Document:

Alaska Air Group, Inc. 2004 Long-Term Incentive Plan

 Exhibit 10.8.1 
 ALASKA AIR GROUP, INC. 
 2004 LONG-TERM INCENTIVE PLAN 
 NONQUALIFIED STOCK OPTION AGREEMENT 
 THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”) dated             , by and between ALASKA AIR GROUP, INC., a Delaware
corporation (“Air Group”), and              (the “Grantee”) evidences the nonqualified stock option (the “Option”) granted
by Air Group to the Grantee as to the number of shares of Air Group’s Common Stock first set forth below. 
  

						
	 Number of Shares of Common Stock1:

	  			  	Award Date:
	 Exercise Price per Share1:
	  	$	 	  	Expiration Date1,2:

 Vesting1,2 The Option shall become vested as to 25% of the total number of shares of Common Stock subject to the Option on each of the first, second, third and fourth
anniversaries of the Award Date. 
 The Option is granted under the Alaska Air Group, Inc. 2004 Long-Term Incentive Plan (the
“Plan”) and subject to the Terms and Conditions of Nonqualified Stock Option (the “Terms”) attached to this Option Agreement (incorporated herein by this reference) and to the Plan. The Option has been granted to
the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Grantee. Capitalized terms are defined in the Plan if not defined herein. The parties agree to the terms of the Option set forth
herein. The Grantee acknowledges receipt of a copy of the Terms, the Plan and the Prospectus for the Plan. 
  

									
	GRANTEE	 		 	 ALASKA AIR GROUP, INC.
 a Delaware
Corporation

				
	 	 		 	By:	 	 
		 		 		 	William S. Ayer
		 		 		 	Chairman, President and CEO
	 	 		 		 	
	Co-Mail Code	 		 		 	
	 	 		 		 	
	Home Address	 		 		 	
	 	 		 		 	
	City, State, Zip	 		 		 	

  

	 1
	 Subject to adjustment under Section 6 of the Plan

  

	 2
	 Subject to early termination under Section 4 of the Terms
and Section 13 of the Plan 

 TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION 
  

	1.	Vesting; Limits on Exercise; Incentive Stock Option Status; Possible Acceleration. 

 The Option shall vest and become exercisable in percentage installments of the aggregate number of shares subject to the Option as set forth on the cover
page of this Option Agreement. The Option may be exercised only to the extent the Option is vested and exercisable. 
  

	 	•	 	 Cumulative Exercisability. To the extent that the Option is vested and exercisable, the Grantee has the right to exercise the Option (to the extent not
previously exercised), and such right shall continue, until the expiration or earlier termination of the Option. 

  

	 	•	 	 No Fractional Shares. Fractional share interests shall be disregarded, but may be cumulated. 

  

	 	•	 	 Minimum Exercise. No fewer than 100 shares of Common Stock (subject to adjustment under Section 6 of the Plan) may be purchased at any one time, unless
the number purchased is the total number at the time exercisable under the Option. 

  

	 	•	 	 Nonqualified Stock Option. The Option is a nonqualified stock option and is not, and shall not be, an incentive stock option within the meaning of
Section 422 of the Code. 

 Notwithstanding any other provision herein or in the Plan, the Option, to the extent not
then vested, shall become fully vested if (i) the Grantee’s employment with the Company is terminated by the Company without Cause or by the Grantee for Good Reason, and (ii) such termination occurs at any time within the period
commencing six (6) months before a Change of Control and ending twenty-four (24) months after such Change of Control. (For these purposes, the terms “Cause,” “Change of Control” and “Good Reason” shall have
the meanings ascribed to them in Exhibit A attached hereto.) In the event that, upon the occurrence of a Change of Control, the Grantee is entitled to accelerated vesting of the Option pursuant to this paragraph in connection with a termination of
the Grantee’s employment prior to such Change of Control, the Option, to the extent it had not vested and was cancelled or otherwise terminated upon or prior to the date of such Change of Control solely as a result of such termination of
employment, shall be reinstated and shall automatically become fully vested, and the Grantee shall be given a reasonable opportunity to exercise such accelerated portion of the Option before it terminates. 
  

	2.	Continuance of Employment/Service Required; No Employment/Service Commitment. 

 The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or
mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 4 below or under the Plan. 
 Nothing contained in this Option Agreement or the Plan constitutes a continued employment or service commitment by the Company, affects the Grantee’s status, if he or she is an employee, as an employee at will
who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Company, interferes in any way with the right of the Company at any time to terminate such employment or service, or affects
the right of the Company to increase or decrease the Grantee’s other compensation. 

	3.	Method of Exercise of Option. 

 The Option
shall be exercisable by the delivery to the Secretary of Air Group (or such other person as the Committee may require pursuant to such administrative exercise procedures as the Committee may implement from time to time) of: 
  

	 	•	 	 a written notice stating the number of shares of Common Stock to be purchased pursuant to the Option or by the completion of such other administrative exercise
procedures as the Committee may require from time to time, 

  

	 	•	 	 payment in full for the Exercise Price of the shares to be purchased in cash, check or by electronic funds transfer to Air Group, or (subject to compliance with all
applicable laws, rules, regulations and listing requirements and further subject to such rules as the Committee may adopt as to any non-cash payment) in shares of Common Stock already owned by the Grantee, valued at their Fair Market Value on the
exercise date; 

  

	 	•	 	 if required by the Committee, any written statements or agreements that the Committee may deem necessary or desirable to assure compliance with all applicable legal
and accounting requirements; and 

  

	 	•	 	 satisfaction of the tax withholding provisions of Section 15 of the Plan. 

 The Committee also may, but is not required to, authorize a non-cash payment alternative by notice and third party payment in such manner as may be authorized by the Committee, or, subject to such procedures as the
Committee may adopt, authorize a “cashless exercise” with a third party who provides simultaneous financing for the purposes of (or who otherwise facilitates) the exercise of the Option. 
  

	4.	Early Termination of Option. 

 4.1 Possible Termination of Option upon Certain Corporate Events. The Option is subject to termination in connection with certain corporate events as provided in Section 13 of the Plan. 
 4.2 Termination of Option upon a Termination of Grantee’s Employment or Services. Subject to earlier termination on the Expiration
Date of the Option or pursuant to Section 4.1 above, if the Grantee ceases to be employed by or ceases to provide services to the Company, the following rules shall apply (the last day that the Grantee is employed by or provides services to the
Company is referred to as the Grantee’s “Severance Date”): 
  

	 	•	 	 other than as expressly provided below in this Section 4.2, the Option (whether vested or not) shall terminate on the Severance Date;

  

	 	•	 	 if the termination of the Grantee’s employment or services is the result of the Grantee’s Retirement (as defined below), (a) the Option, to the
extent not vested on the Severance Date and scheduled to vest at any time within the three-year period following the Severance Date, shall become fully vested as of the Severance Date, (b) the Grantee will have until the date that is three
(3) years after the Grantee’s Severance Date to exercise the Option, provided, however, that any portion of the Option that becomes vested pursuant to the foregoing clause (a) shall become exercisable only at such times as such
portion would have otherwise vested pursuant to the original vesting schedule as provided herein had the Grantee’s employment not terminated, (c) the Option, to the extent not vested on the Severance Date (after giving effect to the
foregoing clause (a)), shall terminate on the Severance Date, and (d) the Option, 

	 	 
to the extent exercisable at any time during the 3-year period following the Severance Date and not exercised on or prior to the last day of such period,
shall terminate at the close of business on the last day of the 3-year period; 

  

	 	•	 	 if the termination of the Grantee’s employment or services is the result of the Grantee’s death or Total Disability (as defined below), (a) the
Option, to the extent not vested on the Severance Date, shall become fully vested as of the Severance Date, (b) the Grantee (or his or her beneficiary or personal representative, as the case may be) will have until the date that is three
(3) years after the Grantee’s Severance Date to exercise the Option, and (c) the Option, to the extent exercisable for the three-year period following the Severance Date and not exercised during such period, shall terminate at the
close of business on the last day of the three-year period. 

 For purposes of the Option, “Retirement”
means that, as of the Grantee’s Severance Date, the Grantee has either (i) attained age 55 with at least five (5) full years of service with the Company, or (ii) has attained age 60, or (iii) is a participant in and is
entitled to commence a benefit under a Company-sponsored defined benefit plan and has at least 10 years of service with the Company. For purposes of the Option, “Total Disability” means a “permanent and total disability”
(within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Committee). 
 In all events the Option is subject
to earlier termination on the Expiration Date of the Option or as contemplated by Section 4.1. The Committee shall be the sole judge of whether the Grantee continues to render employment or services for purposes of this Option Agreement.

  

	5.	Non-Transferability. 

 The Option and any
other rights of the Grantee under this Option Agreement or the Plan are nontransferable and exercisable only by the Grantee, except as set forth in Section 11 of the Plan. 
  

	6.	Notices. 

 Any notice to be given under the
terms of this Option Agreement shall be in writing and addressed to Air Group at its principal office to the attention of the Secretary, and to the Grantee at the address last reflected on the Company’s payroll records, or at such other address
as either party may hereafter designate in writing to the other. Any such notice shall be delivered in person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if the Grantee is no longer employed by the Company, shall be deemed to
have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 6. 
  

	7.	Plan. 

 The Option and all rights of the
Grantee under this Option Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference. The Grantee agrees to be bound by the terms of the Plan and this Option Agreement. The Grantee acknowledges having read
and understanding the Plan, the Prospectus for the Plan, and this Option Agreement. Unless otherwise expressly provided in other sections of this Option Agreement, provisions of the Plan that confer discretionary authority on the Board or the
Committee do not and shall not be deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Committee so conferred by appropriate action of the Board or
the Committee under the Plan after the date hereof. 

	8.	Entire Agreement. 

 This Option Agreement and
the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Option Agreement may be amended pursuant to
Section 14 of the Plan. Such amendment must be in writing and signed by Air Group. Air Group may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee
hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 
  

	9.	Governing Law. 

 This Option Agreement shall
be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder. 
  

	10.	Effect of this Agreement. 

 Subject to Air
Group’s right to terminate the Option pursuant to Section 13 of the Plan, this Option Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to Air Group. 
  

	11.	Counterparts. 

 This Option Agreement may be
executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
  

	12.	Section Headings. 

 The section headings of
this Option Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof. 

 EXHIBIT A 
 DEFINITIONS 
 For purposes of the Option, the following terms shall have the meanings set forth is
this Exhibit A. 
 “Cause” means the occurrence of any of the following: 
  

	 	(i)	the Grantee is convicted of, or has pled guilty or nolo contendere to, a felony (other than traffic related offenses or as a result of vicarious liability); or

  

	 	(ii)	the Grantee has engaged in acts of fraud, material dishonesty or other acts of willful misconduct in the course of his or her duties to the Company; or 

  

	 	(iii)	the Grantee willfully and repeatedly fails to perform or uphold his or her duties to the Company; or 

  

	 	(iv)	the Grantee willfully fails to comply with reasonable directives of the Board which are communicated to him or her in writing; 

 provided, however, that no act or omission by the Grantee shall be deemed to be “willful” if the Grantee reasonably believed in good faith that
such acts or omissions were in the best interests of the Company. 
 “Change of Control” means the occurrence of any of the following:

  

	 	(i)	the consummation of: 

 (A) 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 
 (B) 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. 
  

	 	(ii)	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
(A) individuals who constitute the Board at the beginning of such period; and (B) individuals who were nominated or elected by all of, or a committee composed entirely of, the individuals described in (A); and (C) individuals who were
nominated or elected by individuals described in (B). 

  

	 	(iii)	 any Person (meaning any individual, entity or group within the meaning of Section 13(d)(3) or 14(d) of 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 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.

  

	 	(iv)	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. 
 Notwithstanding the foregoing, in no event shall a transaction or other event that
occurred prior to the date of grant of the Option constitute a Change of Control, and no Change of Control after the first Change of Control to occur after the grant date shall be considered for purposes of the Option. 
 “Good Reason” means, without the Grantee’s express written consent, the occurrence of any one or more of the following: 
  

	 	(i)	a material reduction in the Grantee’s annual base salary; 

  

	 	(ii)	a material diminution or reduction of the Grantee’s authority, duties, or responsibilities; 

  

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

  

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

 provided, however, that any such condition shall not constitute “Good Reason” unless both (x) the Grantee provides written notice to the Company of the condition claimed to constitute Good Reason within ninety (90) days
of the initial existence of such condition, and (y) the Company fails to remedy such condition within thirty (30) days of receiving such written notice thereof; and provided, further, that in all events the termination of the
Grantee’s employment with the Company shall not be treated as a termination for “Good Reason” unless such termination occurs not more than two (2) years following the initial existence of the condition claimed to constitute
“Good Reason.”Alaska Air Group, Inc. 2004 Long-Term Incentive Plan

 Exhibit 10.8.2 
 ALASKA AIR GROUP, INC. 
 2004 LONG-TERM INCENTIVE PLAN 
 STOCK UNIT AWARD AGREEMENT 
 THIS
STOCK UNIT AWARD AGREEMENT (this “Agreement”) dated             , by and between ALASKA AIR GROUP, INC., a Delaware corporation (“Air
Group”), and              (the “Participant”) evidences the award of restricted stock units (the “Award”) granted by Air Group to
the Participant as to the number of stock units (the “Stock Units”) first set forth below. 
  

			
	 Number of Stock Units1:
	  	Award Date:

 Vesting1 The Award shall vest and become nonforfeitable with respect to 100% of the total number of Stock Units subject to the Award on the third anniversary of the
Award Date. 
 The Award is granted under the Alaska Air Group, Inc. 2004 Long-Term Incentive Plan (the “Plan”) and subject
to the Terms and Conditions of Stock Unit Award (the “Terms”) attached to this Agreement (incorporated herein by this reference) and to the Plan. The Award has been granted to the Participant in addition to, and not in lieu of, any
other form of compensation otherwise payable or to be paid to the Participant. Capitalized terms are defined in the Plan if not defined herein. The parties agree to the terms of the Award set forth herein. The Participant acknowledges receipt of a
copy of the Terms, the Plan and the Prospectus for the Plan. 
 The Participant hereby confirms that the Award is granted in consideration
for (among other things) the Participant’s entering into that certain Amended and Restated Change of Control Agreement, effective as of [            ], by and between the
Participant and Air Group. 
  

									
	GRANTEE	 		 	 ALASKA AIR GROUP, INC.
 a Delaware
Corporation

				
	 	 		 	By:	 	 
		 		 		 	William S. Ayer
		 		 		 	Chairman, President and CEO
	 	 		 		 	
	Co-Mail Code	 		 		 	
	 	 		 		 	
	Home Address	 		 		 	
	 	 		 		 	
	City, State, Zip	 		 		 	

  

	 1
	 Subject to adjustment under Section 6 of the Plan. 

  

 1 

 TERMS AND CONDITIONS OF STOCK UNIT AWARD 
 1. Stock Units. As used herein, the term “stock unit” shall mean a non-voting unit of measurement which is deemed for
bookkeeping purposes to be equivalent to one outstanding share of Air Group’s Common Stock (subject to adjustment as provided in Section 6 of the Plan) solely for purposes of the Plan and this Agreement. The Stock Units shall be used
solely as a device for the determination of the payment to eventually be made to the Participant if such Stock Units vest pursuant to this Agreement. The Stock Units shall not be treated as property or as a trust fund of any kind. 
 2. Vesting; Possible Acceleration. Subject to Section 7 below, the Award shall vest and become nonforfeitable as set forth on
the cover page of this Agreement. Notwithstanding any other provision herein or in the Plan, the Award, to the extent not then vested, shall become fully vested if (i) the Participant’s employment with the Company is terminated by the
Company without Cause or by the Participant for Good Reason, and (ii) such termination occurs at any time within the period commencing six (6) months before a Change of Control and ending twenty-four (24) months after such Change of
Control. (For these purposes, the terms “Cause,” “Change of Control” and “Good Reason” shall have the meanings ascribed to them in Exhibit A attached hereto.) In the event that, upon the occurrence of a Change of
Control, the Participant is entitled to accelerated vesting of the Award pursuant to this Section 2 in connection with a termination of the Participant’s employment prior to such Change of Control, the Award, to the extent it had not
vested and was cancelled or otherwise terminated upon or prior to the date of such Change of Control solely as a result of such termination of employment, shall be reinstated and shall automatically become fully vested. 
 3. Continuance of Employment. The vesting schedule requires continued employment or service through each applicable vesting date as
a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Participant
to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 7 below or under the Plan. 
 Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by Air Group, affects the Participant’s status as an
employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or in service to the Company, interferes in any way with the right of the Company at any time to terminate such employment or
services, or affects the right of the Company to increase or decrease the Participant’s other compensation or benefits. Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Participant
without his or her consent thereto. 
 4. Limitations on Rights Associated with Units. The Participant shall have no
rights as a stockholder of Air Group, no dividend rights and no voting rights, with respect to the Stock Units and any shares of Common Stock underlying or issuable in respect of such Stock Units until such shares of Common Stock are actually issued
to and held of record by the Participant. No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate. 
 5. Restrictions on Transfer. Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be sold,
assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply to (a) transfers to Air Group, or (b) transfers by
will or the laws of descent and distribution. 
  

 2 

 6. Timing and Manner of Payment of Stock Units. On or as soon as administratively
practical following each vesting of the applicable portion of the total Award pursuant to the terms hereof (and in all events within two and one-half months after such vesting event), Air Group shall deliver to the Participant a number of shares of
Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by Air Group in its discretion) equal to the number of Stock Units subject to this Award that vest on the
applicable vesting date, unless such Stock Units terminate prior to the given vesting date pursuant to Section 7. Air Group’s obligation to deliver shares of Common Stock or otherwise make payment with respect to vested Stock Units is
subject to the condition precedent that the Participant or other person entitled under the Plan to receive any shares with respect to the vested Stock Units deliver to Air Group any representations or other documents or assurances that the Committee
may deem necessary or desirable to assure compliance with all applicable legal and accounting requirements. The Participant shall have no further rights with respect to any Stock Units that are paid or that terminate pursuant to Section 7.

 7. Effect of Termination of Employment. The Participant’s Stock Units shall terminate to the extent such units
have not become vested prior to the first date the Participant is no longer employed by the Company, regardless of the reason for the termination of the Participant’s employment with the Company; provided, however, that (i) if the
Participant’s employment terminates as a result of the Participant’s death or Total Disability (as defined below), the Participant’s Stock Units, to the extent such units are not then vested, shall become fully vested as of the date
of termination of the Participant’s employment and shall be paid in accordance with Section 6; and (ii) if the Participant’s employment terminates as a result of the Participant’s Retirement (as defined below), the
Participant’s Stock Units, to the extent such units are not then vested and were scheduled to vest within the three-year period following the date of such termination, shall become fully vested as of the date of such termination and shall be
paid in accordance with Section 6 on or as soon as practicable after the date such Stock Units would have otherwise vested pursuant to the original vesting schedule as provided herein had the Participant’s employment not terminated. If any
unvested Stock Units are terminated hereunder, such Stock Units shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by Air Group and without any other action by the Participant,
or the Participant’s beneficiary or personal representative, as the case may be. 
 For purposes of this Agreement,
“Total Disability” means a “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Committee). For purposes of this Agreement,
“Retirement” means that, as of the date of the termination of the Participant’s employment with the Company, the Participant has either (i) attained age 55 with at least five (5) full years of service with the
Company, or (ii) has attained age 60, or (iii) is a participant in and is entitled to commence a benefit under a Company-sponsored defined benefit plan and has at least 10 years of service with the Company. 
 8. Adjustments Upon Specified Events. The Committee may accelerate payment and vesting of the Stock Units in such circumstances as
it, in its sole discretion, may determine. In addition, upon the occurrence of certain events relating to Air Group’s stock contemplated by Section 6 of the Plan (including, without limitation, an extraordinary cash dividend on such
stock), the Committee shall make adjustments in accordance with such section in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Award. No such adjustment shall be made with
respect to any ordinary cash dividend paid on the Common Stock. 
 9. Tax Withholding. Subject to Section 19 of the
Plan, upon any distribution of shares of Common Stock in respect of the Stock Units, Air Group shall automatically reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then
Fair Market Value (determined in accordance with the applicable provisions of the Plan), to satisfy any 

  

 3 

 
withholding obligations of the Company with respect to such distribution of shares at the minimum applicable withholding rates. In the event that Air Group
cannot legally satisfy such withholding obligations by such reduction of shares, or in the event of a cash payment or any other withholding event in respect of the Stock Units, the Company shall be entitled to require a cash payment by or on behalf
of the Participant and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to such distribution or payment. 
 10. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to Air Group at its
principal office to the attention of the Secretary, and to the Participant at the Participant’s last address reflected on Air Group’s records, or at such other address as either party may hereafter designate in writing to the other. Any
such notice shall be given only when received, but if the Participant is no longer an employee of the Company, shall be deemed to have been duly given by Air Group when enclosed in a properly sealed envelope addressed as aforesaid, registered or
certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 
 11. Plan. The Award and all rights of the Participant under this Agreement are subject to the terms and conditions of the provisions of the Plan, incorporated herein by reference. The Participant
agrees to be bound by the terms of the Plan and this Agreement. The Participant acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Agreement. Unless otherwise expressly provided in other sections of this
Agreement, provisions of the Plan that confer discretionary authority on the Board or the Committee do not (and shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the
sole discretion of the Board or the Committee so conferred by appropriate action of the Board or the Committee under the Plan after the date hereof. 
 12. Entire Agreement. This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with
respect to the subject matter hereof. The Plan and this Agreement may be amended pursuant to Section 14 of the Plan. Such amendment must be in writing and signed by Air Group. Air Group may, however, unilaterally waive any provision hereof in
writing to the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

 13. Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as
herein provided. This Agreement creates only a contractual obligation on the part of Air Group as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. The
Participant shall have only the rights of a general unsecured creditor of Air Group with respect to amounts credited and benefits payable, if any, with respect to the Stock Units, and rights no greater than the right to receive the Common Stock as a
general unsecured creditor with respect to Stock Units, as and when payable hereunder. 
 14. Counterparts. This
Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
 15. Section Headings. The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter
or affect any provision hereof. 
 16. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder. 
  

 4 

 17. Construction. It is intended that the terms of the Award will not result in the
imposition of any tax liability pursuant to Section 409A of the Code. This Agreement shall be construed and interpreted consistent with that intent. 
  

 5 

 EXHIBIT A 
 DEFINITIONS 
 For purposes of the Award, the following terms shall have the meanings set forth is
this Exhibit A. 
 “Cause” means the occurrence of any of the following: 
  

	 	(i)	the Participant is convicted of, or has pled guilty or nolo contendere to, a felony (other than traffic related offenses or as a result of vicarious liability); or

  

	 	(ii)	the Participant has engaged in acts of fraud, material dishonesty or other acts of willful misconduct in the course of his or her duties to the Company; or 

 

	 	(iii)	the Participant willfully and repeatedly fails to perform or uphold his or her duties to the Company; or 

  

	 	(iv)	the Participant willfully fails to comply with reasonable directives of the Board which are communicated to him or her in writing; 

 provided, however, that no act or omission by the Participant shall be deemed to be “willful” if the Participant reasonably believed in good
faith that such acts or omissions were in the best interests of the Company. 
 “Change of Control” means the occurrence of any of the
following: 
  

	 	(i)	the consummation of: 

 (A) 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 
 (B) 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. 
  

	 	(ii)	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
(A) individuals who constitute the Board at the beginning of such period; and (B) individuals who were nominated or elected by all of, or a committee composed entirely of, the individuals described in (A); and (C) individuals who were
nominated or elected by individuals described in (B). 

  

	 	(iii)	 any Person (meaning any individual, entity or group within the meaning of Section 13(d)(3) or 14(d) of 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 Air Group
ordinarily (and apart from 

  

 6 

	 	 
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.

  

	 	(iv)	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. 
 Notwithstanding the foregoing, in no event shall a transaction or other event that
occurred prior to the date of grant of the Award constitute a Change of Control, and no Change of Control after the first Change of Control to occur after the grant date shall be considered for purposes of the Award. 
 “Good Reason” means, without the Participant’s express written consent, the occurrence of any one or more of the following: 
  

	 	(i)	a material reduction in the Participant’s annual base salary; 

  

	 	(ii)	a material diminution or reduction of the Participant’s authority, duties, or responsibilities; 

  

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

  

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

 provided, however, that any such condition shall not constitute “Good Reason” unless both (x) the Participant provides written notice to the Company of the condition claimed to constitute Good Reason within ninety
(90) days of the initial existence of such condition, and (y) the Company fails to remedy such condition within thirty (30) days of receiving such written notice thereof; and provided, further, that in all events the termination of
the Participant’s employment with the Company shall not be treated as a termination for “Good Reason” unless such termination occurs not more than two (2) years following the initial existence of the condition claimed to
constitute “Good Reason.” 
  

 7

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