From the CHALLENGERS May 1, 2005
Letter to Stockholders of Alaska Air Group, Inc.
Who Really Owns Your Company?
Dear AAG Shareholders:
Who Owns? is the fundamental 64 million dollar question that shareholders have
been waiting a long time to finally determine. Courtesy the rights of your stock
ownership in this company, you now have an opportunity to vote on this critical
question. To the best of our knowledge, you are the first shareholders to test
what we feel is obvious: Stockholders own the company--not management. If you
vote in sufficient numbers, we believe the shareholder proposals that appear on
the ballot this year are binding on the AAG's Board of Directors, who must then
enact them according to Delaware law within a reasonable period of time.
The board disagrees with us. But you must consider who we're dealing with. We
are opposed by an incumbent board who over the last five years has ignored 13
majority shareholder votes, and who bluntly says in this year's proxy statement
that it will ignore all majority votes on these 2005 proposals, too. We urge you
to carefully read the CHALLENGER and AAG's proxy statements. How can such a
fundamental conflict over how power is wielded at our companies finally be
resolved? We can think of a four point progression:
First, the question has to be raised in the proper venue, a perfect one being
the company's proxy statement, which passed SEC muster. The fact that these
binding proposals appear in the company's proxy statement proves that the SEC
did NOT agree with the company's arguments to exclude them. This doesn't mean
that the SEC has endorsed these proposals. It means the SEC judged that
shareholders could NOT be denied the right to vote on these matters.
Second, you, the shareholders, must vote in favor in sufficient numbers so as to
carry the minimum majority-vote requirements required by the AAG's bylaws.
Third, the board will then have an important choice to make--to honor your
directions, or once again disregard them.
Fourth, the issue may have to go to court.
Please understand that we are not advocating the fourth condition. We sincerely
hope this will not be necessary, and the board will carry out its solemn duty to
abide by majority votes of its shareholders. However, we will support any
shareholder who steps forward to ensure justice.
We have assisted the worker-shareholder proposalists, and otherwise labored to
offer an exciting alternative to shareholders voting or withholding only
incumbent nominees on the company's proxy card or voting instruction form. We
have fielded six CHALLENGERS, and you now have a candidate list of ten nominees
to select from--four who will win election this year to the AAG board.
If you read our proxy statement carefully, you will find instructions that
permit you to vote for the CHALLENGERS using the company's proxy card. For a
long time it has been asserted that shareholders have the right to "write in"
SEC-qualified candidates on the company's proxy card. Finally, this day has
arrived. To the best of our knowledge, this is the first time the SEC has ever
permitted the writing-in of opposition candidates on a corporate proxy card.
You may also vote the Challengers' electronic or paper Proxy Card and Voting
Instruction Form found at https://votepal.com/a14defin0500429nemo.html
We believe that all knowledgeable shareholders realize that the issues in this
proxy contest may be historic. It has taken decades for a proxy contest this
significant to materialize in terms of deciding critical governance issues
balancing power, which will ultimately determine how corporations will be
governed in this new millennium.
If AAG shareholders fail to take advantage, we feel a vital opportunity will
simply pass under the wing. You will have bought the board's argument: That
stockholders have no home, are prohibited from democratically
check-and-balancing corporate power, and have waived all rights as
owner/participants to oversee the investment of their capital.
Respectfully,
The CHALLENGERS--Richard Foley, Steve Nieman, Dr. Bob Osborne, Terry Dayton,
John Chevedden and Carl Olson