Exhibit 10.1

AGREEMENT

This Agreement (“Agreement”) is made this 10th day of December 2008 (the
“Effective Date”), by and between Gregg A. Saretsky (“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/Flight & Marketing
of Alaska.

WHEREAS, Alaska and Executive have mutually agreed to continue Executive’s
employment with Alaska on different terms and conditions as hereinafter set
forth and to provide for Executive’s resignation from employment with Alaska.

WHEREAS, this Agreement shall govern the employment relationship between
Executive and Alaska from and after the Effective Date and will supersede and
negate all previous agreements with respect to such relationship.

WHEREAS, Alaska and Executive both desire that Executive should provide
transition consulting services to Alaska for a period of time following his
resignation from Alaska.

NOW, THEREFORE, Alaska and Executive, in consideration of the covenants
undertaken and the releases below, enter into this Agreement:

1. Employment; Resignation.

 

  a. Employment. Alaska hereby employs Executive, and Executive agrees to serve,
as Alaska’s Executive Vice President/Strategic Projects for the period
commencing on the Effective Date and continuing through December 31, 2008 (the
“Separation Date”), on the terms and conditions expressly set forth in this
Agreement. (Such period is referred to herein as the “Period of Employment.”)
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 his 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 (b) searching for other
employment and (c) engaging in charitable or community service activities, so
long as none of the foregoing additional activities materially interfere with
Executive’s duties to Alaska.

 

  b.

Resignation. Executive hereby irrevocably resigns (i) effective as of the
Effective Date, as the Executive Vice President/Flight & Marketing, and
(ii) effective as of the Separation Date, as Executive Vice President/Strategic
Projects of Alaska and as an officer, employee, member, manager, director and in
any other capacity with AAG, Alaska and each of their affiliates. The parties
agree that Executive waives

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any right or claim to reinstatement as an employee of AAG or Alaska and agrees
not to seek employment with AAG, Alaska or any of their affiliates after the
Separation Date. Executive shall have no further employment relationship with
AAG, Alaska or any of their affiliates after the Separation Date. On the
Separation Date, Executive agrees that he shall confirm such resignation by
executing the letter attached as Exhibit A hereto and promptly delivering such
letter to the Company.

2. Compensation. Alaska agrees to pay and Executive agrees to accept in exchange
for the services rendered hereunder by him during the Period of Employment, the
following compensation:

 

  a. Base Salary: Executive’s base salary shall be at an annualized rate of
$280,000 (the “Base Salary”), 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.

 

  b. Officers Supplemental Retirement Plan: Executive shall continue to
participate in the Alaska Air Group, Inc. 1995 Elected Officers Supplementary
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, executive perquisite allowance, and such other
programs as shall be provided from time to time by Alaska for its officers
generally.

 

  d. Equity. Executive shall not participate in any future equity grants or
other incentive awards.

3. 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, subject to the conditions set forth in Section 3(h) below, provide
to Executive the following separation benefits on and following the Separation
Date:

 

  a. Separation Date Payments. On the Separation Date, Executive will receive a
final paycheck representing all unpaid salary earned through the Separation Date
plus a lump sum payment equal to six (6) weeks salary for accrued but unpaid
vacation. Executive will also receive seventeen monthly payments of $23,350 less
applicable taxes and other withholdings. The first installment shall be payable
as soon as practicable after the Supplemental Release Agreement referred to
below becomes irrevocable in accordance with applicable law and in all events
not later than sixty (60) days following Executive’s Separation from Service. As
used herein, a “Separation from Service” occurs when Executive dies, retires, or
otherwise has a termination of employment with Alaska that constitutes a
“separation from service” within the meaning of Treasury Regulation
Section 1.409A-1(h)(1), without regard to the optional alternative definitions
available thereunder.

 

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  b. Performance-Based Pay Plan. Executive will be eligible for a 2008
Performance-Based Pay (“PBP”) payout, if any, based on 2008 base wages earned
through the Separation Date, any such amount to be paid when PBP payments for
2008 are made to Alaska’s other executive officers generally. Executive will not
be eligible to participate in the PBP for 2009.

 

  c. Travel Privileges. Executive shall receive online travel privileges and
Alaska Airlines Boardroom privileges at the same level received by Executive
while an employee through December 31, 2010. All travel privileges referenced in
this paragraph shall cease as of December 31, 2010 except that following
December 31, 2010, Executive shall be considered a retired officer for purposes
of retiree travel and will receive C4/T4 boarding priority as a retiree, and
lifetime top tier status (currently MVP Gold) in Alaska’s frequent flyer
program, per Alaska’s retiree travel policy. Travel privileges shall apply to
Executive as well as his eligible dependants. In addition to the normal purposes
for which such pass travel can be used, it may also be used for the purpose of
consulting with other companies (if allowed under this Agreement and the related
Consulting Agreement attached hereto) and may be used to seek other employment.
Executive shall receive lifetime Alaska Airlines Boardroom privileges. Offline
travel privileges shall cease upon public announcement of Executive’s
resignation or upon Executive’s removal from payroll, whichever occurs first.

 

  d. Outplacement Services. Executive shall be provided $12,000, less applicable
withholdings and taxes, in lieu of outplacement services, such amount to be paid
in a lump sum within twenty (20) days after the Separation Date. The Chief
Executive Officer and Vice President/Human Resources – Strategy, Culture and
Inclusion will discuss Executive’s potential as a candidate for employment with
and will provide a letter of reference to both Executive and to executive
recruiter Michael Bell and other executive recruiters as requested.

 

  e. Health Benefits. At Executive election, which shall be made on or prior to
the Separation Date, Alaska shall either (i) pay Executive, within twenty
(20) days after the Separation Date, a lump sum equal to $36,493.20 or (ii)
continue medical coverage for Executive and his eligible dependents at the
levels in effect as of the Effective Date for the period commencing on the
Separation Date and ending on December 31, 2010.

 

  f. Officer Supplemental Retirement Plan (OSRP). In lieu of Executive’s future
participation in the OSRP and in full satisfaction of any and all of Executive’s
OSRP benefits, Executive shall be paid $275,000 on January 31, 2009 and $275,000
on January 31, 2010, subject in each case to applicable tax withholding.

 

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  g. Equity Awards. Executive shall qualify for “retirement” for purposes of any
of Executive’s equity awards outstanding as of the Separation Date
(notwithstanding the definition of such term under the plan and/or award
agreement that evidences any such award). As of the Separation Date, all
outstanding restricted stock units and options shall be fully vested. Except as
expressly modified by the foregoing sentences, the terms of each equity award
will continue to apply to Executive in his retiree status.

 

  h. Conditions of Severance. Notwithstanding any other provision herein, any
obligation of Alaska or any of its affiliates to Executive pursuant to this
Section 3 or under the Consulting Agreement attached hereto shall be subject to
the condition precedent that Executive shall have provided, upon or not later
than five (5) days after the Separation Date, Alaska with a valid, executed
Supplemental Release Agreement in the form attached hereto as Exhibit B (the
“Supplemental Release Agreement”), and such Supplemental Release Agreement shall
have not been revoked by Executive pursuant to any revocation rights afforded by
applicable law. In addition, if Executive breaches his obligations under
Sections 9, 10, 13 or 15 of this Agreement at any time, from and after the date
of such breach and not in any way in limitation of any right or remedy otherwise
available to Alaska, Executive will no longer be entitled to, and Alaska will no
longer be obligated to pay or provide any remaining unpaid benefit pursuant to
this Section 3 or under the Consulting Agreement; provided that, if Executive
provides the Supplemental Release Agreement contemplated by this Section 3(h),
in no event shall Executive be entitled to aggregate benefits pursuant to this
Section 3 and the Consulting Agreement of less than $5,000, which amount the
parties agree is good and adequate consideration, in and of itself, for
Executive’s release under the Supplemental Release Agreement.

4. Consulting Obligations. Executive agrees to execute the Consulting Agreement
in the form attached hereto as Exhibit C, (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 8(d), the Consulting Agreement shall be null and
void.

5. 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.

6. 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

 

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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
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.

7. 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.

8. 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;

 

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c. He was given a copy of this Agreement on December 10, 2008, and informed that
he had twenty one (21) days within which to consider this Agreement, 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 D;

d. He was informed that he has seven (7) days following the date of execution of
the Agreement in which to revoke the Agreement.

9. 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.

10. Non-Solicitation. Executive shall not, during the Period of Employment and
for a period of fifteen (15) months following the Separation Date, 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 venture partner or supplier of Alaska to do business
or in any way become associated with any Competitor (as defined below).

11. Cooperation with Investigations. Nothing in this Agreement limits, restricts
or precludes either Alaska or Executive from cooperating with any governmental
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.

12. Full Payment of Compensation Due and Owing. Executive agrees that the
payments described in Sections 2 through 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.

13. Non-Competition. Executive agrees that he will not, directly or indirectly,
during the Period of Employment and for a period of fifteen (15) months after
the Separation Date, 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, Frontier Airline Holdings, Jet Blue
Airways Corporation, Southwest Airlines Corporation, Virgin America, UAL
Corporation, and any of their affiliates.

 

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14. 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.

15. No Disparagement. Executive and Alaska agree that neither shall make any
disparaging, uncomplimentary or negative remarks about the other, or in the case
of Executive, about AAG, or the products, business affairs or employees of
Alaska, Horizon Air Industries, Inc. or Alaska Air Group, Inc.

16. End of Employment Relationship. Executive and Alaska acknowledge that any
employment relationship between them shall terminate on the Separation Date, and
that they will have no continuing contractual relationship except as expressly
provided in this Agreement and the Consulting Agreement. Executive acknowledges
that the Change of Control Agreement between Executive and AAG dated
February 14, 2008 shall terminate on the Effective Date.

17. 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.

18. Entire Agreement. This instrument (including the attached exhibits)
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.

19. 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 shall be null and void in its entirety.

 

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20. Severability and Survivorship. 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. This agreement shall be binding upon a
successor or assignor of Alaska in the event of a merger or acquisition.

21. 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.

22. 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.

23. 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 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.

 

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24. Notice. All notices given hereunder (except for notices of revocation
pursuant to Section 8(d) or 19 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:    Gregg A. Saretsky    9358 SE 30th Street    Clyde Hill, WA
98004 If to Alaska:    Alaska Airlines, Inc.    Attn: Chief Executive Officer   
19300 Pacific Highway South    Seattle, WA 98188    Fax: (206) 392-5807

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.

25. 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.

26. 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.

27. Section 409A.

 

  a. It is intended that any amounts payable under this Agreement shall either
be exempt from or comply with Section 409A of the Code (including the Treasury
regulations and other published guidance relating thereto) (“Code Section 409A”)
so as not to subject Executive to payment of any additional tax, penalty or
interest imposed under Code Section 409A. The provisions of this Agreement shall
be construed and interpreted to avoid the imputation of any such additional tax,
penalty or interest under Code Section 409A yet preserve (to the nearest extent
reasonably possible) the intended benefit payable to Executive.

 

  b. To the extent that any benefits pursuant to Section 2(c) or Section 3(c),
3(d) or 3(e) are taxable to Executive, any reimbursement payment due to
Executive pursuant to any such provision shall be paid to Executive on or before
the last day of Executive’s taxable year following the taxable year in which the
related expense was incurred. Any benefits and reimbursements pursuant to
Section 2(c) or Section 3(c), 3(d) or 3(e) are not subject to liquidation or
exchange for another benefit and the amount of such benefits and reimbursements
that Executive receives in one taxable year shall not affect the amount of such
benefits or reimbursements that Executive receives in any other taxable year.

 

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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 10th day of December 2008 at King County, Washington.

 

/s/ Gregg A. Saretsky Gregg A. Saretsky

EXECUTED this 10th day of December 2008 at King County, Washington.

 

/s/ Phyllis J. Campbell ALASKA AIRLINES, INC. By   Phyllis J. Campbell Chair,
Compensation Committee of the Alaska Air Group, Inc. Board of Directors

 

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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 December 31, 2008, I hereby voluntarily
resign from my position as Executive Vice President/Strategic Projects and any
other capacity with Alaska Airlines, Inc. and each of its affiliates.

Sincerely yours,

[NAME]

 

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EXHIBIT B

SUPPLEMENTAL RELEASE

1. Release. _________________ (the “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 Airlines, Inc. (“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
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; provided, however, that
the foregoing release does not apply to any obligation of the Company and its
subsidiaries to the Executive pursuant to any of the following: (1) the
Agreement between the Executive and the Company dated as of [_____________,
2008] (the “Separation Agreement”) or the related Consulting Agreement between
the Executive and the Company attached thereto; (2) any equity-based awards
previously granted by the Company to the Executive, to the extent that such
awards continue after the termination of the Executive’s employment with the
Company 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 as modified by the Separation Agreement); (3) any right to
indemnification that Executive may have pursuant to the Bylaws or Certificate of
Incorporation of the Company or under any written indemnification agreement with
the Company 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 service
as an employee, officer or director of the Company; (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 the Company; (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
the Company that is intended to qualify under Section 401(a) of the Internal
Revenue Code of 1986, as amended. 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 he has been and is entitled to pursuant to FMLA.

 

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2. 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.

3. 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, the Executive will receive consideration
beyond that which he 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 had twenty-one (21) days within which to consider the
Agreement and that if he wished to execute this Agreement prior to expiration of
such 21-day period, he should execute the Acknowledgement and Waiver attached
hereto as Exhibit B-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 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 the Company
during the seven-day revocation period. In the event that the Executive
exercises his right of revocation, neither the Company nor the Executive will
have any obligations under this Agreement.

 

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4. 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
shall defend, indemnify and hold the Company and each of its 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.

5. 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 the Company’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 Company 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]

 

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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 AIRLINES, INC. By:     [Name]   [Title]  

 

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EXHIBIT B-1

ACKNOWLEDGMENT AND WAIVER

I, _____________, hereby acknowledge that I was given 21 days to consider the
foregoing Supplemental Release Agreement and voluntarily chose to sign the
Supplemental 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]

 

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EXHIBIT C

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 Gregg Saretsky
(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. During the first 90 days of this
agreement, consultant will continue to have access to his Alaska Airlines First
Class email account and may represent his position to prospective employers as
the Executive Vice-President, Strategic Projects.

2. Term. The Contractor shall provide services from January 1, 2009 through
December 31, 2009; provided, however, that the Contractor shall not be obligated
to perform should Contractor become physically or mentally disabled from doing
so. This Agreement may only be terminated for material breach of one of its
provisions.

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 Frontier Airline Holdings, Jet Blue Airways Corporation,
Southwest Airlines Corporation, Virgin America, UAL Corporation or any of their
affiliates. The Contractor further acknowledges that he will comply with the
terms of Sections 9, 10, 13 and 15 of the Agreement entered into between
Consultant and the Company on or about the date hereof (the “Separation
Agreement”) and that a breach of this Section 4 or any of the enumerated
provisions of the Separation Agreement shall constitute a material breach of
this Agreement.

 

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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, 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 monthly consulting fee of $31,817,
such amount to be paid within three (3) business days after the last day of the
month to which it relates. The payments 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.

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

 

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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 all remaining unpaid
fees and expenses due through the term of this Consulting Agreement.

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.

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:    Gregg Saretsky    ______________    ______________
If to Alaska:   

Alaska Airlines, Inc.

Attn: Chief Executive Officer

19300 Pacific Highway South

Seattle, WA 98188

Fax: (206) 431-3819

 

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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.

20. Entire Agreement. This instrument and the Separation Agreement constitute
and contain 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 Separation Agreement shall not be binding
upon or enforceable against either party. This Consulting Agreement (together
with the Separation 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
Separation 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.

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IN WITNESS WHEREOF, the Company and the Contractor have executed this Agreement
as of the date first set forth above.

EXECUTED this _____ day of ___________ 2008, at ________________ County,
Washington.

 

   Gregg Saretsky

EXECUTED this _____ day of ___________ 2008, at ________________ County,
Washington.

 

  ALASKA AIRLINES, INC. By     Its    

 

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EXHIBIT D

ACKNOWLEDGEMENT AND WAIVER

I, [NAME], hereby acknowledge that I was given twenty one (21) days to consider
the foregoing 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] day of [MONTH] [YEAR], at _________ County, Washington.

 

   [NAME]