EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT is made and entered into as of October 2, 2009, by and
between REPUBLIC AIRWAYS HOLDINGS INC. (hereinafter referred to as the
“Company”), a Delaware corporation, and Sean Menke (hereinafter referred to as
the “Executive”).
 
RECITALS
 
A.           Executive has been the President and the Chief Executive Officer of
Frontier Airlines, Inc. (“Frontier”).
 
B.           Frontier filed for protection under Chapter 11 of the Bankruptcy
Code.
 
C.           The Company was the successful bidder in the Frontier bankruptcy
and on October 1, 2009, the Company has acquired all of the capital stock of
Frontier.
 
D.           The Company desires to employ Executive as the Executive Vice
President and Chief Marketing Officer of the Company.
 
E.           The effective date of this Agreement is October 2, 2009 (the
“Effective Date”).
 
F.           The Company and the Executive desire to enter into this Employment
Agreement to set forth their understanding of the terms of employment.
 
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
 
1.           Employment.  Effective on the Effective Date, the Company hereby
employs the Executive, and the Executive agrees to render to the Company the
services and fulfill the duties during the Term of this Agreement (as
hereinafter defined):
 
(a)           as the Executive Vice President and Chief Marketing Officer of the
Company; and
 
(b)           shall hold such other offices as may be designated by the
Company’s Board of Directors of any direct or indirect subsidiary of the Company
engaged in the operation of an airline.
 
The Executive shall render his services at the direction of the President and
the Board of Directors of the Company.  Executive shall office at the
headquarters of Frontier in Denver, or such other location as may be agreed
between the Company and the Executive (the “Location”).  The Executive agrees to
use his best efforts to promote and further the business, reputation and good
name of the Company and the affiliates (collectively, the “Company Group”) and
to promptly and faithfully comply with all instructions, directions, requests,
rules and regulations made or issued from time to time by the Company.

 
 

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During such Term, Executive will not hold outside employment, or perform
substantial personal services for parties unrelated to the Company, without the
advance written approval of the Board; provided, that it shall not be a
violation of this Agreement for Executive to (a) serve on any civic, or
charitable boards or committees so long as such service does not interfere with
the performance of Executive’s duties and responsibilities under this Agreement,
as  the Board in its reasonable discretion shall determine, or (b) manage
personal investments.
 
2.           Term and Termination.
 
(a)           Term.  The term of employment (the “Term”) shall commence on the
Effective Date and continue until December 31, 2012.
 
(b)           Termination.  This Agreement and Executive’s employment shall
automatically terminate in the event of the Executive’s death and may be
terminated as follows:
 
(i)           Either party may terminate this Agreement by providing the other
with 30 days prior written notice of such termination.
 
(ii)          The Company may terminate this Agreement immediately for Cause as
defined in Section 4 of this Agreement.
 
(iii)         The Company may terminate this Agreement in the event of
Executive’s Disability as defined in Section 4 of this Agreement.
 
(iv)         Executive may terminate this Agreement immediately for Good Reason
as defined in Section 4 of this Agreement.
 
Termination of the Agreement shall constitute termination of employment and
termination of employment shall constitute termination of the
Agreement.  References herein to either termination of the Agreement or
termination of employment shall encompass both.
 
3.           Compensation and Benefits.  As compensation for the Executive’s
services hereunder, including serving, at the designation of the Board of
Directors of the Company, as an officer of a subsidiary, the Company shall pay
the Executive the compensation and provide the benefits described below.
 
(a)           Base Salary.  During the Term, the Company shall pay the Executive
an annual base salary of $260,000 (“Base Salary”).  The Board of Directors shall
review the Executive’s Base Salary each year and shall have the right in its
discretion to increase such Base Salary.  The term “Base Salary” shall refer to
the initial Base Salary as the same may be increased by the Board of Directors.
 
(b)           Guaranteed Annual Bonus.  In addition to the Base Salary, during
the Term, the Company shall pay to the Executive a Guaranteed Annual Bonus
payment (a “Guaranteed Annual Bonus Payment”) in the amount of $77,500.  The
Guaranteed Annual Bonus Payment shall be paid each year during the Term within
10 business days after the end of the calendar year and shall not be prorated
for the 2009 calendar year.  In the event this Agreement is terminated, the
Executive shall not be entitled to any Guaranteed Annual Bonus Payment for such
year or any subsequent period.

 
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(c)           Discretionary Bonus.  In addition to the Base Salary and
Guaranteed Annual Bonus Payment, during the Term, the Company may pay to the
Executive an annual discretionary bonus (a “Discretionary Bonus”) in an amount,
if any, as the Board of Directors of the Company shall determine in its
discretion. The Discretionary Bonus, if any, may be paid each year during the
Term within 60 calendar days after the end of the calendar year and may be
prorated for the 2009 calendar year for the period from the date hereof through
December 31, 2009.  In the event this Agreement is terminated, the Executive
shall not be entitled to any Discretionary Bonus for such year or any subsequent
period, except as provided in Section 4 hereof.

(d)           Bankruptcy Exit Bonus.  On the Effective Date, the Company will
pay Executive $500,000 in cash within 10 calendar days after the Effective Date.

(e)           Equity Commitment.
 
(i)           Restricted Shares.  On the Effective Date, the Company has issued
Executive 150,000 shares of restricted common stock of the Company pursuant to
the Republic Airways Holdings Inc. 2007 Equity Incentive Plan.  All restrictions
shall lapse and such shares shall become fully vested in 16 equal quarterly
installments on the last day of each calendar quarter commencing December 31,
2009 until such shares have become fully vested.
 
(ii)          Non-Qualified Stock Options.  On the Effective Date, the Company
has issued Executive a non-qualified stock option to purchase 50,000 shares of
common stock of the Company pursuant to the Republic Airways Holdings Inc. 2007
Equity Incentive Plan at an exercise price equal to the fair market value on the
Effective Date.  Such shares shall become exercisable and fully vested in four
equal annual installments on the first, second, third and fourth anniversaries
of the Effective Date.
 
(iii)         Registration Statement.  The Company represents that the issuance
of the shares under this subsection is registered with the Securities and
Exchange Commission pursuant to a Registration Statement on form S-8.
 
(f)           Reimbursement of Business Expenses.  The Company agrees to
promptly reimburse Executive for reasonable business-related expenses incurred
in the performance of Executive’s duties under this Agreement in accordance with
Company policies.

(g)           Benefit Plans and Programs.  To the extent permitted by applicable
law,  Executive (and where applicable, his plan-eligible dependents) will be
eligible to participate in all benefit plans and programs, including
indemnification rights, insurance arrangements, 401(k), disability, medical,
pension, profit sharing, or any other plan or arrangement, including
improvements or modifications of the same, maintained by the Company for the
benefit of its executive employees (or for an employee population which includes
its executive employees), subject in any event to the eligibility requirements
and other terms and conditions of those plans and programs.

 
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(h)           Travel Privileges.    The Executive, his spouse and his dependent
children will travel with the priority code PSIP (Positive Space), and companion
or other eligible travelers will travel with the priority code SA3P (Standby
Space Available).  Executive will be provided an annual travel barter account of
$10,000 to purchase airline travel on Frontier.
 
(i)           Vacation.  The Executive shall be entitled to take three weeks of
paid vacation which shall accrue monthly during each 12 months of the
Executive’s employment hereunder, and which vacation shall be taken on dates to
be selected by mutual agreement of the Company and the Executive.

(j)           Moving Expenses.  In the event that Executive is required to move
his residence to another Company headquarters not located in Denver, Colorado
and Executive elects to move rather that terminate this Agreement under Section
4(c) hereof, the Company will reimburse Executive for the following:
 
(i)           all expenses of sale, including without limitation, broker fees;
 
(ii)          all costs incurred by Executive to move to the new residence,
including without limitation, packing, unpacking, shipping costs, temporary
housing for up to 6 months and furniture storage for up to 6 months; and
 
(iii)         any loss realized by Executive on the sale of his primary
residence in Colorado as a result of a sale at a price below his original
purchase price plus capital improvements;
 
provided, however, that the total amount reimbursed or payable by the Company
with respect to this Section 3(j) shall not exceed $250,000 for any single move.
 
(k)           No Other Compensation.  Any additional compensation specifically
provided to the Executive and not provided or made available to Company
executives generally, shall only be provided if set forth in writing and signed
by both the Company and the Executive.

(l)           Withholding.  The Company shall have the right to deduct and
withhold from the compensation payable to the Executive hereunder any amounts
required to be deducted and withheld under the provisions of any statute,
regulation, ordinance, order or any other amendment thereto, heretofore or
hereafter enacted, requiring the withholding or deduction from compensation.

 
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4.              Severance Compensation.
 
(a)           Termination Upon Death, or by the Company for Disability or
Without Cause.  In the event of Executive’s death or in the event the Company
terminates this Agreement as a result of Executive’s Disability or other than
for Cause, the Company shall pay to the Executive or his estate as the case may
be as severance compensation two times the Executive’s Base Salary as then in
effect plus two times the Executive’s Discretionary Bonus paid for the Company’s
last calendar year.  The severance compensation shall be paid in a lump sum
within ten (10) days following termination of the Agreement.  The Executive
agrees that the Company may satisfy its obligations to provide severance
compensation for death or Disability pursuant to this Section 4(a) by purchasing
and maintaining one or more insurance policies payable to either the Executive
or his designees or to the Company (with further payment to the Executive or
such designees) upon the Executive’s death or as a result of the Executive’s
Disability.  The Executive agrees to cooperate with the Company in obtaining
such insurance, including by participating in such physical examinations and
providing such personal information as may be requested by the Company’s
insurers.
 
(b)           Occurrence of a Change in Control.  In the event of a Change of
Control (provided that after such Change of Control, the Executive’s
compensation is decreased, his duties are diminished or the Company has
requested the Executive to move his residence from Denver, Colorado to another
state or has requested Executive to change the location of his business office
to an address which is more than 25 miles from the Location), the Company shall
pay to the Executive as severance compensation two times the Executive’s Base
Salary as then in effect plus two times the Executive’s Discretionary Bonus paid
for the Company’s last calendar year.  The severance compensation shall be paid
in a lump sum within ten (10) days following a qualifying event.
 
(c)           Termination by Executive for Good Reason.    If Executive
terminates this Agreement for Good Reason, the Company shall pay to the
Executive as severance compensation two times the Executive’s Base Salary as
then in effect plus two times the Executive’s Discretionary Bonus paid for the
Company’s last calendar year.  The severance compensation shall be paid in a
lump sum within ten (10) days following termination.
 
(d)           Termination by Executive for other than Good Reason.  If the
Executive terminates this Agreement other than for Good Reason, the Company
shall pay to the Executive his Base Salary for the remainder of the Term.
 
(e)           Failure to Renew.  If either the Executive or the Company elects
not to renew this Agreement at the end of the stated Term, the Company shall pay
to the Executive one times the Executive’s Base Salary as in effect at the end
of the Term.  Such payment shall be made in a lump sum within ten (10) days
following the end of the stated Term of this Agreement.

 
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(f)           Continuation of Benefits.
 
(i)           Medical Benefits.  Upon termination of this Agreement for any
reason by Executive or the Company, Executive, Executive’s spouse, and
Executive’s dependents will continue to be eligible for coverage under the
Company’s group health plan or any successor plan on the same basis as active
executive employees of the Company, their spouses, and their dependents for the
greater of (i) the balance of the stated Term of this Agreement or (ii) 12
months.    Upon the failure to renew this Agreement by the Company or by
Executive, Executive’s spouse, and Executive’s dependents will continue to be
eligible for coverage under the Company’s group health plan or any successor
plan on the same basis as active executive employees of the Company, their
spouses, and their dependents for 12 months.  If and when group health coverage
under another group health  plan first becomes  available thereafter to
Executive, Executive’s spouse, or Executive’s dependents (as applicable), the
Company’s obligations under this paragraph will cease with respect to each
person to whom such coverage becomes  available,  and such person shall have
such “COBRA” benefit continuation rights as may then be available under relevant
law, treating Executive’s employment termination date as the date of such
person’s “qualifying event.”
 
(ii)          Travel Privileges.    Upon a termination of this Agreement under
Sections 4(a), (b) or (c), Executive shall continue to receive the travel
privileges set forth in Section 3(h)(i) for two years following the termination
date.  Upon a termination of this Agreement under Section 4(d), Executive shall
continue to receive the travel privileges set forth in Section 3(h) for the
balance of the stated Term.  Upon a termination of this Agreement under Section
4(e), Executive shall continue to receive the travel privileges set forth in
Section 3(h) for one year following the termination date.
 
(g)           Acceleration of Vesting; Extension of Exercise Period.  Upon a
termination of this Agreement under Sections 4(a), (b) or (c), to the extent
Executive has not previously vested in such rights, Executive shall become fully
vested in all of the rights and interests held by  Executive under the Company’s
stock and other equity plans as of the termination date, including without
limitation any stock options, restricted stock, restricted stock units,
performance units, and/or performance shares; and the exercise date of any
options shall be extended for 24 months.
 
(h)           Gross Up.  In the event that Executive shall become entitled to
any amounts, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company (the “Regular Amounts”) that are
determined to  be subject to the tax (the “Excise Tax”) imposed by IRC Section
4999  as amended (and any similar tax that may hereafter be imposed), the
Company shall pay to Executive an additional amount (the “Gross-up Payment”)
such that the net amount retained by Executive after payment of all applicable
federal and state taxes on the sum of the Regular Amount plus the Gross-up
Payment, is equal to the net amount that would have been retained by Executive
after payment of all applicable federal and state taxes on the Regular Amount if
it had not been subject to the Excise Tax.

(i)           Cause.  “Cause” shall mean that the Executive has (i) willfully or
materially refused to perform a material part of his duties hereunder, (ii)
materially breached the provisions of Sections 5, 6 or 7 hereof, (iii) acted
fraudulently or dishonestly in his relations with the Company, (iv) committed
larceny, embezzlement, conversion or any other act involving the
misappropriation of Company funds or assets in the course of his employment, or
(v) been convicted of any felony or other crime involving an act of moral
turpitude.

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(j)           Good Reason.  “Good Reason” shall mean that (i) the Company has
materially diminished the duties and responsibilities of the Executive, (ii) any
of Executive’s Base Salary, Guaranteed Annual Bonus Payment or other
non-discretionary payments or benefits under Section 3 has been reduced, (iii)
the Company has required the Executive to move his residence from Denver,
Colorado to another state or has required Executive to change the location of
his business office to an address which is more than 25 miles from the Location
without the consent of the Executive or (iv) a Change of Control has occurred.

(i)           Change in Control.  “Change of Control” shall mean that after the
Effective Date, any person or group of affiliated or associated persons acquires
a majority or more of the voting power of the Company; (ii) the consummation of
a sale of all or substantially all of the assets of the Company; (iii) the
dissolution of the Company or (iv) the consummation of any merger,
consolidation, or reorganization involving the Company in which, immediately
after giving effect to such merger, consolidation or reorganization, less than
majority of the total voting power of outstanding stock of the surviving or
resulting entity is then “beneficially owned” (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) in the aggregate by the
stockholders of the Company immediately prior to such merger, consolidation or
reorganization.
 
(k)           Disability.  “Disability” shall mean that Executive has sustained
sickness or injury that renders Executive incapable, with reasonable
accommodation, of performing the duties and services required of Executive
hereunder for a period of 90 consecutive calendar days or a total of 120
calendar days during any 12-month period.
 
5.           Confidential Information.  The Executive recognizes and
acknowledges that he shall receive in the course of his employment hereunder
certain confidential information and trade secrets concerning the Company
Group’s business and affairs which may be of great value to the Company
Group.  The Executive therefore agrees that he will not disclose any such
information relating to the Company Group, the Company Group’s personnel or
their operations other than in the ordinary course of business or in any way use
such information in any manner, which could adversely affect the Company Group’s
business.  For purposes of this Agreement, the terms “trade secrets” and
“confidential information” shall include any and all information concerning the
business and affairs of the Company Group and any division or other affiliate of
the Company Group that is not generally available to the public.
 
6.           Non-Competition.  The Executive agrees that without the prior
written consent of the Board of Directors during the Term and for a period of 12
months following the termination of this Agreement under circumstances that
require the payment of severance compensation pursuant to Section 4 of this
Agreement, he will not participate as an advisor, partner, joint venturer,
investor, lender, consultant or in any other capacity in any business
transaction or proposed business transaction with respect to which the Executive
had a material personal involvement on behalf of the Company Group during the
last 12 months of his employment with the Company, and which is known by the
Executive as of the date of such termination or expiration to be contemplated by
the Company Group to proceed during the 12 month period following such
termination.

 
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7.           Non-Solicitation.  The Executive agrees that for a period of 12
months following the termination or expiration of this Agreement, he shall not,
without the prior written consent of the Company, directly or indirectly,
solicit for employment any person while he or she is employed by the Company;
provided, however, that nothing in this Section 7 shall prohibit Executive from
hiring applicants who applied pursuant to a general solicitation for applicants
through a newspaper or trade publication.
 
8.           Breach of this Agreement.  If the Executive commits a breach, or
threatens to commit a breach, of any of the provisions of Sections 5, 6 or 7 of
this Agreement, then the Company shall have the right and remedy to have those
provisions specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed by the Executive that the rights and privileges of
the Company granted in Sections 5, 6 or 7 are of a special, unique and
extraordinary character and any such breach or threatened breach will cause
great and irreparable injury to the Company and that money damages will not
provide an adequate remedy to the Company.
 
9.           Notices.  All notices and other communications required or
permitted hereunder shall be in writing (including facsimile and email) and
shall be deemed to have been duly given when delivered (if by hand delivery,
facsimile or email) or when mailed, certified or registered mail, return receipt
requested and postage prepaid:
 
If to the Company:
Republic Airways Holdings Inc.
     
8909 Purdue Road
Suite 300
Indianapolis, IN  46268
Attention:  Bryan K. Bedford, President
   
If to the Executive:
2015 Grape Street
Denver, Colorado 80207

10.         Applicable Law.  This Agreement was negotiated and entered into
within the State of Indiana.  All matters pertaining to this Agreement shall be
governed by the laws of the State of Indiana, applicable to contracts made and
to be performed wholly therein and without regard to conflicts principles that
would result in the application of the laws of another jurisdiction.  Nothing in
this Agreement shall be construed to require the commission of any act contrary
to law, and wherever there is any conflict between any provision of this
Agreement and any material present or future statute, law, governmental
regulation or ordinance as a result of which the parties have no legal right to
contract or perform, the latter shall prevail, but in such event the
provision(s) of this Agreement affected shall be curtailed and limited only to
the extent necessary to bring it or them within the legal requirements.

 
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11.         Entire Agreement; Modification; Consents and Waivers.  This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and supersedes any and all prior agreements or
understandings, written or oral, between the parties with respect to the subject
matter hereof.  No interpretation, change, termination or waiver of or extension
of time for performance under any provision of this Agreement shall be binding
upon any party unless in writing and signed by the party intended to be bound
thereby.  Except as otherwise provided in this Agreement, no waiver of or other
failure to exercise any right under or default or extension of time for
performance under any provision or this Agreement shall affect the right of any
party to exercise any subsequent right under or otherwise enforce said provision
or any other provision hereof or to exercise any right or remedy in the event of
any other default, whether or not similar.
 
12.         Severability.  The parties acknowledge that, in their view, the
terms of this Agreement are fair and reasonable as of the date signed by them,
including as to the scope and duration of post-termination
activities.  Accordingly, if any one or more of the provisions contained in this
Agreement shall for any reason, whether by application of existing law or law
which may develop after the date of this Agreement, be determined by an
arbitrator or court of competent jurisdiction to be excessively broad as to
scope of activity, duration or territory, or otherwise unenforceable, the
parties hereby jointly request such court to construe any such provision by
limiting or reducing it so as to be enforceable to the maximum extent compatible
with then-applicable law.  If any one or more of the terms, provisions,
covenants or restrictions of this Agreement shall nonetheless be determined by
an arbitrator or court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
 
13.         Assignment.  Neither Party shall assign this Agreement or any of its
rights hereunder without the prior written consent of the other Party.
 
14.         Counterparts.  This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
 
15.         Arbitration.  Each of the parties hereby irrevocably and
unconditionally consents to arbitrate any dispute arising out of or relating in
any manner to this Agreement or the employment relationship contemplated hereby
or the termination thereof, or any alleged breach of any term or provision of
this Agreement, except for (a) matters litigated pursuant to Section 8 of this
Agreement and (b) rights provided by statute to Executive to access federal
courts under benefit plans.  Such arbitration shall be conducted in Denver,
Colorado, if initiated by Executive, and in Indianapolis, Indiana, if initiated
by the Company, by a single arbitrator in accordance with the rules of the
American Arbitration Association then in effect.  Judgment may be entered on the
arbitrator’s award in any federal or state court in Colorado or Indiana, as the
case may be (and the parties expressly consent to the jurisdiction of such
courts), or in any other court having jurisdiction.  Each of the Parties agrees
that in any arbitration arising out of or relating to this Agreement or the
employment relationship contemplated hereby or the termination thereof, or any
alleged breach of any term or provision of this Agreement or in any action to
enter judgment on an award in such arbitration each party shall bear its own
fees and expenses.

 
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16.         Survival.  The provisions of Sections 4 through 15 of this Agreement
shall survive any expiration or termination of this Agreement.
 
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the date first above written.

 
REPUBLIC AIRWAYS HOLDINGS INC.
       
By:
     
Name:
   
Title:
       
/s/ Sean Menke
 
Sean Menke

 
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