Today, Putnam authorized the fax number (800) 250-8416 (attn: Mr. Rob Falbey) to allow Alaska/Horizon Air 401(k) plan participants to send instructions to the Trustee. As we post this, the mailing deadline has past because there are only two days left. As per the Putnam 5-9-03 letter below, print out our electronic proxy card, fill it out, write across the top 401(k) shares and fax it to Putnam. It's a long story about how we got to this (edited 5-16-03: strike the word "unfortunate" which may not comply with SEC Rule 14a-9) delete|unfortunate|delete point. We will have lots of time to tell stories after this ordeal is over. But remember: don't discount the power of democracy. (edited 5-16-03: strike the sentence that follows, which may not comply with SEC Rule 14a-9) delete sentence|If you don't vote, injustices that exist in our workplaces will never be addressed|delete sentence; insert: It's important that you vote.) Stranger things have happened. Outcomes have been decided by fewer than a handful of votes...
The following is copied and pasted from the Horizon Air Savings Investment Plan Trust Agreement (the 401(k) plan) between Horizon Air and Putnam, who is the named Trustee. This Trust Agreement dated 7-1-99 states in section 7. Trust Investments in Company Stock (e) Voting par. 2: "Each Plan member shall have the right to direct the Trustee as to the manner in which to vote that number of shares of Company Stock credited to his accounts. Such directions shall be communicated in writing or by facsimile or similar means and shall be held in confidence by the Trustee and not divulged to the Company, or any officer or employee thereof, or any other person. Upon its receipt of directions, the Trustee shall vote the shares of the Company Stock credited to the Plan member's account as directed by the Plan member."
From: Keith_Gokey@putnam.com
Date: Fri May 9, 2003 2:22:30 PM US/Pacific
To: rerailer@earthlink.net Cc: kathryn.brown@alaskaair.com, Kristen_L_Dee@putnam.com,
SteveNieman@mac.com, Robert_Falvey@putnam.com, keith.loveless@alaskaair.com,
Jennifer_Proffit@putnam.com Subject:
May 9, 2003
Mr. Richard Foley (via email to rerailer@earthlink.net)
6040 N. Camino Arturo
Tucson, AZ 85718
Re: Alaska Air Group, Inc.
Dear Mr. Foley:
I am writing as a follow up to a recent conversation regarding proxy voting
for shares held in the the Alaska Air Group, Inc. Alaskasaver Plan, the Alaska
Airlines, Inc., COPS, MRP & Dispatch 401(k) Plan, and the Horizon Air Savings
Investment Plan (together, the "Plans").
As an initial matter, please note that Putnam Fiduciary Trust Company ("PFTC"),
a subsidiary of Putnam, LLC (d/b/a "Putnam Investments"), serves as
directed trustee and provides limited recordkeeping services with respect to
the Plans. Participants have accounts with the Plans, which offer certain Putnam
mutual funds and Alaska Air Group company stock as investment options for Plan
contributions. However, participants are not the registered owner of these securities.
As you are aware, PFTC has been working with EquiServe Trust Company ("EquiServe")
to develop a procedure for voting by the participants of the Plans for the challenger
nominees. The procedure is described in the following notice, which we suggest
you post on the website with the challenger's proxy card:
"IMPORTANT NOTICE TO 401(k) PLAN PARTICIPANTS:
If you are a participant in the Alaska Air Group, Inc. Alaskasaver Plan, the
Alaska Airlines, Inc., COPS, MRP & Dispatch 401(k) Plan, the Alaska Airlines,
Inc., Flight Attendant 401(k) Plan, or the Horizon Air Savings Investment Plan
(together, the "Plans") , you have the right to direct Putnam Fiduciary
Trust Company as trustee of the Plans to vote any shares of Alaska Air Group,
Inc. stock credited to your account under the Plans. You may provide instructions
by completing the proxy card found on this website and mailing it to:
Alaska Air Group, Inc.
c/o EquiServe Trust Company, N.A., Proxy Services
P.O. Box 8948
Edison, NJ 08818-8948
Please include the voting control number from the proxy card you received from
EquiServ for your Plan shares and write at the top of the proxy card "401(k)
Shares".
This address should be used only to provide voting instructions for shares held
in your Plan account. It should not be used for proxies on shares you own directly.
All voting instructions must be received by the close of business on May 15,
2003".
EquiServe will forward any challenger proxy cards it receives by May 15, 2003
to PFTC for tabulation. Once these cards have been tabulated and validated,
PFTC will then vote the shares as directed by the participants.
If you have any additional questions or concerns regarding this matter, please
call me 1-800-685-6474, extension 12330.
Sincerely,
Keith A. Gokey
Senior Compliance Specialist Compliance & Consulting
Putnam Investments
Investors Way Norwood, MA 02062
From: Steve Nieman <stevenieman@mac.com>
Date: Fri May 9, 2003 6:56:47 AM US/Pacific
To: "Kathryn Brown" <kathryn.brown@alaskaair.com>
Cc: rerailer@earthlink.net, shannon.alberts@alaskaair.com, keith.loveless@alaskaair.com
Subject: Re: Your Email of May 8, 2003
Friday, May 9, 2003
Ms. Kathryn Brown (via email to kathryn.brown@alaskaair.com)
Senior Attorney
AAG, Inc.
PO Box 68947
Seattle, WA 98168
Hi Kathy,
We will post this email exchange today on votepal.com. I'm happy that you guys
and Putnam are finally seeing the light about allowing employees to vote their
stock according to the Trust Agreement. After-all, our proxy card has been approved
by the SEC. [edited on 5-10-03: I should have clarified
this last sentence to say that the SEC does not approve or disapprove proxies]
(As a side-note, I deduce that there's no chance of electronic voting of our
proxy card this year, and all ballots will be on paper.)
However, I don't believe us challengers posting these voting instructions to
15,000 AAG employees on just our little ol' web site fulfills the company's
fiduciary responsibility of properly and timely informing the employees of this
huge change in voting instructions since you filed your definitive on April
14th, 2003.
We've got, what? less than a week left before the Putnam/EquiServe deadline
of Midnight May 15th for AAG 401(k) plan employees to instruct the trustee how
to vote their shares?
I suggest that you immediately today post on alaskasworld.com and onyourhorizon.com
these new voting instruction from the Company and Putnam. This, in my opinion,
would be proper right-actions for fiduciaries of the Plans. In this confusing
labyrinth of rules governing proxy contests, it would prove that the fiduciaries
went the extra mile to properly instruct employees about their rights and responsibilities
as employee/shareholders on how to vote their stock this year.
Sincerely,
Steve Nieman
AAG employee/Horizon Air
On Thursday, May 8, 2003, at 02:58 PM, Kathryn Brown wrote:
May 8, 2003
Mr. Richard D. Foley (via email to rerailer@earthlink.net)
6040 N. Camino Arturo
Tucson, AZ 85718
Dear Mr. Foley:
We received your email to Keith Loveless dated May 5, 2003, and Keith has asked
me to reply. Our response to the three questions you posed is as follows:
(1) The Company does not have the authority to instruct Putnam, as the Trustee
under the 401(k) plans, as to what constitutes a valid voting instruction. That
matter is determined by the Trustee in accordance with the provisions of the
Trust Agreement, the relevant provisions of which were included in Keith's email
to you on May 2, 2003.
However, we have been working to address your concerns with respect to voting
by the plan participants. Putnam is prepared to receive voting instructions
in appropriate form from those who wish to have their shares voted for your
slate of candidates. It is willing to allow you to post on your web site a notice
that any plan participant who wishes to deliver such instructions to Putnam
may send it to the mail box specified in the Company's proxy materials. (That
is an EquiServe mail box dedicated to Alaska Air Group and paid for by the Company,
which is not the usual practice.) EquiServe is willing to receive those voting
instruction forms in that mail box only and deliver those received by the deadline
to Putnam. The address is as follows:
Alaska Air Group, Inc.
c/o EquiServe Trust Company, N.A., Proxy Services
P.O. Box 8948 Edison, NJ 08818-8948
Putnam is working out the operational details for handling this and I expect
you will hear from them shortly.
(2) EquiServe has been retained by the Company to tabulate proxies solicited
by the Company's Board of Directors, but at this meeting will not serve as Inspector
of Election. As we advised you previously, the Company has hired an independent
and experienced Inspector, Carl T. Hagberg. He, and not EquiServe, will determine
the validity of proxies received. Any proxies you wish to have counted should
be presented to the Inspector of Election at or prior to the Annual Meeting;
he will determine their validity in accordance with applicable law and the presumptions
he sent both sides today. I gave you the Inspector's name, web site and phone
number on April 23rd and understand that you have spoken with him.
(3) As stated above, the Inspector of Election will determine whether proxies
are valid under applicable law. Neither the Company nor the challengers has
the authority to instruct him on that issue.
We would like to discuss with you and Steve Nieman arrangements for the conduct
of the Annual Meeting. Please let me know whether you are interested in that
discussion and, if so, when you are available for a conference call.
Very truly yours,
Kathy Brown
FROM: Richard D. Foley
Chairman of The Alaska Challengers
6040 N. Camino Arturo
Tucson, AZ 85718
520-742-5168
<rerailer@earthlink.net>
FAX: 520-742-6963
TO: Keith Loveless
Vice President, Legal and Corporate Affairs,
General Counsel and Corporate Secretary
Alaska Air Group, Inc.
Box 68900 -SEAZZ
Seattle, WA 98168-0900
DATE: MAY 5, 2003
VIA: EMAIL
RE: YOUR EMAIL LETTER OF TODAY
Thank you for your letter. We will not pay any agent, person, or party to print
or distribute our proxy materials. We do not request Alaska Air Group, Inc.,
("the company") to do any thing of the sort on our behalf.
It is our position, stated publicly and repeatedly, that Internet distribution
is the least costly and the most efficient means of communicating with 99.9%
of the shareholders.
It is our position, stated publicly and repeatedly, that this is a "contested
election" under all rules, regulations, policies, statutes, and court decisions.
(edited on 5-11-03: Please note that the NYSE disagrees
with the challengers' position that this election is contested, and thus brokers
may exercise their discretionary authority with respect to shares for which
no instructions have been provided.)
We have submitted a proxy statement and proxy card to the SEC and have received
acceptance as being qualified for presentation to and use by the shareholders
for the purpose of voting their shares in the company. These materials are available
on the Internet located at www.votepal.com. Additional material will be properly
filed with the SEC and will appear on this web site. Those materials will include
as complete a record of all communication between the company, the SEC, the
shareholder proponents, and the nominating shareholder of the challenging candidates
for election to the company's board of directors, as we are able to present.
We have four questions for Alaska Air Group, Inc.:
(1) Will the company instruct Putnam and or the proper party at the "trustee"
to accept our SEC approved proxy card submitted by a plan participant as an
official and binding voting instruction for the participant’s shares?
(2) Will the company instruct its transfer agent EquiServe to accept our SEC
approved proxy card as an official and binding voting instruction from the shareholder
presenting it?
(3) Will the company instruct its Inspector of Elections to accept our SEC approved
proxy card as an official and binding voting instruction from the shareholder
presenting it?
Should the company determine that its highest duty to its shareholders is to
insure a fair election, the company has our permission to distribute our materials
in any manner of its choosing. If this means that the date of the annual meeting
has to be postponed we would not object.
Respectfully,
Richard D. Foley
Copy to:
Steve Nieman
Robert C. Osborne, M.D.
Nicholas Panos @ SEC
Dennis P. Barron
eRaider.com
ISS
CII
IRRC