Document:

Form of Alaska Air Group, Inc. Change of Control Agreement

 Exhibit 10.16 
 Amended and Restated 
 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 amended and restated effective as of the DATE day of MONTH, YEAR. Except as expressly noted herein, the provisions hereof shall be effective as of such 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 2). 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.	Certain Definitions 

 (a) “Accrued
Obligations” is defined in Section 6(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 4(b)(i). 
 (d) “Annual Bonus” is defined in Section 4(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) The “Change of Control Period” means the period commencing on the date hereof and ending on the third
anniversary of the date that Air Group gives notice to the Executive that the Change of Control Period shall be terminated. 
 (g)
“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.

 (h) “Code” means the Internal Revenue Code of 1986, as amended. 
 (i) “Effective Date” means the first date during the Change of Control Period 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 prior to the date on which the Change of Control occurs, 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 “Effective Date” shall mean the date immediately prior to the date of such termination of employment. 
 (j) “Employer” means, collectively, Air Group and any of its subsidiaries that employs the Executive. 
 (k)
“Employment Period” is defined in Section 3. 
 (l) “Exchange Act” means the Securities Exchange Act of 1934, as
amended. 
 (m) “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. 
 (n) “Incentive Plan” means Air Group’s Management Incentive Plan. 
 (o) “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. 
  

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 (p) “Notice of Termination” is defined in Section 5(a). 
 (q) “Person” means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d) of the Exchange Act). 
 (r) “Recent Average Bonus” is defined in Section 4(b)(ii). 
 (s) “Retirement Plan” means the Employer’s funded pension plan or any successor plan thereto. 
 (t) “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). 
 (u) “Welfare Benefit Continuation” is defined in Section 6(b). 
  

	2.	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). 

  

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 (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. 
  

	3.	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 Effective Date and ending on the third
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 Effective Date, the Executive’s employment with the Employer is at will. 
  

	4.	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 3 and (B) the Executive’s services shall be performed within the metropolitan area in which the Executive was situated immediately
prior to the Effective Date, except for required travel in the Employer business to the extent consistent with the Executive’s duties in Section 3. 
  

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 (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 Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective 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 Effective 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 4(b), or
any reimbursement of expenses by the Employer or any affiliated company in accordance with paragraph (v) of this Section 4(b), but shall include vacation pay in accordance with paragraph (viii) of this Section 4(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 Effective 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 Effective 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.

  

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 (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 Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective 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 Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective 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 Effective 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 Effective 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 Effective 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. 
  

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	5.	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 12(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. 

 

	6.	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 4(b)(i) hereof) and the aggregate amounts of the Executive’s Annual
Bonus (calculated in accordance with Section 4(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 Effective 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 Effective 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 4(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 Effective 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 
  

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 (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 Sections 4(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 Effective 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 6(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 4(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 Effective 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 6(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 6, the Executive shall, upon or promptly following his or her Separation from Service with the Employer, 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; provided, however, that this release requirement shall not
apply unless the Effective Date of this Agreement occurs on or after January 1, 2011. The Employer shall have no obligation to make any payment to the Executive pursuant to this Section 6 unless and until the release agreement contemplated
by this Section 6(d) becomes irrevocable by the Executive in accordance with all applicable laws, rules and regulations. 
  

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 (e) Timing of Payment. The lump sum amount specified in Section 6(a) above
shall be paid upon or as soon as practicable after (and in all events within two and one-half months after) the date of the Executive’s Separation from Service; provided, however, that if the Employer’s obligation to make such
payment is subject to the release requirement set forth in Section 6(d), such payment shall be made in the second calendar month following the month in which the Separation from Service occurs. 
  

	7.	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. 

 

	8.	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 6(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 Effective Date under Section 1(i), 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 6
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 8(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. 
  

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	9.	Certain Adjustments 

 (a) In the event that the
Effective Date of this Agreement occurs before January 1, 2011, the Executive becomes entitled to the payments or other benefits described in Section 6 hereof and the Executive becomes 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 Employer shall pay to Executive an additional amount (the “Make-Whole Payment”) equal to the sum of (i) the Excise Tax payable to the Executive prior to the Make-Whole Payment and (ii) the
Federal, state and local income tax and Excise Tax (including any interest or penalties thereon) payable upon all payments made under subparagraphs (i) and (ii) of this Section 9(a). The amount provided for in this Section 9(a)
shall be paid as soon as it is administratively practicable for the Employer to determine such amount, but no later than the end of the calendar year next following the year in which the Executive remits the applicable taxes. 
 (b) In the event that the Effective Date of this Agreement occurs on or after January 1, 2011 and the Executive becomes entitled to any Parachute
Payments, the Employer shall pay to the Executive a Make-Whole Payment in the amount and at the time determined in accordance with Section 9(a); provided, however, that if a reduction in the amount of the Parachute Payments by an amount
up to but not in excess of ten percent (10%) of the amount of the Parachute Payments would avoid the imputation of any Excise Tax on the remaining Parachute Payments (after such reduction), then the Parachute Payments shall be reduced (but not
below zero) so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax. Unless the Executive shall have given prior
written notice to Air Group to effectuate a reduction in the Parachute Payments if such a reduction is required, 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 9(b) 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. 
 (c) All determinations required to be made under this Section 9, including whether the Executive has received a Parachute Payment, shall be made by
KPMG LLP (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 6, 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 the Executive. 
  

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	10.	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 10 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement. 
  

	11.	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. 

 

	12.	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. 
  

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 (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 Effective Date, may be terminated by either the Executive or the Employer at any time. Moreover, if prior to the Effective 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 

  

 12 

 
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 12(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 12(h)(ii) shall only apply if, and to the extent, required to comply with Section 409A. 
 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

  

 13 

 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 6 of the Amended and Restated Change of Control Agreement between the
Executive and Air Group dated as of [            , 2007] (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. 
  

 2 

 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] 
  

 3 

 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]

  

 4 

 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]

  

 5Alaska Air Group, Inc. Nonqualified Deferred Compensation Plan

 Exhibit 10.17 
 ALASKA AIR GROUP, INC. 
 NONQUALIFIED DEFERRED COMPENSATION PLAN 
 Effective
January 1, 1998 
 Restated As Of January 1, 2005 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 PREAMBLE
	  	1
		
	 SECTION 1: DEFINITIONS
	  	1
			
	 1.1  
	  	409A ACCOUNT	  	1
	 1.2  
	  	ACCOUNT	  	2
	 1.3  
	  	ADMINISTRATIVE COMMITTEE	  	2
	 1.4  
	  	AFFILIATED COMPANIES	  	2
	 1.5  
	  	BENEFICIARY	  	2
	 1.6  
	  	BOARD	  	3
	 1.7  
	  	CHANGE OF CONTROL	  	3
	 1.8  
	  	CHANGE OF CONTROL BENEFIT	  	4
	 1.9  
	  	CODE	  	4
	 1.10
	  	CODE SECTION 409A	  	4
	 1.11
	  	COMPANY	  	4
	 1.12
	  	COMPENSATION COMMITTEE	  	4
	 1.13
	  	CONTRIBUTION	  	4
	 1.14
	  	DEFERRAL ELECTION FORM	  	4
	 1.15
	  	DEFERRAL PERIOD	  	5
	 1.16
	  	EFFECTIVE DATE	  	5
	 1.17
	  	ELECTED OFFICER	  	5
	 1.18
	  	ELIGIBLE EMPLOYEE	  	5
	 1.19
	  	EMPLOYER	  	5
	 1.20
	  	ENROLLMENT PERIOD	  	5
	 1.21
	  	ERISA	  	6
	 1.22
	  	GRANDFATHERED ACCOUNT	  	6
	 1.23
	  	INTEREST BEARING FUND	  	6
	 1.24
	  	INTEREST RATE	  	6
	 1.25
	  	INVESTMENT FUND	  	6
	 1.26
	  	INVOLUNTARY TERMINATION.	  	6
	 1.27
	  	KEY EMPLOYEE	  	7
	 1.28
	  	MIP	  	7
	 1.29
	  	PARTICIPANT	  	7
	 1.30
	  	PBP	  	7
	 1.31
	  	PLAN	  	7
	 1.32
	  	PLAN ADMINISTRATOR	  	8
	 1.33
	  	PLAN YEAR	  	8
	 1.34
	  	PLAN YEAR ACCOUNT	  	8
	 1.35
	  	QUALIFIED PLAN	  	8
	 1.36
	  	RE-DEFERRAL ELECTION	  	8
	 1.37
	  	REVIEW PANEL	  	8
	 1.38
	  	SEPARATION FROM SERVICE	  	9
	 1.39
	  	UNFORESEEABLE EMERGENCY	  	10
	 1.40
	  	VALUATION DATE	  	10
	 1.41
	  	ADDITIONAL DEFINITIONS IN PLAN	  	10
	 (a)
	  	Deferred Retention Incentive: As defined in Section 9.1(a)	  	10
	 (b)
	  	Deferred Retention Incentive Account: As defined in Section 9.1(b)	  	10
	 (c)
	  	Deferred Retention Incentive Agreement: As defined in Section 9.1(c)	  	10
	 (d)
	  	Highly Compensated Employee: As defined in Section 9.1(d)	  	10
	 (e)
	  	Irrevocability Date: As defined in Section 9.1(e)	  	10
	 (f)
	  	1995 OSRP: As defined in Section 10.1	  	10
	 (g)
	  	Defined Contribution OSRP Plan: As defined in Section 10.1	  	10
	 (h)
	  	Eligibility Effective Date: As defined in Section 10.1(a)	  	10

  

			
	January 1, 2005 Restatement	  	Page i

					
	 (i)
	  	Eligible Elected Officer: As defined in Section 10.1(b)	  	10
	 (j)
	  	Irrevocability Date: As defined in Section 10.1(c)	  	10
	 (k)
	  	OSRP Account: As defined in Section 10.1(d)	  	10
	 (l)
	  	OSRP Eligible Compensation: As defined in Section 10.1(e)	  	10
	 (m)
	  	OSRP Employer Contribution: As defined in Section 10.1(f)	  	10
		
	 SECTION 2: ELIGIBILITY AND PARTICIPATION
	  	11
			
	 2.1
	  	ENROLLMENT	  	11
	 2.2
	  	TERMINATION OF PARTICIPATION	  	11
	 2.3
	  	INACTIVE PARTICIPATION	  	11
	 2.4
	  	ANNUAL DEFERRAL ELECTION	  	11
	 (a)
	  	Annual Deferral Election Procedure	  	11
	 (b)
	  	Deadline for Deferral Election Form	  	11
		
	 SECTION 3: PLAN CONTRIBUTIONS
	  	12
			
	 3.1
	  	PARTICIPANT DEFERRALS	  	12
	 (a)
	  	Election of Deferral Percentage	  	12
	 (b)
	  	Deferral Election Form; Enrollment Period	  	12
	 3.2
	  	CANCELLATION OF ELECTION	  	13
	 3.3
	  	DEFERRAL PERIOD ELECTION	  	13
	 3.4
	  	EMPLOYER CONTRIBUTIONS	  	13
		
	 SECTION 4: ACCOUNTS
	  	13
			
	 4.1
	  	ACCOUNT(S)	  	13
	 (a)
	  	In General	  	13
	 (b)
	  	Grandfathered Accounts and 409A Accounts	  	13
	 4.2
	  	INVESTMENT EARNINGS ON ACCOUNTS	  	14
	 (a)
	  	Posting of Earnings to Accounts	  	14
	 (b)
	  	Interest Rate	  	14
	 (c)
	  	Investment Funds on and after January 1, 2007	  	15
		
	 SECTION 5: PAYMENT OF BENEFITS
	  	16
			
	 5.1
	  	TIMING OF PAYMENTS FROM THE PLAN	  	16
	 (a)
	  	For Plan Year Accounts within a Grandfathered Account	  	16
	 (b)
	  	For Plan Year Accounts within a 409A Account	  	16
	 5.2
	  	BENEFIT AMOUNT	  	17
	 5.3
	  	PAYMENT FORM	  	18
	 (a)
	  	For Grandfathered Account	  	18
	 (b)
	  	For 409A Account	  	18
	 5.4
	  	PAYMENT-FORM ELECTION	  	18
	 (a)
	  	For Each Plan Year Account in a Grandfathered Account	  	18
	 (b)
	  	For Each Plan Year Account in a 409A Account	  	18
	 (c)
	  	Re-Deferral Election for a Plan Year Account of a 409A Account	  	19
	 (d)
	  	Special Transition-Year Election of Form of Payment	  	19
	 5.5
	  	HARDSHIP DISTRIBUTIONS	  	19
	 (a)
	  	For Grandfathered Accounts	  	19
	 (b)
	  	For 409A Accounts	  	20
		
	 SECTION 6: CHANGE OF CONTROL BENEFITS
	  	20
			
	 6.1
	  	CHANGE OF CONTROL BENEFIT	  	21
	 6.2
	  	FORM OF PAYMENT	  	21
	 6.3
	  	TERMINATION OF GRANDFATHERED ACCOUNT FEATURES OF PLAN	  	21
		
	 SECTION 7: DEATH BENEFITS
	  	21
			
	 7.1
	  	DEATH AFTER BENEFIT PAYMENTS BEGIN	  	21
	 7.2
	  	DEATH BEFORE BENEFIT PAYMENTS BEGIN	  	21

  

			
	January 1, 2005 Restatement	  	Page ii

					
	 SECTION 8: VESTING
	  	22
			
	 8.1
	  	VESTING	  	22
		
	 SECTION 9: DEFERRED RETENTION INCENTIVE ACCOUNTS
	  	22
			
	 9.1
	  	PURPOSE	  	22
	 9.2
	  	DEFINITIONS	  	22
	 (a)
	  	Deferred Retention Incentive	  	22
	 (b)
	  	Deferred Retention Incentive Account	  	22
	 (c)
	  	Deferred Retention Incentive Agreement	  	22
	 (d)
	  	Highly Compensated Employee	  	23
	 (e)
	  	Irrevocability Date	  	23
	 9.3
	  	DEFERRED RETENTION INCENTIVE ACCOUNT	  	23
	 (a)
	  	Election of Form of Benefit Payment	  	23
	 (b)
	  	Special Rules for Form and Timing of Payments	  	23
	 (c)
	  	Vesting	  	24
	 (d)
	  	Other Terms Applicable to a Deferred Retention Incentive Account	  	24
		
	 SECTION 10: DEFINED CONTRIBUTION OSRP ACCOUNTS
	  	24
			
	 10.1
	  	PURPOSE	  	24
	 10.2
	  	DEFINITIONS	  	25
	 (a)
	  	Eligibility Effective Date	  	25
	 (b)
	  	Eligible Elected Officer	  	25
	 (c)
	  	Irrevocability Date	  	26
	 (d)
	  	OSRP Account	  	26
	 (e)
	  	OSRP Eligible Compensation	  	26
	 (f)
	  	OSRP Employer Contribution	  	26
	 10.3
	  	TERMS APPLICABLE TO OSRP ACCOUNTS	  	27
	 (a)
	  	Election of Form of Benefit Payment	  	27
	 (b)
	  	Special Rules for Form and Timing of Payments	  	27
	 (c)
	  	Vesting	  	27
	 (d)
	  	Other Terms Applicable to an OSRP Account	  	28
		
	 SECTION 11: ADMINISTRATIVE POWERS AND DUTIES
	  	28
			
	 11.1
	  	ADMINISTRATIVE OVERSIGHT; APPOINTMENT OF PLAN ADMINISTRATOR	  	28
	 11.2
	  	POWERS AND DUTIES	  	28
	 11.3
	  	COMMITTEE PROCEDURES	  	29
	 (a)
	  	Compensation Committee After July 1, 2006	  	29
	 (b)
	  	Administrative Committee Prior to July 1, 2006	  	29
	 11.4
	  	APPOINTMENT OF AGENTS	  	30
	 11.5
	  	ADMINISTRATIVE EXPENSES	  	30
	 11.6
	  	DETERMINATIONS	  	30
	 11.7
	  	CLAIM AND REVIEW PROCEDURE	  	30
	 (a)
	  	Application for Benefits	  	30
	 (b)
	  	Denial of Application	  	31
	 (c)
	  	Review Panel	  	31
	 (d)
	  	Request for Review	  	31
	 (e)
	  	Decision on Review	  	32
	 (f)
	  	Rules and Procedures	  	32
	 (g)
	  	Exhaustion of Administrative Remedies	  	32
	 11.8
	  	EXEMPTION FROM LIABILITY/INDEMNIFICATION	  	33
		
	 SECTION 12: AMENDMENT AND TERMINATION
	  	33
			
	 12.1
	  	AMENDMENT OR TERMINATION	  	33
	 (a)
	  	Right to Amend or Terminate	  	33
	 (b)
	  	Plan Termination	  	34
	 (c)
	  	Procedures	  	34

  

			
	January 1, 2005 Restatement	  	Page iii

					
	 SECTION 13: MISCELLANEOUS PROVISIONS
	  	34
			
	 13.1
	  	APPENDICES	  	34
	 13.2
	  	ERISA STATUS	  	35
	 13.3
	  	UNFUNDED NATURE OF THE OBLIGATION	  	35
	 13.4
	  	FACILITY OF PAYMENT	  	35
	 13.5
	  	GOVERNING LAW	  	35
	 13.6
	  	LIMITATION ON ASSIGNMENT; DOMESTIC RELATIONS ORDERS	  	35
	 (a)
	  	Limitation on Assignment, Attachment, Garnishment	  	35
	 (b)
	  	Domestic Relations Orders	  	35
	 13.7
	  	NO ADDITIONAL RIGHTS.	  	36
	 13.8
	  	NOTICE	  	36
	 13.9
	  	SEVERABILITY	  	36
	 13.10
	  	TAX CONSEQUENCES AND WITHHOLDING	  	36

  

					
	APPENDIX I: PARTICIPATING EMPLOYERS	  	38
		
	APPENDIX II: DEFERRED RETENTION INCENTIVE ACCOUNTS	  	39
		
	APPENDIX III: OSRP ACCOUNTS	  	40

  

			
	January 1, 2005 Restatement	  	Page iv

 PREAMBLE 
 The purpose of this Alaska Air Group, Inc. Nonqualified Deferred Compensation Plan is to attract and retain capable individuals to serve as executive employees of Alaska
Air Group, Inc. (the “Company”) and of certain affiliated companies by providing a select group of executive or management employees the opportunity to defer receipt of compensation, to which the executives otherwise would be entitled
currently. 
 The Plan is intended to qualify for exemption from Parts 2, 3 and 4 of Subtitle B of Title I of the Employee Retirement Income Security Acts of
1974, as amended (“ERISA”), as a plan which is unfunded and which is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees under Section 201(2),
301(a)(3) and 401(a)(1) of ERISA. 
 The Plan set forth in the following pages is adopted by the Company, effective January 1, 1998, as amended.

 Effective January 1, 2003, the Plan was amended to incorporate the Performance Based Pay Plan (PBP), modifications in the claims and appeals
procedures, and certain other minor modifications. 
 Effective January 1, 2005, the Plan was amended and restated to establish terms for 409A Accounts
that are intended to comply with Code Section 409A, to preserve without modification the terms and conditions that apply to certain Grandfathered Accounts established prior to the 409A effective date, and to incorporate certain design
modifications – for 409A Accounts – as approved by the Board. 
 Section 1: DEFINITIONS 

 Whenever capitalized in this Plan, the following capitalized terms shall have the meanings set forth below except where otherwise provided. As used in the
Plan, the masculine, feminine, and neuter genders shall each be deemed to include the other or others. 
  

	1.1	409A Account 

 “409A Account” means the portion (if any)
of a Participant’s Account that is governed by Code Section 409A by virtue of an amount having been deferred (or having become vested) on or after January 1, 2005. A Participant’s 409A Account shall consist of: 
  

	 	(a)	any Plan Year Account for a deferred PBP bonus award earned by the Participant during 2005 or any later year (and credited to the Participant’s Account in 2006 or any later
year); 

  

	 	(b)	any Deferred Retention Incentive Account held by the Participant; and 

  

	 	(c)	any OSRP Account held by the Participant. 

  

			
	January 1, 2005 Restatement	  	Page 1

	1.2	Account 

 “Account” means one or more book reserve records
maintained by the Company for the purpose of determining a Participant’s benefits under the Plan. Also see the definitions for “409A Account” and “Grandfathered Account.” 
  

	1.3	Administrative Committee 

 Prior to July 1, 2006,
“Administrative Committee” means a committee appointed by the Chairman of the Board to serve as Plan Administrator pursuant to Section 11. 
  

	1.4	Affiliated Companies 

 “Affiliated Companies” or
“Affiliate” means: 
  

	 	(a)	the Company; 

  

	 	(b)	any other corporation which is a member of a controlled group of corporations which includes the Company (as defined in Code Section 414(b)); 

  

	 	(c)	any other trade or business under common control with the Company (as defined in Code Section 414(c)); or 

  

	 	(d)	any other member of an affiliated service group which includes the Company (as defined in Code Section 414(m)). 

  

	1.5	Beneficiary 

 “Beneficiary” means the person or persons
entitled to receive a Participant’s benefits payable under the Plan in the event of the Participant’s death. The Beneficiary is the person or persons named in the Participant’s latest written designation filed with the Plan
Administrator, provided that the consent of the Participant’s spouse (if any) is required for the election of a non-spouse Beneficiary and for any subsequent changes of the Participant’s Beneficiary designation. Spousal consent must be in
writing, name the designated Beneficiary and be notarized. 
 If no designation has been filed with the Plan Administrator, or if the person or persons
designated do not survive the Participant, the Beneficiary shall be the following persons in the following order of priority: (1) the surviving spouse (regardless of length of marriage), and (2) the estate of the Participant. 

If the Beneficiary dies after the death of the Participant, but before full distribution has been made to that Beneficiary, the balance, if any, shall be distributed
to the estate of that deceased Beneficiary. 
  

			
	January 1, 2005 Restatement	  	Page 2

	1.6	Board 

 “Board” means the Board of Directors of the
Company, or a committee composed of fewer than all of the members of the Board of Directors of the Company that is authorized to act on behalf of the Board. 
  

	1.7	Change of Control 

 “Change of Control” means the
occurrence of any of the following: 
  

	 	(a)	the Board approves (or, if approval of the Board is not required as a matter of law, the shareholders of the Company approve): 

  

	 	(i)	any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of common stock of the Company would be
converted into cash, securities or other property, other than a merger of the Company in which the holders of common stock of the Company immediately prior to the merger have the same proportionate ownership of common stock of the surviving
corporation immediately after the merger; 

  

	 	(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 the Participant’s Employer; or

  

	 	(iii)	the adoption of any plan or proposal for the liquidation or dissolution of the Participant’s Employer; 

  

	 	(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 constituted 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 (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) 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 the Company 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 the Company) representing 20% or more of the combined voting power of the then-outstanding Voting Securities. 

  

			
	January 1, 2005 Restatement	  	Page 3

 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 the Company and an Employer, or any Affiliates 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. 
  

	1.8	Change of Control Benefit 

 “Change of Control Benefit”
shall apply to a Participant’s Grandfathered Account (and not a Participant’s 409A Account) and shall have the meaning stated in Section 6.1. 
  

	1.9	Code 

 “Code” means the Internal Revenue Code of 1986, as
amended, and regulations promulgated under the Code. 
  

	1.10	Code Section 409A 

 “Code Section 409A” means
the provisions of section 409A of the Code, as interpreted by any and all proposed or final regulations, or other published guidance of the Department of the Treasury or Internal Revenue Service. 
  

	1.11	Company 

 “Company” means Alaska Air Group, Inc., a
corporation organized and existing under the laws of the State of Delaware, and its successors in interest. 
  

	1.12	Compensation Committee 

 “Compensation Committee” means
the Compensation Committee of the Board. 
  

	1.13	Contribution 

 “Contribution” means a Participant’s
deferral of compensation that would otherwise have been payable currently to the Participant but which is instead allocated to the Participant’s Account pursuant to Section 3. 
  

	1.14	Deferral Election Form 

 “Deferral Election Form” means an
agreement between a Participant and the Company whereby the Participant elects pursuant to Section 3 to reduce his or her PBP (or pre-2003 MIP) bonus for a future Plan Year and the Company promises to pay the deferred compensation from the Plan
in the future. The form and content of the Deferral Election Form shall be prescribed by the Plan Administrator. To comply with Code Section 409A, effective January 1, 2005, any Deferral Election Form that is delivered by an Eligible
Employee on or after that date shall include: (a) the portion (if any) of the corresponding PBP bonus that the Eligible Employee elects to defer to a Plan Year Account, (b) the Deferral Period for that Plan Year Account, and (c) the
form of payment elected by the Eligible Employee for that Plan Year Account in the case of a distribution 

  

			
	January 1, 2005 Restatement	  	Page 4

 
resulting from the expiration of the Deferral Period. Notwithstanding the prior sentence, subject to any other applicable terms of this Plan, the Deferral
Election Form may state a default time and/or form of payment, and any such default shall apply in the absence of an express election on the Deferral Election Form to the contrary. 
  

	1.15	Deferral Period 

 “Deferral Period” means the number of
years selected by a Participant pursuant to Section 3 during which payment of his or her Contribution for a Plan Year shall be deferred, in the absence of an intervening event that results in an earlier distribution in accordance with other
terms of this Plan. 
  

	1.16	Effective Date 

 “Effective Date” means January 1,
1998. 
  

	1.17	Elected Officer 

 “Elected Officer” means an officer of an
Employer that is elected by the Board, pursuant to the bylaws of the Employer. 
  

	1.18	Eligible Employee 

 “Eligible Employee” means an Employee
who is eligible to defer any or all of his or her PBP (or pre-2003 MIP) bonus under the terms of Sections 2 through 8 of this Plan. An Eligible Employee shall be any individual who is: 
  

	 	(a)	employed by an Employer as a common law employee for federal employment tax purposes; 

  

	 	(b)	eligible for the PBP (or pre-2003 MIP); and 

  

	 	(c)	named by the Compensation Committee (or, prior to July 1, 2006, the Board), or whose position is at a level or title approved by the Compensation Committee (or, prior to
July 1, 2006, the Board), to participate in the Plan. 

  

	1.19	Employer 

 “Employer” means each and any employing company
that participates in this Plan. Employers shall include the Company and any Affiliate that adopts this Plan in writing with the consent of the Board, and agrees to be bound by the terms and conditions of the Plan and any amendments or modifications
thereto, and which is listed in Appendix I. In the event an Employer ceases participation in the Plan, the date participation ceases shall be indicated in the Appendix. 
  

	1.20	Enrollment Period 

 “Enrollment Period” means an election
period that is established by the Plan Administrator for submission of a Deferral Election Form pursuant to Section 3.1. The deadline for an Enrollment Period, and the date as of which a Deferral Election Form shall become irrevocable, shall be
as stated in Section 2.4(b). 
  

			
	January 1, 2005 Restatement	  	Page 5

	1.21	ERISA 

 “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and regulations promulgated thereto. 
  

	1.22	Grandfathered Account 

 “Grandfathered Account” means the
portion (if any) of a Participant’s Account that is exempt from Code Section 409A by virtue of a PBP (or MIP) bonus (or any portion thereof) having been deferred and vested on or before December 31, 2004, and earnings (and losses)
thereafter accruing. A Grandfathered Account shall consist of any one or more Plan Year Accounts for deferred, vested amounts derived from PBP (or MIP) bonus awards earned during 2004 or any prior year (credited to the Plan in 2005 or any prior
year). Because a PBP bonus program participant in 2004 (under the terms of the PBP program, as then administered) accrued a vested right to a PBP bonus on December 31st of that year if he was an active Employee of the Employer on that date, the
PBP bonus awarded in 2005 (and contributed to this Plan on or about the date when awarded), is considered vested on December 31, 2004, and that Contribution (if any) would therefore be considered part of a Participant’s Grandfathered
Account, in combination with any Plan Year Accounts for any prior years. 
  

	1.23	Interest Bearing Fund 

 “Interest Bearing Fund” means an
Investment Fund offered under the Plan, on and after January 1, 2007, as further described in Section 4.2(b)(ii). 
  

	1.24	Interest Rate 

 “Interest Rate” shall have the meaning
stated in Section 4.2(b). 
  

	1.25	Investment Fund 

 “Investment Fund” means the Interest
Bearing Fund, and each of the other book-entry investment accounts offered to Participants by the Plan on and after January 1, 2007, to enable a Participant to direct the investment of his or her Contributions and Account. Each Investment Fund
shall reflect the investment performance of a corresponding investment fund under the AlaskaSaver 401(k) Plan, as further described in Section 4.2(c). 
  

	1.26	Involuntary Termination. 

 “Involuntary Termination” and
its derivatives as the context requires (such as “involuntarily Terminated”) means no longer employed by an Employer or Affiliated Company as a common law employee for federal employment tax purposes due to discharge, lay off, or similar
Employer action. 
  

			
	January 1, 2005 Restatement	  	Page 6

	1.27	Key Employee 

 The term “Key Employee” shall apply to any
409A Account and shall mean a “specified employee” (within the meaning of Code Section 409A(a)(2)(B)(i)). Whether a Participant is a Key Employee (and a “specified employee”) shall be determined as follows: 
  

	 	(a)	ascertain the 12-month period from April 1 to March 31 in which the date of the Participant’s Separation from Service has occurred; 

  

	 	(b)	the determination date for Key Employee status shall be the December 31 immediately preceding the start of the 12-month period established in “(a)”; and

  

	 	(c)	determine whether, as of the determination date established in “(b)” the Participant was a “key employee” as defined by Code §416(i)(1)(A)(i), (ii) or
(iii), without regard to Code §416(i)(5). 

 For a Participant whose Separation from Service date triggers a distribution under this Plan
and results in a finding of Key Employee status pursuant to this Section, the distribution of the Participant’s 409A Account shall be subject to the six-month payment delay stated in Section 5.1(b)(iii). 
 This “Key Employee” definition shall apply only so long as securities of the Company are publicly traded on an established securities market. 
  

	1.28	MIP 

 Before January 1, 2003, “MIP” means the Alaska
Air Group, Inc. Management Incentive Program, under which incentive compensation earned in 2002 and certain prior years were awarded annually. 
  

	1.29	Participant 

 “Participant” means each Eligible Employee
(as provided in Sections 1.18 and 2), each eligible Highly Compensated Employee under Section 9 and each Eligible Elected Officer under Section 10, who participates in this Plan. 
  

	1.30	PBP 

 “PBP” means the Alaska Air Group, Inc. Performance
Based Pay Plan, which became effective January 1, 2003. 
  

	1.31	Plan 

 “Plan” means the Alaska Air Group, Inc.
Nonqualified Deferred Compensation Plan, as set forth herein and amended from time to time. 
  

			
	January 1, 2005 Restatement	  	Page 7

	1.32	Plan Administrator 

 Effective July 1, 2006, “Plan
Administrator” means a person appointed by the Compensation Committee, with responsibility for day-to-day administration of the Plan, and day-to-day administrative oversight of any third-party recordkeeper or other administrator(s) appointed by
the Compensation Committee or Plan Administrator on or after that date. Prior to July 1, 2006, “Plan Administrator” means the Administrative Committee. 
  

	1.33	Plan Year 

 “Plan Year” means the calendar year beginning
on the Effective Date and each subsequent calendar year. 
  

	1.34	Plan Year Account 

 As applied to deferred PBP (or pre-2003 MIP)
bonuses, a “Plan Year Account” for a Participant means the sub-account of the Participant’s Account that tracks the Contribution credited to the Participant’s Account in a given Plan Year in accordance with the PBP (or pre-2003
MIP) deferral election made by the Participant in advance of that Plan Year (including investment earnings and losses on such Contribution). 
 As applied to
a Deferred Retention Incentive, a Plan Year Account means the entire amount of a Participant’s Deferred Retention Incentive Account (including investment earnings and losses thereon). 
 As applied to a Participant in the Defined Contribution OSRP Plan, a Plan Year Account means the entire amount of a Participant’s OSRP Account, including all
allocations credited to such OSRP Account (and investment earnings and losses thereon), in any and all Plan Years. 
  

	1.35	Qualified Plan 

 “Qualified Plan” means any defined
contribution retirement plan that is qualified or is intended to be qualified under Code Section 401(k) and that is maintained by an Affiliated Company. 
  

	1.36	Re-Deferral Election 

 “Re-Deferral Election,” as applied
to any Plan Year Account (or any Deferred Retention Incentive Account or OSRP Account) within a Participant’s 409A Account, means an election delivered by the Participant, in accordance with Section 5.4(c), to change the form of payment
otherwise payable from such Account. 
  

	1.37	Review Panel 

 “Review Panel” shall have the meaning
stated in Section 11.8(c). 
  

			
	January 1, 2005 Restatement	  	Page 8

	1.38	Separation from Service 

 The term “Separation from
Service” shall apply to any 409A Account (but not any Grandfathered Account) and shall be interpreted consistently with guidance issued pursuant to Code Section 409A, and shall generally mean as follows: 
  

	 	(a)	An Employee who is a Participant shall be deemed to have a “Separation from Service” when the Employee ceases to be employed by the Employer as a direct result of the
Employee’s death or his or her termination of employment for any reason (other than a transfer to a company affiliated with the Employer). However, for purposes of this definition of Separation from Service, the employment relationship is
treated as continuing intact while the individual is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months, or if longer, so long as
the individual’s right to reemployment with the Employer is provided either by statute or by contract. If the period of leave exceeds six months and the individual’s right to reemployment is not provided either by statute or by contract,
the employment relationship is deemed to terminate on the first date immediately following such six-month period. 

  

	 	(b)	Whether a termination of employment has occurred is determined based on the facts and circumstances. 

  

	 	(c)	If, after a change in employment status, a Participant continues to be treated as a common-law employee of the Employer as evidenced by the payroll records of the Employer, the
change in employment status shall not be treated as a Separation from Service if the Employee, after the change of status, either (i) performs hours of service per month that amount to 20 percent or more of the average hours of service per
month performed for the Employer during the three-year period prior to the change in employment status (or, if shorter, the period during which the Employee was employed by the Employer), and (ii) receives remuneration at an annualized rate
that is 20 percent or more of the average remuneration received by the Employee for the period of time described in clause (i). 

  

	 	(d)	If, after a change in employment status, a Participant is not treated as a common-law employee of the Employer as evidenced by the payroll records of the Employer, the change in
employment status shall not be treated as a Separation from Service if the Employee, after the change of status, either (i) performs hours of service per month that amount to 50 percent or more of the average hours of service per month
performed for the Employer during the three-year period prior to the change in employment status (or, if shorter, the period during which the Employee was employed by the Employer), and (ii) receives remuneration at an annualized rate that is
50 percent or more of the average remuneration received by the Employee for the period of time described in clause (i). 

  

			
	January 1, 2005 Restatement	  	Page 9

	1.39	Unforeseeable Emergency 

 The term “Unforeseeable
Emergency” shall apply to a Participant’s 409A Account other than a Deferred Retention Incentive Account or an OSRP Account, shall be interpreted consistently with guidance issued pursuant to Code Section 409A, and shall generally
mean a Participant’s severe financial hardship resulting from either: 
  

	 	(a)	an illness or accident of the Participant, or his or her spouse or “dependent” (as defined in Code Section 152(a)), and the related extraordinary and unforeseeable
medical expenses; 

  

	 	(b)	loss of a Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance); 

 

	 	(c)	other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, such as the imminent foreclosure of or eviction from
the Participant’s primary residence, or extraordinary funeral expenses of a spouse or dependent (as defined above). 

 Generally, the
purchase of a home and the payment of college tuition are not Unforeseeable Emergencies. Whether an event constitutes an Unforeseeable Emergency shall be determined by the Plan Administrator based on the relevant facts and circumstances of each
case. 
  

	1.40	Valuation Date 

 Effective January 1, 2007, “Valuation
Date” means each business day that is a valuation date under the terms of the AlaskaSaver 401(k) Plan. Prior to January 1, 2007, “Valuation Date” means the first day of each month or any other date the Plan Administrator
designates from time to time. 
  

	1.41	Additional Definitions in Plan 

 The following terms are defined in
the following subsections of Sections 9 and 10 of the Plan: 
  

	 	(a)	Deferred Retention Incentive: As defined in Section 9.1(a) 

  

	 	(b)	Deferred Retention Incentive Account: As defined in Section 9.1(b) 

  

	 	(c)	Deferred Retention Incentive Agreement: As defined in Section 9.1(c) 

  

	 	(d)	Highly Compensated Employee: As defined in Section 9.1(d) 

  

	 	(e)	Irrevocability Date: As defined in Section 9.1(e) 

  

	 	(f)	1995 OSRP: As defined in Section 10.1 

  

	 	(g)	Defined Contribution OSRP Plan: As defined in Section 10.1 

  

	 	(h)	Eligibility Effective Date: As defined in Section 10.1(a) 

  

	 	(i)	Eligible Elected Officer: As defined in Section 10.1(b) 

  

	 	(j)	Irrevocability Date: As defined in Section 10.1(c) 

  

	 	(k)	OSRP Account: As defined in Section 10.1(d) 

  

	 	(l)	OSRP Eligible Compensation: As defined in Section 10.1(e) 

  

	 	(m)	OSRP Employer Contribution: As defined in Section 10.1(f) 

  

			
	January 1, 2005 Restatement	  	Page 10

 Section 2: ELIGIBILITY AND
PARTICIPATION 
  

	2.1	Enrollment 

 Each Eligible Employee shall become a Participant on
the later of: 
  

	 	(a)	the Effective Date, or 

  

	 	(b)	the first day of the Plan Year to which the Eligible Employee’s first Deferral Election Form relates. 

  

	2.2	Termination of Participation 

 A Participant’s participation in
the Plan will terminate when the Participant’s Account balance under this Plan has been paid in full. 
  

	2.3	Inactive Participation 

 A Participant shall cease to be an active
Participant upon written notification by the Board. 
 In that event, the Participant shall be considered an inactive Participant. An inactive Participant
shall continue participation with respect to amounts credited to his or her Account, but no additional Contributions shall be credited to his or her Account pursuant to Section 3 after the date the Participant becomes inactive. The Accounts of
inactive Participants shall continue to be adjusted for earnings and payments pursuant to Section 4. Effective January 1, 2007 and thereafter, an inactive Participant shall have the same rights as an active Participant to reallocate the
investment of his or her Account among the Investment Funds of the Plan. 
  

	2.4	Annual Deferral Election 

  

	 	(a)	Annual Deferral Election Procedure 

 The Plan shall
offer an annual enrollment and deferral election process, consisting of an Enrollment Period of at least 10 business days during which each Eligible Employee shall be offered the opportunity to complete and deliver a Deferral Election Form. An
individual who becomes an Eligible Employee shall be eligible to receive and deliver a Deferral Election Form during the annual Enrollment Period that next follows the date as of which he or she becomes an Eligible Employee. 
  

	 	(b)	Deadline for Deferral Election Form 

  

	 	(i)	For a Grandfathered Account 

 For Enrollment
Periods in 2004 and prior years, the Enrollment Period shall occur in December of the calendar year in which the PBP (or pre-2003 MIP) award is being earned. The deadline date as of which any deferral election shall become irrevocable shall be
determined and stated by the Plan Administrator in the notices accompanying a Deferral Election Form but shall not be later than December 31st of such year. 
  

			
	January 1, 2005 Restatement	  	Page 11

	 	(ii)	For a 409A Account 

 To comply with Code
Section 409A, commencing with the Enrollment Period in 2005 pertaining to potential deferral of the PBP bonus to be awarded in the next following calendar year, and in each year thereafter, the deadline for the irrevocability of the Deferral
Election Form shall not be later than: 
  

	 	(A)	June 30, in any year in which the PBP bonus being earned in such year is “performance-based” (as defined under Code Section 409A); or 

	 	(B)	December 31 of the calendar year prior to the year in which the PBP bonus will be earned, if the PBP bonus to be earned in the following year will not be
“performance-based” (as defined under Code Section 409A). 

 Section 3: PLAN
CONTRIBUTIONS 
  

	3.1	Participant Deferrals 

  

	 	(a)	Election of Deferral Percentage 

 Except as provided
in Section 3.2, a Participant may elect to defer receipt of some or all of a PBP (or a pre-2003 MIP) payment for a future Plan Year by completing a Deferral Election Form that specifies a percentage of the future PBP (or MIP) payment (in 1%
increments) which the Participant elects to defer, and authorizes the Employer to make a corresponding payroll reduction from the Participant’s PBP (or MIP) award. 
  

	 	(b)	Deferral Election Form; Enrollment Period 

 Each
Eligible Employee shall be afforded an opportunity to make an annual deferral election during an Enrollment Period for a Plan Year as described in Section 2.4. Except as provided in Section 3.2, after the last day of the Enrollment Period
for a Plan Year, a Participant cannot change or revoke the amount of PBP (or MIP) deferral elected on the Deferral Election Form, and the Participant may not thereafter modify the form or timing of distribution elected on the Deferral Election Form
unless he or she complies with the requirements of the applicable provisions of Section 5.4. If a Participant fails to complete and submit a Deferral Election Form before the end of an Enrollment Period, the Participant is deemed to have
elected not to defer any PBP (or pre-2003 MIP) bonus for the Plan Year to which the Enrollment Period applies. 
  

			
	January 1, 2005 Restatement	  	Page 12

	3.2	Cancellation of Election 

 If a Participant receives a hardship
distribution under a Qualified Plan any Deferral Election Form that applies to a PBP (or pre-2003 MIP) bonus payable during the six-month period following the date of the hardship distribution is deemed canceled. The Participant may resume deferrals
for a future Plan Year by submitting another Deferral Election Form during any subsequent Enrollment Period that applies to a PBP (or pre-2003 MIP) bonus payable after the six-month period expires. 
  

	3.3	Deferral Period Election 

 On each Deferral Election Form, a
Participant must elect a Deferral Period. The Deferral Period is measured from the first day of the Plan Year to which the Deferral Election Form relates. For example, a Deferral Election Form delivered on June 30, 2005 for the PBP bonus
payable in Plan Year 2006 would have a Deferral Period measured from January 1, 2006. The Deferral Period elected must be stated in whole Plan Years, and in no event will a Deferral Period be shorter than two (2) Plan Years. A Deferral
Election Form shall become irrevocable on the last day of the Enrollment Period in which it is delivered. 
  

	3.4	Employer Contributions 

 No Employer Contributions are authorized
under the Plan. 
 Section 4: ACCOUNTS 
  

	4.1	Account(s) 

  

	 	(a)	In General 

 Each Plan Year, the Plan Administrator
(or the designated third-party recordkeeper, if any) shall establish on the Company’s books and records a Plan Year Account for that Plan Year in the name of each Participant for whom the PBP (or pre-2003 MIP) bonus for that Plan Year is
deferred, in whole or in part. The Plan Administrator (or third-party recordkeeper) shall credit the Participant’s Account as of the date the PBP (or pre-2003 MIP) was paid with the Participant’s Contribution for that Plan Year. The Plan
Administrator (or third-party recordkeeper) will credit earnings to each Account pursuant to Section 4.2. 
  

	 	(b)	Grandfathered Accounts and 409A Accounts 

 Grandfathered Accounts shall be administered in accordance with the terms of this Plan that were in effect on or before October 3, 2004. 
 409A Accounts shall be administered in accordance with the terms of this Plan that expressly apply to 409A Accounts. 
  

			
	January 1, 2005 Restatement	  	Page 13

 Where a provision of this Plan does not distinguish between Grandfathered Accounts and 409A Accounts, and
such provision has not been materially modified since October 3, 2004, then such provision shall apply to both types of Accounts. 
  

	4.2	Investment Earnings on Accounts 

  

	 	(a)	Posting of Earnings to Accounts 

 The Plan
Administrator shall credit each Account with earnings as of each Valuation Date; provided, however, that this responsibility shall be delegated to the Plan’s third-party recordkeeper whenever serving in that capacity. 
  

	 	(b)	Interest Rate 

  

	 	(i)	Crediting of Interest on and before December 31, 2006 

 On and before December 31, 2006, Earnings on each Account shall be determined exclusively with reference to an Interest Rate. There shall be a monthly Valuation Date, and the earnings credit for each monthly Valuation Date shall be
determined by applying the Interest Rate to the Account balance determined as of the Valuation Date for which earnings are being credited, reduced by any installment payment under Section 5.3(b) for that month. The Interest Rate for a Plan Year
(for 2006, or for any prior Plan Year) is the mean between the high and the low during the first eleven months of the preceding Plan Year of yields of Ba2-rated industrial bonds as determined in the discretion of the Plan Administrator, rounded to
the nearest one quarter of one percent (0.25%). The Plan Administrator will notify Participants annually of the established Interest Rate for the Plan Year. 
  

	 	(ii)	Crediting of Interest on and after January 1, 2007 

 On and after January 1, 2007, the Plan shall offer a fixed principal, interest bearing fund (“Interest Bearing Fund”) as an alternative to the funds described in Section 4.2(c); provided, however, that the Interest
Bearing Fund shall be closed to new investment transfers into that fund after the January 1, 2007 initial transfer of account balances held as of the close of business on December 31, 2006. Thereafter, a Participant may at any time
transfer any or all of the balance of the Interest Bearing Fund to any other Investment Fund, or may hold existing balances in the Interest Bearing Fund. 
 There shall be a daily Valuation Date, at which time each Participant’s balance in the Interest Bearing Fund shall be credited with a day’s interest for each 24-hour period that has elapsed since the next
prior daily Valuation Date, at a daily rate equal to the annual interest crediting rate for 

  

			
	January 1, 2005 Restatement	  	Page 14

 
such year divided by 365. The annual interest rate shall be determined not later than December of the prior year, and shall be equal to the yield on a
Moody’s index of Ba2-rated industrial bonds as of November of such prior year, rounded to the nearest one quarter of one percent (0.25%). 
  

	 	(c)	Investment Funds on and after January 1, 2007 

  

	 	(i)	On and after January 1, 2007, the Plan shall offer – in addition to the Interest Bearing Fund described in Section 4.2(b)(ii) – a number of Investment Funds
corresponding to, and mirroring the investment characteristics of, the respective investment funds offered under the AlaskaSaver 401(k) Plan. Except for the Interest Bearing Fund, if and when an investment fund is discontinued, or added to, the
AlaskaSaver 401(k) Plan, the corresponding Investment Fund will be discontinued or added to this Plan. 

  

	 	(ii)	Each such Investment Fund under this Plan shall be in the form of an unfunded book-entry account which shall, in each case, be credited on each daily Valuation Date, with earnings
(or losses) that mirror the day-to-day investment performance of the corresponding investment fund under the AlaskaSaver 401(k) Plan (or the applicable interest rate in the case of the Interest Bearing Fund). 

  

	 	(iii)	The investment fund that is designated from time to time as the default under the AlaskaSaver 401(k) Plan shall likewise serve as the default investment fund under this Plan in the
event that a Participant or beneficiary neglects to make a timely election to direct the investment of his or her Account under this Plan. 

  

	 	(iv)	Each Participant who has an Account under the Plan shall have the right to direct the allocation of future Contributions to the Plan, and, separately, to redirect the allocation of
his or her entire existing Account balance, from time to time in the manner and with the frequency determined by the Plan Administrator, as administered and interpreted by the recordkeeper for the Plan. A Participant shall not have the right to
separately re-allocate the investment of the existing balance of a Plan Year Account (except in the case of a Participant whose entire Account balance consists of a single Plan Year Account). 

  

	 	(v)	The Plan Administrator shall have the discretion to determine rules relating to frequency, deadlines and other constraints on a Participant’s right to direct the investment of
Contributions and the re-allocation of Account balances. In the absence of adoption of a rule to the contrary by the Plan Administrator, the rules for investment direction and reallocation shall be identical to the rules that apply to the
corresponding investment funds under the AlaskaSaver 401(k) Plan. 

  

			
	January 1, 2005 Restatement	  	Page 15

 Section 5: PAYMENT OF BENEFITS 

 The provisions of Sections 5.1 through 5.4 describe the timing and form of benefits under circumstances other than hardship or Unforeseeable Emergency
(Section 5.5), Change of Control (Section 6), or death (Section 7). 
  

	5.1	Timing of Payments from the Plan 

  

	 	(a)	For Plan Year Accounts within a Grandfathered Account 

 The timing of payments shall be in accordance with the terms of this Plan which were in effect as of October 3, 2004, as follows: 
  

	 	(i)	At the End of the Deferral Period: Except as provided in Section 5.1(a)(ii), payments to a Participant from any one or more Plan Year Accounts within a Grandfathered
Account shall begin as soon as administratively feasible after the first day of the April immediately following the last day of the respective Deferral Period for each such Plan Year Account. 

  

	 	(ii)	Upon Involuntary Termination: In the event of a Participant’s Involuntary Termination, payment of each Plan Year Account within a Grandfathered Account shall begin as
soon as administratively practicable after the Participant’s date of Involuntary Termination, regardless of the Deferral Period elected. 

  

	 	(b)	For Plan Year Accounts within a 409A Account 

  

	 	(i)	General Rule: Except as provided in Section 5.1(b)(ii) through (v), the timing of payments to a Participant from any one or more Plan Year Accounts in his or her 409A
Account shall be in accordance with: 

  

	 	(A)	Section 5.1(a)(i), in the case of payments due to the expiration of the Deferral Period, or 

  

	 	(B)	Section 5.1(a)(ii), in the case of payments due to Involuntary Termination. Provided, however, in no event shall payments for an Involuntary Termination begin prior to the date
of a Participant’s Separation from Service. 

  

	 	(ii)	Separations At Early Age or With Short Service: Subject to paragraph (iii) below, if a Participant has a Separation from Service prior to the date he or she has both
attained age 55 and accrued at least five full Years of Service, the entire balance of his or her Plan Year Accounts within the 409A Account shall be payable in a single lump sum as soon as administratively practicable following the date of such
Separation from Service. 

  

			
	January 1, 2005 Restatement	  	Page 16

	 	(iii)	Six-Month Delay in Payment Due to Separation from Service of a Key Employee: In the case of payments due as a result of either a Participant’s Separation from Service
prior to age 55 and five Years of Service, or Involuntary Termination (without regard to age or service), if the Participant’s Separation from Service date results in a finding that he or she is to be treated as a Key Employee (as defined in
this Plan), the payment date shall be delayed six months, and the distribution of all Plan Year Accounts within the 409A Account shall therefore occur (or start) as soon as administratively practicable following the date that is six months from the
date of the Separation from Service. Investment earnings (or losses) shall continue to be credited to the Participant’s Account during the period of delay and on remaining balances through the date the Account is fully distributed. In the case
of payments in installments, only the first installment shall be delayed by six months, and the remaining annual installments shall be payable as of the anniversary date of the Separation from Service. 

  

	 	(iv)	Five-Year Delay in Payment Due to Re-Deferral Election: In the case of a Participant’s Re-Deferral Election that results in a change in the form of payment of any Plan
Year Account in a Participant’s 409A Account, the payment commencement date shall be delayed five years from the date the affected Plan Year Account would otherwise have commenced payment. Investment earnings shall continue to be credited to
the Participant’s Account during the period of delay and through the date the Account is fully distributed. In the case of payments in the form of annual installments, all installments shall be delayed by five years. Provided, however, that the
five-year delay described in this paragraph shall not apply to any distribution triggered by an event (such as death, Unforeseeable Emergency, or Separation from Service at an early age or with short service) that results, under the terms of this
Plan, in a mandatory immediate distribution in the form of a lump sum. 

  

	 	(v)	409A Account May Not Commence Payment in 2006: Notwithstanding any other provision of this Plan to the contrary, a payment from a Plan Year Account of a 409A Account that
would otherwise become payable between January 1 and December 31, 2006 shall commence instead on the later of (A) January 1, 2007, or (B) the date that is six months later than the deadline date established by the Plan
Administrator for the special transition-year election in Section 5.4(d). 

  

	5.2	Benefit Amount 

  

	 	(a)	The amount payable from the Plan shall be based on the balance of the one or more Plan Year Accounts for which payments are then due, measured as of the most recent Valuation Date
preceding the payment date. 

  

	 	(b)	If the form of payment is a lump sum, the amount payable shall be the entire balance of the applicable Plan-Year Account(s). 

  

			
	January 1, 2005 Restatement	  	Page 17

	 	(c)	If the form of payment is five or 10 annual installments, the amount due shall be the balance of the applicable Plan-Year Account(s) divided by the number of annual installments
remaining to be paid (including the installment then payable). 

  

	5.3	Payment Form 

  

	 	(a)	For Grandfathered Account 

 Except as provided in
Section 5.4(a) (which provides for election of a lump sum as an optional form of payment), all benefits shall be paid in annual installments over ten (10) years. The amount of each installment shall be as stated in Section 5.2(c). All
installment payments will be made as of April 1 of each year. 
  

	 	(b)	For 409A Account 

 Except in the case of Separation
from Service at an early age or with short service (where the entire Account shall be distributed as a lump sum), a Participant may elect on his or her Deferral Election Form for a Plan Year Account (or in a timely Re-Deferral Election) to receive
payment from the Plan Year Account in any of the three following forms (commencing at the time, and in the amounts, stated in Section 5.1 and 5.2): 
  

	 	(i)	Lump sum 

  

	 	(ii)	Annual installments over five years; or 

  

	 	(iii)	Annual installments over ten years. 

  

	5.4	Payment-Form Election 

  

	 	(a)	For Each Plan Year Account in a Grandfathered Account 

 Subject to approval of the Plan Administrator, a Participant may elect a single sum payment of his or her benefits provided that the election is made at least one (1) year before the April 1 as of which payments are to begin in
accordance with the initial Deferral Election Form. Once benefit payments commence, the payment form cannot be changed by the Participant or Beneficiary. Al1 payment-form elections shall be made in the form and manner prescribed by the Plan
Administrator and shall be subject to approval of the Plan Administrator. 
  

	 	(b)	For Each Plan Year Account in a 409A Account 

  

	 	(i)	Election on Deferral Election Form: For a 409A Account, at the time of completing his or her Deferral Election Form for a future PBP bonus, the Participant who is electing to
defer any or all of such PBP bonus shall elect a form of payment, in accordance with Section 5.3(b), for that Plan Year Account. In the absence of a stated election of the form of payment (or in case of an election of a form of payment that is
not permitted by the Plan), the Plan Year Account shall be payable in a lump-sum by default. 

  

			
	January 1, 2005 Restatement	  	Page 18

	 	(ii)	Irrevocable Election: Except as provided in subsection (c) below, or in the absence of an intervening event that results in a lump-sum distribution becoming payable
pursuant to the terms of this Plan, the Participant’s election for the Plan Year Account of the 409A Account (or, in the absence of a timely election, the default form of payment) shall become irrevocable on the deadline stated in
Section 2.4(b). 

  

	 	(c)	Re-Deferral Election for a Plan Year Account of a 409A Account 

 As applied to a Plan Year Account of a 409A Account, the provisions of this subsection (c) shall be available to a Participant, with regard to either a deferred PBP bonus Account, a Deferred Retention Incentive
Account or an OSRP Account. A Participant may elect to change the form of payment for a Plan Year Account (or for a Deferred Retention Incentive or OSRP Account), but only if (i) the new form of payment selected is an optional form under the
then-existing terms of Section 5.3(b); and (ii) the new election form is received by the Plan Administrator in final signed form at least 12 full months prior to the date the Plan Year Account (or Deferred Retention Incentive or OSRP
Account) would otherwise have been due to commence payment. 
  

	 	(d)	Special Transition-Year Election of Form of Payment 

 Not later than December 31, 2006, the Plan Administrator shall administer one or more special transition-year election processes that comply with the rule of Code Section 409A that allows a Participant to elect a form of payment
for any Plan Year Account under a 409A Account as late as December 31, 2006. In each case, the Plan Administrator shall establish a deadline for the return of any such transition-year election. Any such election shall be treated as though it
were a timely initial election of the form of payment of the respective Plan Year Account, rather than as a Re-Deferral Election. 
  

	5.5	Hardship Distributions 

  

	 	(a)	For Grandfathered Accounts 

 The terms of this
Section 5.5(a) shall apply to each Grandfathered Account. 
 A Participant may apply to the Plan Administrator for a hardship
distribution from his or her Grandfathered Account before the date benefits would otherwise commence. Such a hardship distribution is subject to Plan Administrator approval, and is available only for an unanticipated emergency caused by an event
beyond the Participant’s control that results in a severe financial hardship. Examples of expenses that will not be considered severe financial hardships include the purchase of a residence and educational expenses. The amount of a hardship

  

			
	January 1, 2005 Restatement	  	Page 19

 
distribution may not exceed the amount needed to meet the emergency and may not exceed the value of the Participant’s vested Accounts. A hardship
distribution will be paid from the Employer’s general assets, and the Participant’s Account will be reduced as of the distribution date by the amount of the distribution. 
  

	 	(b)	For 409A Accounts 

 The terms of this
Section 5.5(b) shall apply to a Participant’s 409A Account; provided, however, that a Participant’s Deferred Retention Incentive Account or OSRP Account shall not be eligible for hardship withdrawal under this Plan. 
 In the event of a Participant’s Unforeseeable Emergency, a Participant may request, and the Plan Administrator may approve, a withdrawal from the
vested balance of the Participant’s 409A Account (without regard to any Deferred Retention Incentive Account or OSRP Account). In such a case, the burden of proof shall be on the Participant to produce information sufficient to demonstrate to
the Plan administrator the existence of the Unforeseeable Emergency, the inadequacy or lack of availability of other resources, and the amount required to satisfy the need. 
  

	 	(i)	Amount of Payment: Distributions because of an Unforeseeable Emergency shall be limited to the amount that the Plan administrator determines to be reasonably necessary
to satisfy the emergency need (which may include amounts necessary to pay any Federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution). 

  

	 	(ii)	To the Extent Other Sources Are Insufficient: A distribution on account of an Unforeseeable Emergency may not be made to the extent that the emergency is or may be
relieved through reimbursement from insurance or otherwise, or by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship. 

  

	 	(iii)	Order of Withdrawal: The amount shall be withdrawn from a Participant’s vested Account, starting with the Plan Year Account(s) scheduled to become payable at the
earliest date, and then the one or more other Plan Year Account(s) in the chronological order that they are scheduled to become payable; provided, however, that no portion of such amount may be withdrawn from any Deferred Retention Incentive Account
or OSRP Account. 

 Section 6: CHANGE OF CONTROL
BENEFITS 
 The provisions of this Section 6 shall apply solely to a Participant’s Grandfathered Account (if
any), and not to a Participant’s 409A Account; provided, however, that a 409A Account that is 

  

			
	January 1, 2005 Restatement	  	Page 20

 
less than fully vested shall be 100% vested upon the occurrence of a Change of Control prior to a Participant’s Separation from Service, as stated in
Sections 9.3(c)(ii) and 10.3(c)(ii). Moreover, the special restriction on Plan amendments following a Change of Control, as stated in Section 12.1(a)(iii), shall apply to any Plan amendment, whether it affects Grandfathered Accounts, 409A
Accounts, or both. 
  

	6.1	Change of Control Benefit 

 Notwithstanding any other provision of
the Plan, in the event of a Change of Control, each Participant (or his or her Beneficiary), except a Participant Terminated For Cause before the date of the Change of Control, shall receive a Change of Control Benefit in accordance with this
Section 6, in lieu of any other benefits payable under this Plan. A Participant’s Change of Control Benefit shall be a lump-sum payment of the aggregate balance of the Participant’s Grandfathered Account (if any), determined as of the
Valuation Date immediately preceding the date of payment. 
  

	6.2	Form of Payment 

 All Change of Control Benefits shall be paid in
the form of a single sum payment within sixty (60) days after a Change of Control. 
  

	6.3	Termination of Grandfathered Account Features of Plan 

 After
payment of all Change of Control Benefits, the provision of this Plan that pertain to Grandfathered Accounts shall terminate automatically, and no Participant or Beneficiary will have any further rights with regard to Grandfathered Accounts under
the Plan. 
 Section 7: DEATH BENEFITS 
  

	7.1	Death After Benefit Payments Begin 

 If a Participant dies after
benefit payments have begun in a form other than a single sum, but before receiving all payments to which the Participant is entitled under the Plan, the aggregate balance of the Participant’s entire Account shall be paid to the
Participant’s Beneficiary in a single sum as soon as administratively feasible after the date of death. 
  

	7.2	Death Before Benefit Payments Begin 

 If a Participant dies before
benefit payments begin, the aggregate balance of the Participant’s entire Account shall be paid to the Participant’s Beneficiary in a single sum as soon as administratively feasible, after the date of death. 
  

			
	January 1, 2005 Restatement	  	Page 21

 Section 8: VESTING 
  

	8.1	Vesting 

 Except as provided in Section 9 (“Deferred
Retention Incentive Accounts”) and Section 10 (“Defined Contribution OSRP Accounts”), each Participant shall at all times have a vested, nonforfeitable right to all portions of the Participant’s Account under this Plan.

 Section 9: DEFERRED RETENTION INCENTIVE ACCOUNTS 

  

	9.1	Purpose 

 The Chief Executive Officer of the Company (the
“CEO”), with the approval of the Compensation Committee or in accordance with a policy approved by the Compensation Committee, may, in his or her sole discretion, from time to time, and for any one or more Highly Compensated Employees,
grant a Deferred Retention Incentive and cause the Plan Administrator to establish a Deferred Retention Incentive Account under the Plan, all in accordance with this Section 9. 
  

	9.2	Definitions 

  

	 	(a)	Deferred Retention Incentive 

 “Deferred
Retention Incentive” means a grant negotiated and made by the CEO, with the approval of the Compensation Committee or in accordance with a policy approved by the Compensation Committee, to a Highly Compensated Employee (or to an individual who
has accepted an offer of employment as a Highly Compensated Employee, subject to the individual actually commencing employment), which is expressed as a dollar amount to be credited to a Deferred Retention Incentive Account, subject to forfeiture or
vesting. A Deferred Retention Incentive may serve as either a form of deferred hiring bonus, or as a form of deferred bonus for an active Employee that is intended to provide an incentive to continue to provide services to the Employer. Any Deferred
Retention Incentive grants will be listed by name and date in Appendix II of this Plan. 
  

	 	(b)	Deferred Retention Incentive Account 

 “Deferred Retention Incentive Account” means a 409A Account under this Plan for a Participant who is the recipient of a Deferred Retention Incentive grant, and which represents the principal amount of such grant and the earnings
(or losses) of the Investment Funds in which such Account is invested by the Participant. 
  

	 	(c)	Deferred Retention Incentive Agreement 

 “Deferred Retention Incentive Agreement” means a form-of-payment election form and a letter, in writing, from the CEO to the recipient of a Deferred 

  

			
	January 1, 2005 Restatement	  	Page 22

 
Retention Incentive, countersigned by the recipient, stating the dollar amount of the grant, the effective date of the establishment of the Deferred
Retention Incentive Account, and any other terms applicable to such grant which are not inconsistent with the terms of this Plan, and appending a copy of this Plan. 
  

	 	(d)	Highly Compensated Employee 

 A “Highly
Compensated Employee” means an Employee who is a member of a select group of management or highly compensated employees (within the meaning of §§ 201(2), 301(a)(3) and 401(a)(1) of ERISA), and who has been selected by the CEO, with
the approval of the Compensation Committee or in accordance with a policy approved by the Compensation Committee, to receive a Deferred Retention Incentive under this Plan. 
  

	 	(e)	Irrevocability Date 

 For purposes of this
Section 9, “Irrevocability Date” shall mean the close of business on the 30th day following the date the Deferred Retention Incentive Agreement is delivered to the grantee of the Deferred Retention Incentive. 
  

	9.3	Deferred Retention Incentive Account 

  

	 	(a)	Election of Form of Benefit Payment 

 Consistent
with Section 5.3(b), the optional forms of payment for a Deferred Retention Incentive Account shall be: 
  

	 	(i)	Lump sum (which shall be the default form); 

  

	 	(ii)	Annual installments over five years; or 

  

	 	(iii)	Annual installments over ten years. 

 During the 30-day
period starting with the date of delivery of a Deferred Retention Incentive Agreement and election form to a grant recipient, the recipient may elect one of the three optional forms of benefit. The form of benefit elected shall become irrevocable
(except to the extent of any Re-Deferral Election under Section 5.4(c)) on the Irrevocability Date. In the absence of a complete and signed election being delivered by the Irrevocability Date, the default form of payment shall be a lump sum.

  

	 	(b)	Special Rules for Form and Timing of Payments 

 In
the event of a Participant’s Separation from Service prior to attaining age 55 and five Years of Service, the elected form of benefit shall be disregarded, and the balance of the Deferred Retention Incentive Account shall be distributed as a
lump sum, as further described in Section 5.1(b)(ii) (and 5.1(b)(iii), if applicable). 
  

			
	January 1, 2005 Restatement	  	Page 23

 Moreover, this Section 9.3 is subject to the terms of Section 7 (in the event of the
Participant’s death). 
  

	 	(c)	Vesting 

 The balance (including investment earnings
or losses) of a Deferred Retention Incentive Account shall initially be 0% vested, and the balance shall vest according to the vesting terms stated in the Deferred Retention Incentive Agreement. Provided, however, that, notwithstanding any terms in
any such Agreement to the contrary, under no circumstances may any portion of a Deferred Retention Incentive Account vest earlier than the first anniversary of the Irrevocability Date. 
 In the absence of terms to the contrary in the Deferred Retention Incentive Agreement, the balance of the Account shall vest during active employment as
follows: 
  

	 	(i)	100% vesting upon the death of the Participant prior to Separation from Service; 

  

	 	(ii)	100% vesting upon a Change of Control prior to Separation from Service; 

  

	 	(iii)	20% vesting upon the completion of each full “Year of Service” (as that term is defined in the AlaskaSaver 401(k) Plan), with 100% vesting occurring upon the completion of
the fifth such Year of Service; provided, however, that no portion of the Account shall vest earlier than the first anniversary of the Irrevocability Date. 

  

	 	(d)	Other Terms Applicable to a Deferred Retention Incentive Account 

 In general, a Deferred Retention Incentive Account shall be subject to the terms of Sections 4, 5, 6, 7, 11, 12 and 13 of this Plan that apply to a Plan Year Account of a 409A Account. As the context requires, a
reference in this Plan to a 409A Account (or a Plan Year Account of a 409A Account) shall be interpreted to include any Deferred Retention Incentive Account. 
 Section 10: DEFINED CONTRIBUTION OSRP ACCOUNTS 
  

	10.1	Purpose 

 For certain Eligible Elected Officers who are not eligible
to participate in the 1995 Elected Officers Supplemental Retirement Plan (“1995 OSRP”), this Section 10 (sometimes referred to as the “Defined Contribution OSRP Plan”) serves as a complementary program for certain purposes
similar to those served by the 1995 OSRP, for individuals who are not eligible to participate in the 1995 OSRP. 
  

			
	January 1, 2005 Restatement	  	Page 24

	10.2	Definitions 

  

	 	(a)	Eligibility Effective Date 

 “Eligibility
Effective Date” means the date determined by action of the Compensation Committee, or in accordance with a policy approved by that Committee, which shall be the effective date for a Participant’s participation in the Defined Contribution
OSRP Plan. 
  

	 	(b)	Eligible Elected Officer 

 “Eligible Elected
Officer” means an Employee of an Employer, as follows: 
  

	 	(i)	who occupies a position (or has accepted a position) as a member of a select group of management or highly compensated employees (within the meaning of §§ 201(2),
301(a)(3) and 401(a)(1) of ERISA); 

  

	 	(ii)	who either: 

  

	 	(A)    (1)	commences (or re-commences) employment as an Employee of an Employer after March 31, 2003, or is re-assigned or promoted to a different classification of employment after that
date, and 

  

	 	             (2) 	is not eligible upon the occurrence of the event in clause “(1)” above to actively participate in (i.e. accrue new or additional benefits under) a tax-qualified defined
benefit pension plan maintained by his or her Employer for management employees; 

 or 
  

	 	(B)	elected the enhanced Employer match program under the tax-qualified defined contribution plan maintained by the Employer instead of the Employer’s tax-qualified defined benefit
pension plan, and was promoted on or after January 1, 2006 to an elected officer position; and 

  

	 	(iii)	who either 

  

	 	(A)	is approved by the Compensation Committee as eligible to participate in the Defined Contribution OSRP Plan, or 

  

	 	(B)	is hired or promoted into a position at a level or with a title, in accordance with a policy approved by the Compensation Committee, that is eligible to participate in the Defined
Contribution OSRP Plan. 

  

			
	January 1, 2005 Restatement	  	Page 25

	 	(c)	Irrevocability Date 

 For purposes of this
Section 10, “Irrevocability Date” shall mean the deadline for a Participant to elect a form of payment for the OSRP Account by returning a completed and signed form-of-benefit election form. The Irrevocability Date shall be the close
of business on the 30th day following the Eligibility Effective Date. 
  

	 	(d)	OSRP Account 

 “OSRP Account” means an
Account established under the terms of this Section 10 for an Eligible Elected Officer. Any OSRP Accounts will be listed by the name of the Eligible Elected Officer and the Eligibility Effective Date in Appendix III of this Plan. 
  

	 	(e)	OSRP Eligible Compensation 

 “OSRP Eligible
Compensation” for a Participant for a Plan Year means the sum of: 
  

	 	(i)	the gross amount of base recurring salary paid to the Participant during the Plan Year (or, if less, the portion of the Plan Year during which the Participant was an Eligible
Elected Officer); plus 

  

	 	(ii)	the gross amount of any short-term annual cash bonus awarded to the Participant, if paid or payable as of a date when the Participant was an Eligible Elected Officer.

 The amounts in “(i)” and “(ii)” shall each be the gross dollar amount determined prior to any tax
withholding, other deductions or withheld after-tax or pre-tax amounts, or any pre-tax deferrals to any Account in this Plan or any other qualified or nonqualified deferred compensation plan or arrangement. 
  

	 	(f)	OSRP Employer Contribution 

 “OSRP Employer
Contribution” for a Plan Year means an annual Employer contribution to the OSRP Account of each Participant who is an active Eligible Elected Officer during part or all of such Plan Year. The amount of the annual OSRP Employer Contribution for
a Plan Year shall be equal to: 
  

	 	(i)	10 percent of the Participant’s OSRP Eligible Compensation; minus 

  

	 	(ii)	the amount of Employer matching contributions that would have been credited during the Plan Year to the Participant’s individual account under the Qualified Plan in which he or
she is eligible to participate, determined as if the Participant had contributed the maximum legally permissible amount of matchable elective deferrals to the Qualified Plan during the Plan Year (or, if less, the portion of the Plan Year in which he
or she was eligible to defer to the Qualified Plan). 

  

			
	January 1, 2005 Restatement	  	Page 26

 The amount of the OSRP Employer Contribution shall be determined and credited to a Participant’s
OSRP Account as soon as practicable following the end of a Plan Year; provided, however, for a Participant who has a Separation from Service (or dies) during a Plan Year, the amount shall be determined and credited to the OSRP Account as soon as
practicable following the event triggering a distribution. 
  

	10.3	Terms Applicable to OSRP Accounts 

  

	 	(a)	Election of Form of Benefit Payment 

 Consistent
with Section 5.3(b), the optional forms of payment for an OSRP Account shall be: 
  

	 	(i)	Lump sum (which shall be the default form); 

  

	 	(ii)	Annual installments over five years; or 

  

	 	(iii)	Annual installments over ten years. 

 During the 30-day
period starting with the date of delivery of an election form, the recipient of the form may elect one of the three optional forms of benefit, and the form of benefit elected shall become irrevocable (except to the extent of any Re-Deferral Election
under Section 5.4(c) on the Irrevocability Date. In the absence of a complete and signed election being delivered by the Irrevocability Date, the default form of payment shall be a lump sum. 
 Notwithstanding the previous paragraph, a Participant who first becomes an Eligible Elected Officer prior to December 31, 2006 shall make his or her
initial election of the form of payment for the OSRP Account in a special 2006 transition-year election process, as described in Section 5.4(d). 
  

	 	(b)	Special Rules for Form and Timing of Payments 

 In
the event of a Participant’s Separation from Service prior to attaining age 55 and five Years of Service, the elected form of benefit shall be disregarded, and the balance of the Deferred Retention Incentive Account shall be distributed as a
lump sum, as further described in Section 5.1(b)(ii) (and 5.1(b)(iii), if applicable). Moreover, this Section 10.3 is subject to the terms of Section 7 (in the event of the Participant’s death). 
  

	 	(c)	Vesting 

 The balance (including investment earnings
or losses) of an OSRP Account shall initially be 0% vested, and shall vest as follows: 
  

	 	(i)	100% vesting upon the death of the Participant prior to Separation from Service; 

  

			
	January 1, 2005 Restatement	  	Page 27

	 	(ii)	100% vesting upon a “Change of Control prior to Separation from Service; 

  

	 	(iii)	20% vesting upon the completion of each full “Year of Service” (as that term is defined in the AlaskaSaver 401(k) Plan), with 100% vesting occurring upon the completion of
the fifth such Year of Service; provided, however, that no portion of the Account shall vest earlier than the first anniversary of the Irrevocability Date. 

  

	 	(d)	Other Terms Applicable to an OSRP Account 

 In
general, an OSRP Account shall be subject to the terms of Sections 4, 5, 6, 7, 11, 12 and 13 of this Plan that apply to a Plan Year Account of a 409A Account. As the context requires, a reference in this Plan to a 409A Account shall be interpreted
to include any OSRP Account. 
 Section 11: ADMINISTRATIVE POWERS AND
DUTIES 
  

	11.1	Administrative Oversight; Appointment of Plan Administrator 

 The
Compensation Committee shall have the authority and responsibility to oversee the administration of the Plan, and, on and after July 1, 2006, to appoint and replace the Plan Administrator, who shall be a person who may, but need not, be an
Employee or Elected Officer of an Employer. 
 Prior to July 1, 2006, the Plan shall be administered by the Administrative Committee which shall be
appointed by the Chairman of the Board, with the Chairman of the Board serving as Chairman of the Administrative Committee. The Administrative Committee shall be composed of at least three (3) members, all of whom are Elected Officers. No bond
or other security shall be required of any Administrative Committee member in such capacity. The Chairman of the Board shall be the Chairman of the Administrative Committee. 
 An individual serving as Plan Administrator on or after July 1, 2006 (or a member of the Administrative Committee prior to that date) may participate in the Plan if he or she is otherwise eligible to do so.

 On and after July 1, 2006, the Plan Administrator shall be responsible for day-to-day administration of the Plan and shall furthermore be responsible
for day-to-day oversight of the performance of duties by any third-party recordkeeper or third-party administrator(s) that provides services to the Plan. 
  

	11.2	Powers and Duties 

 The Plan Administrator (and, in the event of an
appeal, the Review Committee) shall have the power and the duty to take all action and to make all decisions necessary or proper to carry out the Plan, including the discretionary authority to interpret the provisions of the Plan and the facts and
circumstances of claims for benefits. The Plan Administrator (and, in the event of an appeal, 

  

			
	January 1, 2005 Restatement	  	Page 28

 
the Review Committee) shall have the absolute discretion to decide all issues of fact or law. Any decision by the Plan Administrator or Review Committee that
is not shown to be an abuse of discretion must be upheld by a court of law. Without limiting the foregoing, the Plan Administrator (on and after July 1, 2006, with the oversight of the Compensation Committee) shall have the following
administrative powers and duties: 
  

	 	(a)	to require any Participant or Beneficiary to furnish information as they may request for the purpose of the proper administration of the Plan as a condition to receiving any benefit
under the Plan; 

  

	 	(b)	to make and enforce rules and regulations and prescribe the use of forms as they shall deem necessary for the efficient administration of the Plan; 

  

	 	(c)	to interpret the Plan and to resolve ambiguities, inconsistencies and omissions in a nondiscriminatory manner; 

  

	 	(d)	to determine tax withholding; 

  

	 	(e)	to compute the amount of benefits which shall be payable to any person in accordance with the provisions of the Plan; and 

  

	 	(f)	to delegate any of the Plan Administrator’s administrative powers or duties hereunder to any of their agents or employees, including without limitation an entity appointed to
serve as a third-party recordkeeper or administrator. 

  

	11.3	Committee Procedures 

  

	 	(a)	Compensation Committee After July 1, 2006 

 A
majority of the Compensation Committee members in office may fulfill any act which the Plan authorizes or requires of the Compensation Committee. A majority of Compensation Committee members may delegate in writing to the Chair of the Compensation
Committee the authority to take any action, and/or to give certified notice in writing of any action, taken by the Compensation Committee or its Chair. 
  

	 	(b)	Administrative Committee Prior to July 1, 2006 

 Prior to July 1, 2006, while the Administrative Committee is serving as the Committee, no Administrative Committee member who participates in the Plan shall vote on any matter that pertains to the member or to the member’s rights
and/or benefits under the Plan unless such matter pertains to all Participants or all Participant’s rights and/or benefits under the Plan. Each member of the Administrative Committee shall be excused from voting on any action pertaining solely
to the member or members of the Administrative Committee or their rights and/or benefits under the Plan, and the action shall be taken by a majority of the remaining members of the Administrative Committee, or if the remaining members do not
constitute a quorum, by the Compensation Committee. The 

  

			
	January 1, 2005 Restatement	  	Page 29

 
action of such majority of the Administrative Committee expressed from time to time by a vote at a meeting, or in writing without a meeting, shall constitute
the action of the Administrative Committee and shall have the same effect for all purposes as if assented to by all Administrative Committee members. 
  

	11.4	Appointment of Agents 

 The Compensation Committee and the Plan
Administrator may each appoint such actuaries, accountants, counsel, specialists, recordkeepers and other persons or organizations as they shall respectively deem necessary for administration of the Plan and they each shall be entitled to prudently
rely upon any tables, valuations, certificates, opinions, or reports which shall be furnished to them by such persons or organizations. 
  

	11.5	Administrative Expenses 

 All expenses incurred by the Plan
Administrator or Compensation Committee in connection with the administration of the Plan, including but not limited to the compensation of any actuary, accountant, counsel, specialist, recordkeeper or other persons or organizations who shall be
employed in connection with the administration of the Plan, shall be paid by the Company. 
  

	11.6	Determinations 

 All determinations hereunder made by the Board,
Compensation Committee or Plan Administrator shall be made in the sole and absolute discretion of the Board, Compensation Committee or Plan Administrator, as the case may be. 
 In the event that any disputed matter shall arise hereunder, including, without in any manner limiting the generality of the foregoing, any matter relating to the eligibility of any person to participate under the
Plan, the participation of any person under the Plan, the amounts payable to any person under the Plan, and the applicability and the interpretation of the provisions of the Plan, the decision of the Board, Compensation Committee or Plan
Administrator upon such matter shall be binding and conclusive upon all persons, including, without in any manner limiting the generality of the foregoing, the Company, the Board, all persons at any time in the employ of an Employer, the
Participants and their Beneficiaries, and upon the respective successors, assigns, executors, administrators, heirs, next of kin, and distributees of all the foregoing. 
  

	11.7	Claim and Review Procedure 

  

	 	(a)	Application for Benefits 

 Any person or the
person’s authorized representative (the “Claimant”) may apply for, claim, or request information about, Plan benefits by submitting a signed, written application to the Plan Administrator. 
  

			
	January 1, 2005 Restatement	  	Page 30

	 	(b)	Denial of Application 

 If the Plan Administrator
denies an application in whole or in part, the Plan Administrator shall notify the Claimant in writing or electronically of the denial and the Claimant’s right to request a review of the denial. The notice of denial shall set forth, in a manner
calculated to be understood by the Claimant: 
  

	 	(i)	specific reasons for the denial, 

  

	 	(ii)	specific references to the applicable Plan provisions on which the denial was based, 

  

	 	(iii)	a description of any information or material necessary to perfect the application and an explanation of why such material is necessary, 

  

	 	(iv)	an explanation of the Plan’s review procedure and the time limits for review, and 

  

	 	(v)	a statement of the Claimant’s right to bring a civil action under ERISA following an adverse determination on review. 

 The denial notice will be given to the Claimant within ninety (90) days after the Plan Administrator receives the application unless special
circumstances require an extension of time for processing the application. In no event will an extension exceed a period of ninety (90) days after the end of the initial 90-day period. If an extension is required, written notice of the
extension shall be furnished to the Claimant before the end of the initial 90-day period. The extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render a
decision. If a written denial notice is not given to the Claimant within the period prescribed by this Section 11.8(b), the application is deemed to have been denied for purposes of Section 11.8(d). 
  

	 	(c)	Review Panel 

 From time to time, the Chair of the
Compensation Committee shall appoint a Review Panel. The “Review Panel” will consist of three (3) or more individuals who may be (but need not be) members of the Compensation Committee or Employees of an Employer and shall be the
named fiduciary with authority to act on any appeal of a denied application. The Review Panel has discretionary authority to decide all issues of fact or law. Any decision by the Review Panel that is not established to be an abuse of discretion must
be upheld. 
  

	 	(d)	Request for Review 

 A Claimant whose application is
denied, in whole or in part, may appeal the denial by submitting to the Review Panel a written request for a review of the denial. The request for review must be submitted to the Review Panel within 

  

			
	January 1, 2005 Restatement	  	Page 31

 
sixty (60) days after the Claimant receives written notice of the denial. Upon request and free of charge, the Claimant shall be permitted reasonable
access to, and copies of, relevant information and documents. The Review Panel shall give the Claimant an opportunity to submit written information, documents, records and comments in support of the appeal. In making its decision, the Review Panel
will take the Claimant’s submissions into account, regardless of whether this information was available in considering the initial request. 
  

	 	(e)	Decision on Review 

 The Review Panel will deliver
to the Claimant an electronic or written decision within a reasonable time, but no later than sixty (60) days after receipt of the Claimant’s request for review. In special circumstances, the period may be extended up to an additional
sixty (60) days. If an extension is required, written notice of the extension will be furnished to the Claimant before the end of the initial 60-day period. The extension notice will indicate the special circumstances requiring an extension of
time and the date by which the Review Panel expects to render a decision. If a written decision is not given to the Claimant within the period prescribed by this Section 11.8(e), the decision is deemed to be adverse. If the decision is adverse,
in whole or in part, the decision shall set forth in a manner calculated to be understood by the Claimant: 
  

	 	(i)	specific reasons for the adverse decision with specific references to the applicable Plan provisions on which the decision was based, 

  

	 	(ii)	a statement that, upon request and free of charge, the claimant is entitled reasonable access to, and copies of, relevant information and documents, 

  

	 	(iii)	a description of any voluntary appeals procedures and a statement of the Claimant’s right to obtain information about these procedures, and 

  

	 	(iv)	a statement of the Claimant’s right to bring a civil action under ERISA. 

  

	 	(f)	Rules and Procedures 

 The Plan Administrator and
the Review Panel shall establish additional administrative procedures in accordance with this Section 11.8 and ERISA as they deem necessary or appropriate, including safeguards to insure and verify that decisions under this Section 11.8
are made in accordance with the Plan document and are applied consistently to similarly-situated Participants and Beneficiaries. Additional administrative procedures may include, but are not limited to, protocols, guidelines, periodic review and
audits. 
  

	 	(g)	Exhaustion of Administrative Remedies 

 No legal or
equitable action for benefits under the Plan shall be brought unless and until the Claimant has satisfied the procedures in this Section 11.8. 
  

			
	January 1, 2005 Restatement	  	Page 32

	11.8	Exemption From Liability/Indemnification 

 The members of the Board,
Compensation Committee and Plan Administrator, collectively and individually, shall be free from all liability, joint or several, for their acts, omissions, and conduct, and for the acts, omissions, and conduct of their duly-appointed agents, in the
administration of the Plan, except for those acts or omissions and conduct resulting from willful misconduct or lack of good faith. 
 The Company shall
indemnify each member of the Board, Compensation Committee and Plan Administrator, and any other employee, officer, or director of an Employer against any claims, loss, damage, expense, or liability, by insurance or otherwise (other than amounts
paid in settlement not approved by the Company), reasonably incurred by the individual in connection with any action or failure to act by reason of membership on the Board or Compensation Committee or in the role of Plan Administrator, or
performance of an authorized duty or responsibility for or on behalf of the Company pursuant to the Plan, unless the same is judicially determined to be the result of the individual’s gross negligence or willful misconduct. Such indemnification
by the Company shall be made only to the extent such expense or liability is not payable to or on behalf of such person under any liability insurance coverage. The foregoing right to indemnification shall be in addition to any other rights to which
any such person may be entitled as a matter of law. 
 Section 12: AMENDMENT AND
TERMINATION 
  

	12.1	Amendment or Termination 

  

	 	(a)	Right to Amend or Terminate 

 Except as otherwise
provided in this Section, the Company reserves the right at any time and from time to time to amend any or all provisions of the Plan or terminate the Plan, in whole or in part, for any reason and without consent of any person, and without liability
to any person for such amendment or termination. Notwithstanding the preceding sentence, no amendment of the Plan shall: 
  

	 	(i)	adversely affect the benefits or rights of a Participant or Beneficiary under the Plan (other than election or availability of a form of benefit payment under Section 4, 9 or
10) earned and vested as of the effective date of the amendment without the written consent of each affected Participant and Beneficiary unless such change is required by law or regulations or is necessary to avoid unfavorable tax consequences; or

  

	 	(ii)	adversely affect the features of the Plan in effect as of the effective date of the amendment without the written consent of each affected Participant and Beneficiary unless such
change is required by law or regulations or is necessary to avoid unfavorable tax consequences; or 

  

			
	January 1, 2005 Restatement	  	Page 33

	 	(iii)	be adopted or become effective after a Change of Control without the written consent of all Participants and Beneficiaries. 

  

	 	(b)	Plan Termination 

 Nothing in this Plan shall be
construed to require continuation of this Plan with respect to existing or future Participants or Beneficiaries. 
 Notwithstanding
Section 12.1(a)(i), the Company may amend the Plan to cease all future Contributions and/or OSRP Employer Contributions and shall pay benefits according to the then existing or amended distribution provisions. Notwithstanding
Section 12.1(a)(i), the Company may terminate the Plan and in that event, shall distribute the balance of any and all Plan Year Accounts which are Grandfathered Accounts (but not any 409A Accounts) as soon as administratively feasible in the
form of single sum payments determined as though the benefits were Change of Control Benefits under Section 6. 
 It is the
Company’s intention that, except as expressly stated to the contrary at the time of adopting an amendment, no amendment of this Plan is intended to cause a “material modification” (within the meaning of Code Section 409A) of any
portion of any Participant’s Grandfathered Account. In the event that the Company determines, with the advice of counsel, that any previously adopted amendment that was not intended to be a material modification may be deemed to be a material
modification, the Company shall have the right to revoke any such amendment retroactively to the full extent permitted by Code Section 409A. 
 Notwithstanding any provision of this Plan to the contrary, the Company may, on any date on or before December 31, 2006, amend or modify the Plan retroactively to a date as early as January 1, 2005, to the extent that the Company,
with advice of counsel, determines it advisable to do so in light of the provisions and interpretations of Code Section 409A. 
  

	 	(c)	Procedures 

 Any amendment or termination of the
Plan shall be adopted by the Board, made in writing, and executed on behalf of the Company by the Chair of the Compensation Committee (or, prior to July 1, 2006, by an authorized officer of the Company). 
 Section 13: MISCELLANEOUS PROVISIONS 
  

	13.1	Appendices 

 Any Appendix to this Plan, as amended from time to
time, is incorporated into the Plan and made a part of the terms and conditions of this Plan. 
  

			
	January 1, 2005 Restatement	  	Page 34

	13.2	ERISA Status 

 This Plan shall constitute a plan which is unfunded
and which is maintained primarily for the purpose of providing deferred compensation benefits for a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA. 
  

	13.3	Unfunded Nature of the Obligation 

 The obligation to pay benefits
under the Plan shall at all times be an unfunded, unsecured obligation of the Employer. The Employer is not obligated to purchase any annuity contracts to provide benefits under the Plan, to establish a trust for the purpose of receiving
contributions and paying benefits under the Plan, or to otherwise set aside funds for the purpose of providing Plan benefits. 
  

	13.4	Facility of Payment 

 In the event any benefit under this Plan shall
be payable to a person who is under legal disability or is in any way incapacitated so as to be unable to manage his or her financial affairs, the Plan Administrator may direct payment of such benefit to a duly appointed guardian, committee or other
legal representative of such person, or in the absence of a guardian or legal representative, to a custodian for such person under a Uniform Gifts to Minors Act or to any relative of such person by blood or marriage, for such person’s benefit.
Any payment made in good faith pursuant to this provision shall fully discharge the Company and the Plan of any liability to the extent of such payment. 
  

	13.5	Governing Law 

 The Plan shall be construed in accordance with
applicable provisions of the Code, ERISA and the laws of the State of Washington, to the extent not preempted by ERISA. 
  

	13.6	Limitation on Assignment; Domestic Relations Orders 

  

	 	(a)	Limitation on Assignment, Attachment, Garnishment 

 Except as provided in “(b)”, benefits under this Plan may not be assigned, sold, transferred, or encumbered, and any attempt to do so shall be void, and a Participant’s or Beneficiary’s interest in benefits under the
Plan shall not be subject to debts or liabilities of any kind and shall not be subject to attachment, garnishment or other legal process. 
  

	 	(b)	Domestic Relations Orders 

 The Plan Administrator
(subject to review by the Review Panel, in accordance with Sections 11.7(c) through (g), in case of an appeal by the Participant or an alternate payee) shall follow – if, when, and to the extent a Participant is receiving a distribution (or
series of distributions) of benefits under the Plan – any judgment, decree or order of a state court (including court approval of a property settlement agreement) which: 
  

	 	(i)	relates to the provision of child support, alimony payments or marital property rights made pursuant to a state domestic relations law (including a community property law),

  

			
	January 1, 2005 Restatement	  	Page 35

	 	(ii)	provides an alternate payee with a right to receive all or a stated portion of one or more subsequent distributions which would otherwise then be payable entirely to the Participant
or a Beneficiary under the otherwise applicable provisions of this Plan, and 

  

	 	(iii)	satisfies the requirements of Code Sections 414(p)(2) and (3). 

  

	13.7	No Additional Rights. 

 No person shall have any rights under the
Plan, except as, and only to the extent, expressly provided for in the Plan. Neither the establishment or amendment of the Plan or the creation of any fund or account, or the payment of benefits, nor any action of an Employer or the Board,
Compensation Committee or Plan Administrator shall be held or construed to confer upon any person any right to be continued as an employee, or, upon dismissal, any right or interest in any account or fund other than as herein provided. The Company
and the other Employers expressly reserve the right to discharge any employee at any time with or without cause. 
  

	13.8	Notice 

 All notices, statements, reports and other communications
from the Company, Board, Compensation Committee or Plan Administrator to any employee or other person required or permitted under the Plan shall be deemed to have been duly given when delivered to, or when mailed by first-class mail, postage prepaid
and addressed to, such employee, or other person at his or her address last appearing on the Employer’s records. 
  

	13.9	Severability 

 If any provision of this Plan is held unenforceable
or invalid for any reason, such determination shall not affect the remaining provisions of this Plan which shall be construed as if the unenforceable or invalid provisions had never been included. 
  

	13.10 	Tax Consequences and Withholding 

 The Company does not represent or
guarantee that any particular federal or state income, payroll, Social Security, or other tax consequences will result from participation in the Plan. A Participant should consult with professional tax advisors to determine the tax consequences of
his or her participation in the Plan. 
 All payments of federal or state income, Social Security, payroll, or other tax required with respect to
contributions or benefits under the Plan shall be satisfied by withholding the required amount from the Participant’s salary, other current compensation or Plan benefit payment, or if 

  

			
	January 1, 2005 Restatement	  	Page 36

 
the Participant’s salary, other current compensation or benefit payment is insufficient to satisfy any required tax payments, the Participant shall
satisfy the payments in a manner approved by the Plan Administrator. 
 The prior paragraph shall likewise apply to any tax withholding obligation of a
Participant that results from the vesting (rather than the distribution) of any or all of any Deferred Retention Incentive Account or any OSRP Account. 
 Determinations by the Plan Administrator with respect to tax withholding shall be binding on the Participant and Beneficiaries. 
 IN WITNESS
WHEREOF, the Company has caused this January 1, 2005 restatement of the Plan to be signed by the Chair of the Compensation Committee this              day of August , 2006.

  

			
	ALASKA AIR GROUP, INC.
		
	By:	 	/s/ Phyllis Campbell
		 	Phyllis Campbell
		 	Chair, Compensation Committee

  

			
	January 1, 2005 Restatement	  	Page 37

 APPENDIX I: PARTICIPATING EMPLOYERS

 In addition to the Company (Alaska Air Group, Inc.), “Employer” as defined in Section 1.19 shall also include the following employers
during the following period of time. 
  

							
	  	  	 Employer
	  	Beginning Date	  	Ending Date
				
	 1.
	  	Alaska Airlines, Inc.	  	January 1, 1998	  	—  
				
	 2.
	  	Horizon Air Industries, Inc.	  	January 1, 1998	  	—  

  

			
	ACKNOWLEDGED AND ACCEPTED
	
	ALASKA AIR GROUP, INC.
		
	By:	 	 
		 	Phyllis J. Campbell
		 	Chair, Compensation Committee
		
	Date: 	 	 

  

			
	January 1, 2005 Restatement	  	Page 38

 APPENDIX II: DEFERRED RETENTION
INCENTIVE ACCOUNTS 
 A Deferred Retention Incentive under Section 9 has been granted to the each
of the following individuals, and a Deferred Retention Incentive Account has been established effective as of the respective date indicated below. 
  

			
	 Highly Compensated Employee
	  	Effective Date
	[None as of August 10, 2006]	  	

  

			
	ACKNOWLEDGED AND ACCEPTED
	
	ALASKA AIR GROUP, INC.
		
	By:	 	 
		 	Phyllis J. Campbell
		 	Chair, Compensation Committee
		
	Date: 	 	 

  

			
	January 1, 2005 Restatement	  	Page 39

 APPENDIX III: OSRP ACCOUNTS 
 For purposes of the Defined Contribution OSRP Plan described in Section 10, each of the following individuals has been approved as an “Eligible Elected
Officer”, and an OSRP Account has been established as of the respective “Eligibility Effective Date,” as stated below: 
  

			
	 Eligible Elected Officer
	  	Eligibility Effective Date
	Benjamin F. Forrest	  	March 9, 2006
	Chris R. Glaeser	  	July 5, 2006

  

			
	ACKNOWLEDGED AND ACCEPTED
	
	ALASKA AIR GROUP, INC.
		
	By:	 	 
		 	Phyllis J. Campbell
		 	Chair, Compensation Committee
		
	Date: 	 	 

  

			
	January 1, 2005 Restatement	  	Page 40

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