) above
shall be paid in the second calendar month following the month in which the
Separation from Service occurs; provided, however, that if such payment is to be
made pursuant to a termination of employment that occurs prior to a Change of
Control as contemplated by Section 2(g), and provided that the Executive
provides a release agreement as contemplated by Section 7(d) within 21 days
following the Change of Control (and does not revoke such release within any
revocation period provided by applicable law), such payment shall be made in the
month following the month in which the Change of Control occurs and any benefits
to which the Executive may be entitled pursuant to this Section 7 shall commence
with the month in which the Change of Control occurs.
8.
Nonexclusivity of Rights

Nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Employer and for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Employer. Amounts that are vested benefits or
that the Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Employer or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
9.
Full Settlement; Resolution of Disputes

(a)    The Employer obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set‑off, counterclaim, recoupment, defense or other claim, right
or action that the Employer may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement, and, except as provided in
Section 7(b), such amounts shall

--------------------------------------------------------------------------------

not be reduced whether or not the Executive obtains other employment. The
Employer agrees to pay promptly upon invoice, to the full extent permitted by
law, all legal fees and expenses that the Executive may incur as a result of any
contest (regardless of the outcome thereof) by the Employer, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement).
(b)    If there shall be any dispute between the Employer and the Executive
(i) in the event of any termination of the Executive's employment by the
Employer, whether such termination was in connection with or in anticipation of
a Change of Control so as to trigger the Change of Control Date under the
definition of that term in Section 2, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction declaring that such
termination was in connection with or in anticipation of a Change of Control,
the Employer shall pay all amounts, and provide all benefits, to the Executive
and/or the Executive's family or other beneficiaries, as the case may be, that
the Employer would be required to pay or provide pursuant to Section 7 as though
such termination were in connection with or in anticipation of a Change of
Control; provided, however, that the Employer shall not be required to pay any
disputed amounts pursuant to this Section 9(b) except upon receipt of an
undertaking by or on behalf of the Executive to repay all such amounts to which
the Executive is ultimately adjudged by such court not to be entitled.
10.
Certain Adjustments

(a)    Notwithstanding anything else contained in this Agreement, in the event
that the Executive becomes entitled to the payments or other benefits described
in Section 7 hereof and the Executive becomes or would be subject to the tax
imposed by Section 4999 of the Code or any successor provision (the "Excise
Tax") as a result of such payments and benefits and any other payments or
benefits from the Employer required to be taken into account under Code Section
280G(b)(2) (collectively, "Parachute Payments"), the Parachute Payments shall be
reduced (but not below zero) so that the maximum amount of Parachute Payments
(after reduction) is one dollar ($1.00) less than the amount that would cause
the Parachute Payments to be subject to the Excise Tax; provided that such a
reduction shall only be made if and to the extent that a reduction in the
Parachute Payments would result in the Executive retaining a larger amount, on
an after-tax basis (taking into account federal, state and local income taxes
and the Excise Tax), than if the Executive received all of the Parachute
Payments (such reduced amount is referred to hereinafter as the "Limited Benefit
Amount"). Unless the Executive shall have given prior written notice specifying
a different order to Air Group to effectuate the Limited Benefit Amount, any
such notice to be consistent with the requirements of Section 409A of the Code
to avoid the imputation of any tax, penalty or interest thereunder, Air Group
shall reduce or eliminate the Parachute Payments by first reducing or
eliminating any cash severance benefits, then by reducing or eliminating any
accelerated vesting of stock options, then by reducing or eliminating any
accelerated vesting of other equity-based awards, then by reducing or
eliminating any other remaining Parachute Payments. The preceding provisions of
this Section 10(a) shall take precedence over the provisions of any other plan,
arrangement or agreement governing the Executive's rights and entitlements to
any benefits or compensation.
(b)    A determination as to whether the Parachute Payments shall be reduced to
the Limited Benefit Amount pursuant to this Agreement and the amount of such
Limited Benefit Amount shall be made by a certified public accounting or
compensation consulting firm of national reputation (the "Accounting Firm")
which shall provide detailed supporting calculations to both the Employer and
the Executive within 15 business days of the receipt of notice from the
Executive that the Executive has received a payment under Section 7, or such
earlier time as is requested by the Employer. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Employer.
If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written opinion that failure to
report the Excise Tax on the Executive's applicable federal income tax return
would not result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon the Employer and
Executive.

--------------------------------------------------------------------------------

11.
Confidential Information

The Executive shall hold in a fiduciary capacity for the benefit of the Employer
all secret or confidential information, knowledge or data relating to the
Employer or any of its affiliated companies, and their respective businesses,
that shall have been obtained by the Executive during the Executive's employment
by the Employer or any of its affiliated companies and that shall not be or
become public knowledge (other than by acts by the Executive or representatives
of the Executive in violation of this Agreement). After termination of the
Executive's employment with the Employer, the Executive shall not, without the
prior written consent of the Employer or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data to
anyone other than the Employer and those designated by it. In no event shall an
asserted violation of the provisions of this Section 11 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.
12.
Successors

(a)    This Agreement is personal to the Executive and without the prior written
consent of the Employer shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal representatives.
(b)    This Agreement shall inure to the benefit of and be binding on the
Employer and its successors and assigns.
(c)    The Employer will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all the
business and/or assets of the Employer to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Employer would
be required to perform it if no such succession had taken place. As used in this
Agreement, Employer shall mean the Employer as hereinbefore defined and any
successor to its business and/or assets as aforesaid that assumes and agrees to
perform this Agreement by operation of law, or otherwise.
13.
Miscellaneous

(a)    This Agreement shall be governed by and construed in accordance with the
laws of the state of Washington, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b)    All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
                                        
                                                              
                                                              
                                                              
                        
If to Air Group:
Alaska Air Group, Inc.
P.O. Box 68947
Seattle, WA 98168
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

--------------------------------------------------------------------------------

(c)    The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d)    The Employer may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
(e)    The Executive's or the Employer's failure to insist on strict compliance
with any provision hereof or any other provision of this Agreement or the
failure to assert any right the Executive or the Employer may have hereunder,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f)    The Executive and the Employer acknowledge that, except as may otherwise
be provided under any other written agreement between the Executive and the
Employer, the employment of the Executive by the Employer is "at will" and,
prior to the Change of Control Date, may be terminated by either the Executive
or the Employer at any time. Moreover, if prior to the Change of Control Date,
the Executive's employment with the Employer terminates, then the Executive
shall have no further rights under this Agreement.
(g)    This Agreement may be executed in counterparts, each of which
counterparts shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(h)    Section 409A.
(i)    It is intended that any amounts payable under this Agreement and the
Employer's and the Executive's exercise of authority or discretion hereunder
shall either be exempt from or comply with Section 409A of the Code (including
the Treasury regulations and other published guidance relating thereto)
("Section 409A") so as not to subject the Executive to payment of any interest
or additional tax imposed under Section 409A. To the extent that any amount
payable under this Agreement would trigger the additional tax, penalty or
interest imposed by Section 409A, this Agreement shall be modified to avoid such
additional tax, penalty or interest yet preserve (to the nearest extent
reasonably possible) the intended benefit payable to the Executive.
(ii)    Notwithstanding any provision of this Agreement to the contrary, if the
Executive is a "specified employee" (within the meaning of Treasury Regulation
Section 1.409A-1(i)), the Executive shall not be entitled to any payments upon a
termination of the Executive's employment until the earlier of (i) the date
which is six (6) months after the Executive's Separation from Service with the
Employer for any reason other than death, or (ii) the date of the Executive's
death. Furthermore, with regard to any benefit to be provided upon a termination
of employment, to the extent required by Section 409A, the Executive shall pay
the premium for such benefit during the aforesaid period and be reimbursed by
the Employer therefor promptly after the end of such period. Any amounts
otherwise payable to the Executive following a termination of his employment
that are not so paid by reason of this Section 13(h)(ii) shall be paid as soon
as practicable after the date that is six (6) months after the Executive's
Separation from Service (or, if earlier, the date of the Executive's death). The
provisions of this Section 13(h)(ii) shall only apply if, and to the extent,
required to comply with Section 409A.
(iii)    To the extent that any benefits or reimbursements pursuant to this
Agreement are taxable to the Executive, any such benefit or reimbursement
payment due to the Executive pursuant to any such provision shall be paid to the
Executive on or before the last day of the Executive's taxable year following
the taxable year in which the related expense was incurred. The benefits and
reimbursements pursuant to such provisions are not subject to liquidation or
exchange for another benefit and the amount of such benefits and reimbursements
that the Executive receives in one taxable year shall not affect the amount of
such benefits or reimbursements that the Executive receives in any other taxable
year.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to authorization from the Board, Air Group has caused this Agreement to
be executed in its name and on its behalf, all as of the day and year first
above written.
ALASKA AIR GROUP, INC.

By     
Its Chairman (and Chief Executive Officer)
EXECUTIVE

_________________________________
NAME
TITLE
COMPANY

--------------------------------------------------------------------------------

EXHIBIT A
GENERAL RELEASE AGREEMENT
1.    Release. [________________] (the "Executive"), on behalf of himself or
herself, his or her descendants, dependents, heirs, executors, administrators,
assigns, and successors, and each of them, hereby covenants not to sue and fully
releases and discharges Alaska Air Group, Inc. ("Air Group") and each of its
parents, subsidiaries and affiliates, past and present, as well as its and their
trustees, directors, officers, members, managers, partners, agents, attorneys,
insurers, employees, stockholders, representatives, assigns, and successors,
past and present, and each of them (hereinafter together and collectively
referred to as the "Releasees") with respect to and from any and all claims,
wages, demands, rights, liens, agreements or contracts (written or oral),
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 (each,
a "Claim"), which the Executive now owns or holds or has at any time heretofore
owned or held or may in the future own or hold as against any of said Releasees
(including, without limitation, any Claim arising out of or in any way connected
with the Executive's service as an officer, director, employee, member or
manager of any Releasee, the Executive's separation from his or her position as
an officer, director, employee, manager and/or member, as applicable, of any
Releasee, or any other transactions, occurrences, acts or omissions or any loss,
damage or injury whatever), 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 General Release Agreement (this "Agreement"), including, without limiting
the generality of the foregoing, any Claim under Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act, or any other federal, state or
local law, regulation or ordinance; provided, however, that the foregoing
release does not apply to any obligation of the Employer to Executive pursuant
to any of the following: (1) Section 7 of the Change of Control Agreement
between the Executive and Air Group dated as of [_____________] (the "Change of
Control Agreement"); (2) any equity-based awards previously granted by Air Group
to the Executive, to the extent that such awards continue after the termination
of the Executive's employment with Air Group and its subsidiaries in accordance
with the applicable terms of such awards (and subject to any limited period in
which to exercise such awards following such termination of employment); (3) any
right to indemnification that Executive may have pursuant to the Bylaws or
Certificate of Incorporation of Air Group or under any written indemnification
agreement with Air Group (or any of its subsidiaries or affiliates) or under
applicable state law with respect to any loss, damages or expenses (including
but not limited to attorneys' fees to the extent otherwise provided) that the
Executive may in the future incur with respect to his or her service as an
employee, officer or director of Air Group or any of its subsidiaries or
affiliates; (4) with respect to any rights that the Executive may have to
insurance coverage for such losses, damages or expenses under any directors and
officers liability insurance policy of Air Group (or any of its subsidiaries or
affiliates); (5) any rights to continued medical or dental coverage that the
Executive may have under the Consolidated Omnibus Budget Reconciliation Act; or
(6) any rights to payment of the Executive's accrued and vested benefits (if
any) that Executive may have under a retirement plan sponsored or maintained by
Air Group or any of its subsidiaries or affiliates that is intended to qualify
under Section 401(a) of the Internal Revenue Code of 1986, as amended. In
addition, this Release does not cover any Claim that cannot be so released as a
matter of applicable law. The Executive acknowledges and agrees that he or she
has received any and all leave and other benefits that he or she has been and is
entitled to pursuant to the Family and Medical Leave Act of 1993.
2.    Acknowledgement of Payment of Wages. The Executive acknowledges that he or
she has received all amounts owed for his or her regular and usual salary
(including, but not limited to, any bonus or other wages), and usual benefits
through the date of this Agreement.
3.    Unknown Claims. It is the intention of the Executive in executing this
Agreement that the same shall be effective as a bar to each and every Claim
hereinabove specified. The Executive acknowledges that he or she may hereafter
discover Claims or facts in addition to or different from those which the
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, the Executive hereby waives any right, Claim or cause of action
that might arise as a result of such different or additional Claims or facts.
4.    ADEA Waiver. The Executive expressly acknowledges and agrees that by
entering into this Agreement, he or she is waiving any and all rights or claims
that he may have arising under the Age Discrimination in Employment Act of 1967,
as amended ("ADEA"), which have arisen on or before the date of execution of
this Agreement. The Executive further expressly acknowledges and agrees that:
(a)    In return for this Agreement, the Executive will receive consideration
beyond that which he or she was already entitled to receive before entering into
this Agreement;
(b)    The Executive is hereby advised in writing by this Agreement to consult
with an attorney before signing this Agreement;
(c)    The Executive has voluntarily chosen to enter into this Agreement and has
not been forced or pressured in any way to sign it;
(d)    The Executive was given a copy of this Agreement on [____________] and
informed that he or she had twenty-one (21) days within which to consider the
Agreement and that if he or she wished to execute this Agreement prior to
expiration of such 21-day period, he or she should execute the Acknowledgement
and Waiver attached hereto as Exhibit A-1;
(e)    Nothing in this Agreement prevents or precludes the Executive from
challenging or seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent, penalties or
costs from doing so, unless specifically authorized by federal law; and
(f)    The Executive was informed that he or she has seven (7) days following
the date of execution of this Agreement in which to revoke this Agreement, and
this Agreement will become null and void if the Executive elects revocation
during that time. Any revocation must be in writing and must be received by Air
Group during the seven-day revocation period. In the event that the Executive
exercises his or her right of revocation, neither Air Group nor the Executive
will have any obligations under this Agreement.
5.    No Transferred Claims. The Executive warrants and represents that the
Executive 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 he or
she shall defend, indemnify and hold Air Group and each of its subsidiaries and
affiliates harmless 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.
6.    Miscellaneous. The following provisions shall apply for purposes of this
Agreement:
(a)    This Agreement shall be governed by and construed in accordance with the
laws of the state of Washington, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b)     The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(c)    The Executive's or Air Group's failure to insist on strict compliance
with any provision hereof or any other provision of this Agreement or the
failure to assert any right the Executive or Air Group may have hereunder, shall
not be deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.

--------------------------------------------------------------------------------

(d)    This Agreement may be executed in counterparts, each of which
counterparts shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[Remainder of page intentionally left blank]

--------------------------------------------------------------------------------

The undersigned have read and understand the consequences of this Agreement and
voluntarily sign it. The undersigned declare under penalty of perjury under the
laws of the State of Washington that the foregoing is true and correct.

EXECUTED this ________ day of ________ 20____, at ______________________ County,
__________.
EXECUTIVE

                        
[Name]

EXECUTED this ________ day of ________ 20____, at ______________________ County,
__________.

ALASKA AIR GROUP, INC.

By:                         
[Name]
[Title]

--------------------------------------------------------------------------------

EXHIBIT A-1

ACKNOWLEDGMENT AND WAIVER

I, _____________, hereby acknowledge that I was given 21 days to consider the
foregoing General Release Agreement and voluntarily chose to sign the General
Release 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 ____________ 20__, at ___________ County, _________.
                        
[Name]