Subject: Vanguard Notice of Challenger Proxy (Minor Revision)
Date: June 2, 2005 9:44:25 AM PDT
Cc: email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, schadwick@Equiserve.com
Dear Mr. Nieman:
I am responding to your e-mail of May 22, 2005 concerning receipt of Vanguard's Notice to Participants of the Alaska Air Group,Inc. Plans (the "notice") to participants of the Alaska Air Group, Inc. Alaskasaver Plan, Alaska Airlines, Inc. COPS, MRP and Dispatch 401(k) Plan and Horizon Air Industries, Inc. Savings Investment Plan (the "plan participants"). We have researched this matter and have confirmed the following information:
We confirmed with Vanguard that their printer delivered a total of 7,200 notices for the above plan participants. The mailing manifest delivered to the U.S. Postal Service (USPS) indicated that we mailed 6,894 plan participant proxy packages. Based on these two figures, an excess quantity of 306 notices should have been in our possession after the mailing. A count of the leftover notices revealed that we had slightly more than 306 notices after the mailing. As a result of this and your notification that you and other plan participants did not receive the notice, it is apparent that there were some instances in which the notice was not enclosed with the proxy package to plan participants.
While we cannot determine exactly how many plan participants failed to receive the notice, we estimate based on the above information that only approximately 1% of the entire plan participant population was effected. We further verified against the mailing manifest delivered to the USPS that the weight of the proxy packages mailed to the plan participants was greater than the weight of the proxy package mailed to the registered shareholders. The difference in the weight of the package is the result of the notice enclosed in the plan participant mailing. While the number of plan participants effected is not insignificant, as indicated above, we are confident that this problem was limited to a small percentage of the plan participant population. Despite our best efforts to process mailings flawlessly, things do not always go perfectly and undetected errors sometimes occur. We are confident had this enclosing problem been more widespread, it would have been recognized and rectified.
With respect to plan participants receiving materials electronically, you are correct that originally these plan participants were not provided with a link to access the notice within the email that was sent to them containing the links to view Alaska Air Group's (AAG's) proxy materials. On May 6, 2005, after discussions with both AAG and Vanguard, EquiServe sent an electronic copy of the notice as an attachment to an email directly to each of the 116 plan participants who had consented to receive their voting materials electronically.
In closing I want to assure you that EquiServe takes its role as agent for
Alaska Air Group and its responsibilities with respect to proxy mailings and
the disclosure of all plan participant information very seriously. While
we were under no fiduciary obligation to forward the Vanguard notice to plan
participants, we agreed to do so in an effort to facilitate the dissemination
of this information on behalf of Vanguard and Alaska Air Group. We agree
that it is an important matter. We have noted both of these incidents
and will make every effort to ensure a flawless process in the future.
If you have any additional questions on this matter, please contact me.
Stephen M. Plefka
Stephen M. Plefka
Senior Account Manager
EquiServe Trust Company, N.A.
250 Royall Street
Canton, MA 02021
Tel: (781) 575-2388
Fax: (781) 575-2152