There seems to be some confusion regarding Alex’s contract. To put it simply:
He can void it after 2007.
He can void it after 2008 or 2009 unless the team increases his 2009-2010 salary by $5 million a year OR $1 million more than the highest-paid MLB position player.
So he has out clauses at the end of 2007, 2008 and 2009. The Yankees also cannot offer arbitration after 2010.
I checked this out with Brian Cashman a few weeks ago just to make sure.
Hope that clears up any questions.