Exhibit 10.17

MAIR Holdings, Inc.
Executive Retention Bonus Agreement

This Agreement is entered into this 11th day of July, 2007, by and between MAIR
Holdings, Inc. (the “Company”) and Ruth M. Timm (the “Executive”) for the
purpose of providing an incentive to Executive to continue her employment and
her valued services to the Company.

WHEREAS, the Company’s former subsidiary, Mesaba Aviation, Inc., dba Mesaba
Airlines, recently received confirmation of a Chapter 11 plan for reorganization
which established a liquidating trust for purposes of distributions thereunder,
and

WHEREAS, the Company anticipates that it will receive on a periodic basis
disbursements from this Mesaba liquidating trust based on its equity interest in
Mesaba after the payment of all Mesaba creditor claims (the “ Equity
Disbursement” or “Equity Disbursements”), and

WHEREAS, the Company wants to encourage Executive to continue in employment
until all of the Equity Disbursements are received, and to take all actions
possible to facilitate and to maximize the Equity Disbursements, and

NOW, THEREFORE, the Company and Executive make the following agreement:

1.                                       The Company shall pay a bonus (the
“Retention Bonus”) to Executive if Executive remains in active employment with
the Company through the date the Company receives Equity Disbursements from the
Mesaba liquidating trust which exceed the threshold amount described below,
qualifying her for a payment.

2.                                       Alternatively, Executive shall qualify
for a Retention Bonus even if no longer employed by the Company in the event
that Executive’s employment is involuntarily terminated without Cause after the
Company experiences a “Change-in-Control” as defined in the Company’s Severance
Compensation Plan.

3.                                       Executive’s Retention Bonus shall be
paid in cash in one or more payments within forty-five days of any Equity
Disbursement to the Company from the Mesaba liquidating trust which exceeds the
threshold payment amount as determined by the Compensation Committee and
triggers a Retention Bonus as provided in Section 5.

4.                                       The Company shall withhold federal and
state income, FICA and Medicare taxes from each Retention Bonus payment as
required by law.

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5.                                       The amount allocated Executive shall be
determined by applying certain percentages to the aggregate amount of the Equity
Disbursements, under the following formula:

a.                                       No Retention Bonus will be paid until
the aggregate Equity Disbursements by the Mesaba liquidating trust reach the
threshold amount of $10,000,000.

b.                                      Once that threshold is achieved, the
Company will pay Executive five-sixth of a percent of the first $10,000,000 of
the Equity Disbursement, or $83,333.

c.                                       The Company will pay Executive
two-third of a percent of any Equity Disbursement which, when aggregated with
previous Equity Disbursements, totals from $10,000,001 up to $15,000,000.

d.                                      The Company will pay Executive one-half
of a percent of any Equity Disbursement which, when aggregated with previous
Equity Disbursements, totals from $15,000,001 up to $20,000,000.

e.                                       The Company will pay Executive
one-third of a percent of any Equity Disbursement which, when aggregated with
previous Equity Disbursements, totals from $20,000,001 up to $25,000,000.

f.                                         The Company will pay Executive
one-sixth of a percent of any Equity Disbursement which, when aggregated with
previous Equity Disbursements, totals $25,000,001 or more.

6.                                       The Retention Bonus shall be calculated
by applying the formula set forth in paragraph 5 to the Equity Disbursements. 
For clarification, the Equity Disbursements exclude payments for (a) MAIR’s
unsecured claim of approximately $6.2 million to resolve (i) unpaid fees under
the management services agreement and tax allocation agreement between MAIR and
Mesaba and (ii) the Cincinnati hangar arrangement, and (b) the unsecured claim
of Northwest which was assigned to MAIR of $7.3 million for pre-petition amounts
that Mesaba owed Northwest at the time of Mesaba’s bankruptcy.

7.                                       Executive’s payment of any portion of
this Retention Bonus is conditional upon her meeting all of the requirements or
conditions set forth above.

8.                                       For purposes of this Agreement, Cause
shall be defined as any of the following events:

a.                                       Executive embezzles funds or otherwise
misappropriates the assets of the Company, is convicted in a court of law of or
pleads guilty or no contest to a felony or any criminal activity involving
dishonesty, fraud, breach of trust or involving money or property

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of the Company, or engages in any public conduct that has a material detrimental
effect on the Company; or

b.                                      Executive materially breaches any of the
provisions of any employment agreement between Executive and the Company,
engages in willful misconduct or fails to perform or performs with gross
negligence her duties and responsibilities consistent with the lawful directions
of the Board and the Chief Executive Office; provided, however, that the Company
shall first have given Executive written notice of her breach of the terms of
such agreement, of her misconduct or failure to perform and Executive shall have
failed to remedy such violation within 30 calendar days of the receipt of such
notice.

9.                                       The Compensation Committee of the
Company’s Board of Directors shall administer this Agreement and has full and
sole authority and discretion to interpret it.  The Compensation Committee shall
determine whether a Change-in-Control has occurred, and also shall interpret and
apply the definition of Cause in determining whether an employment termination
is for Cause.

This Agreement shall be effective as of July 11, 2007.

 

MAIR Holdings, Inc.

 

 

 

/s/ Raymond W. Zehr, Jr.

 

By Chair, Compensation Committee

 

 

 

 

 

/s/ Ruth M. Timm

 

Ruth M. Timm, Executive

 

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