**Exhibit10.13**

**SEVERANCECOMPENSATION PLAN**

**1.****             ****Purpose of Plan**********. ****The purpose of thePlan is to protect and retain qualified employees and to reward employees forloyal service to the Company by providing severance compensation to employeesupon their involuntary termination of employment resulting from specifiedevents.

**2.****             ****Definitions**********. ****The terms definedin this section shall have the meaning given below:

****a.********            ********“********Affiliate********” means a person thatdirectly, or indirectly, through one or more intermediaries, is controlled bythe Company.****

b.             ****“BaseCompensation”**** means (i) Employee’s annual salary determinedas of the date the Employee’s termination is effective plus (ii) the Employee’stargeted annual incentive bonus for the fiscal year of the Company in whichEmployee was terminated.  A “week” ofBase Compensation shall mean Base Compensation divided by 52.

c.             **“Cause”**shall be defined as any of the following events:  (i) Employee embezzles funds or otherwisemisappropriates the assets of the Company, is convicted in a court of law of orpleads guilty or no contest to a felony or any criminal activity involvingdishonesty, fraud, breach of trust or involving money or property of theCompany, or engages in any public conduct that has a material detrimentaleffect on the Company, or (ii) Employee materially breaches any of theprovisions of an employment agreement between Employee and the Company, or(iii) Employee engages in continued and deliberate neglect or willfulmisconduct in connection with the performance of, or refusal to performEmployee’s duties, any of which has not been cured within thirty (30) daysafter Employee has been provided with written notice of the same; provided,however, that the Company shall first have given Employee written notice of hisbreach of the terms of the Management Compensation Agreement or failure toperform, and Employee shall have failed to remedy such violation within 30calendar days of the receipt of such notice.

d.             ****“Change-in-Control”****means the time when (i) there is an acquisition by any individual, entity orgroup, including any “person” within the meaning of Section 13(d)(3) of theExchange Act, of beneficial ownership within the meaning of Rule 13d-3promulgated under the Exchange Act, of 50% or more of the combined voting powerof the then outstanding securities of the Company, other than (A) anyacquisition directly from the Company or a subsidiary of the Company, (B) anyacquisition by the Company or a subsidiary of the Company, (C) any acquisitionby an employee benefit plan (or related trust) sponsored or maintained by theCompany or a subsidiary of the Company (all such persons, referenced in(A)-(C), the “Exempted Persons”), or (ii) approval by the board of directors orshareholders of the Company of (A) a plan of complete liquidation ordissolution 

----

of the Company, or (B)the sale or other disposition of all or substantially all of the assets of theCompany, other than to one or more Exempted Persons.

e.             ****“Code”****means the Internal Revenue Code of 1986, as amended.

f.              ****“Committee”****means the Compensation Committee of the Board of Directors of the Company, orany successor to the Committee.

g.             ****“Company”****means MAIR Holdings, Inc.

h.             ****“Employee”****means a person employed by the Company as a non-union salaried or hourlyemployee who is regularly scheduled to work on a consistent and ongoing basis.

****i.********             **“Exchange Act”******means the SecuritiesExchange Act of 1934, as amended.****

j.              ****“ManagementDirector”********means an Employee of the Company whose job description identifies theEmployee’s position as a director-level position.****

k.             ****“Officer”********means an Employee who isappointed as an officer of the Company by the Company’s Board of Directors or acommittee thereof.****

l.              ****“Plan”****means the Company’s Severance Compensation Plan as stated herein, and as it maybe amended from time to time.

m.            ****“QualifyingTermination”**** means (i) an Employee’s involuntarytermination without Cause due to the elimination of a job position inconnection with an organizational restructuring, or (ii) an Employee’sinvoluntary termination without Cause due to a Change-in-Control.  An involuntary termination within twelve (12)months following a Change-in-Control will be deemed to be due to suchChange-in-Control.

n.             **“Year ofService”** means a consecutive 365-day period of employment with theCompany, including employment with any of the Company’s subsidiaries, and doesnot include partial years.

**3.****             ****General Eligibility Requirements**********.  All Employees of the Company shall be****eligible,upon a Qualifying Termination, to receive the benefits described in Sections 4,5 and 6 of the Plan.

****4.********            **SeveranceCompensation******.****

a.             Upon the QualifyingTermination of any eligible Employee who has been employed by the Company forat least 12 months, the Employee shall be entitled to severance compensation asfollows:

i.              If the Employee isnot an Officer or Management Director, the Employee shall receive a severancebenefit equal to 3 weeks of Base Compensation 

2

----

for each Year of Service,with a minimum severance benefit equal to 12 weeks and a maximum severancebenefit equal to 52 weeks.

ii.             If the Employee is aManagement Director, the Employee shall receive a severance benefit equal to 3weeks of Base Compensation for each Year of Service, with a minimum severancebenefit equal to 16 weeks and a maximum severance benefit equal to 52 weeks.

iii.            If the Employee is anOfficer, the Employee shall receive a severance benefit equal to 52 weeks ofBase Compensation.

b.             NotwithstandingSection 4a, the Committee shall have the authority, in its full discretion, tomodify the stated benefit level above, but not below, that provided by the Planand to authorize payment of additional pro rata anticipated bonuses through thedate of termination for a particular Employee in consideration of thecircumstances surrounding that Employee’s separation.

c.             The severancecompensation shall be paid to the eligible Employee by the Company ininstallments no less frequently than monthly, with the first payment due withinthirty (30) days of the Employee’s Qualifying Termination, provided that, ifthe Qualifying Termination resulted from a Change-in-Control involving theliquidation of the Company, the severance compensation shall be paid to theeligible Employee by the Company in a lump sum within thirty (30) days of theEmployee’s Qualifying Termination.  Inthe event that an Employee has commenced receipt of benefits under this Planand dies before receipt of all payments, the remaining payments will be paid tohis or her estate in a lump sum within sixty (60) days of Employee’sdeath.  The means of paying severancecompensation hereunder may be modified, if necessary, pursuant to paragraph 7.

****5.********             Treatment of StockOptions********.****

****a.********            ********Upon a QualifyingTermination, all of Employee’s unvested stock options shall immediately vest.****

****b.********            ********Notwithstanding the aboveprovision of Section 5, if the result of a Change-in-Control is that no sharesof the Company’s stock remain available for issuance following suchChange-in-Control, then the Committee shall (i) take steps necessary toimmediately vest any unvested stock options, and (ii) provide the Employee witha reasonable period of time to exercise any vested options, including optionsthat will vest upon the effective time of the Change-in-Control.  Such exercise period shall not continuebeyond the original expiration date of the option.****

**6.****             ****Continuation of Benefits******.  Upon the Qualifying Termination of anyeligible Employee, the Employee shall be entitled to participate in eachCompany medical, dental, life and disability plan or benefit in which theEmployee participated immediately prior to the Qualifying Termination, upon thesame terms and at the same level of coverage (single or family) in placeimmediately prior to the Qualifying Termination, provided that the 

3

----

Company or an Affiliatecontinues to sponsor the relevant plan. With respect to medical and dental coverage which the Employee haselected to continue under COBRA or applicable state law through a plansponsored by the Company or an Affiliate, the Company will subsidize the costof premiums for such continued coverage for the applicable period to the extentthe premiums for such coverage exceed contribution rates paid by the Employeeon the date of termination of employment. With respect to life and disability coverage, the Company will subsidizethe cost of premiums for such continued coverage for the period in which theEmployee continues to receive severance payments under Section 4(a) above, andno coverage is available after that period expires, with life insurancecontracts being assignable to Employees, as available.  The benefit to be provided, or payments to bemade under this paragraph, shall be reduced to the extent that the Employeereceives benefits or payments for the same occurrence under another employer-sponsoredplan to which the Employee is entitled because of the Employee’s employmentsubsequent to the Qualifying Termination.

**7.****             Section409A Exception**. Severance compensation shall be paid under the terms ofParagraph 4, unless they exceed the limits of Paragraph 7a, below, in which casethe excess amount of such payments shall be paid out as provided in Paragraphs7b and c, as applicable.

a.             Severance paymentsmust not total more than two times the lesser of:

i.              the Employee’sannualized compensation, including base pay and bonus, and based on Employee’sannual rate of pay for his taxable year preceding the year of his employmenttermination, or

ii.             the annual maximumamount that may be taken into account under a qualified plan pursuant to CodeSection 401(a)(17) for the year of the Executive’s employment termination.

b.             Payments within thelimits set forth in Paragraph 7a shall be paid to an Employee in equal amountsfor the severance period described in Paragraph 4a.

c.             That portion ofpayments to any Employee exceeding the limits in a., above, shall be paid inequal installments over a period decided by the Committee which will end notlater than two-and-one-half months after the end of the taxable year of theEmployee or the Company, whichever is later, in which the Employee’s QualifyingTermination occurred.

**8.****             Section280G Payments**.  If the payment ofbenefits under the Plan, either alone or together with other payments to anEmployee from the Company, would constitute a “parachute payment” as defined inSection 280G of the Code, such payment of benefits shall be reduced to thelargest amount that will result in no portion of the severance compensationpayments under the Plan being subject to the excise tax imposed by theprovisions of Section 4999 of the Code, or being disallowed as deductions tothe Company under Section 280G of the Code. The determination of any reduction in severance compensation paymentsunder this Section 8 pursuant to the foregoing 

4

----

provision shall be madeby the Company’s independent public accountants in good faith afterconsultation with the Company and the Employee, and such determination shall beconclusive and binding.

**9.****             ****Amendment.********** ****The Companyreserves the right at any time to terminate or amend this Plan in any respectand without the consent of any Employee. However, the Plan, as amended, may notbe terminated or further amended in any respect upon the occurrence of aQualifying Termination. The power to amend, modify or terminate the Plan at anytime is reserved to the Committee.  TheCompany agrees to amend its stock plans and agreements if necessary toaccommodate the accelerated vesting periods provided hereunder.

**10.****          ****Employee Agreements**********. ****In the event anEmployee and the Company execute an Employment Agreement or other SeveranceAgreement that provides for severance benefits upon the Employee’s termination,the terms of this Plan as to a Qualifying Termination (as defined herein) shallbe applied first, with any payments due to a Qualifying Termination under anyother agreement to be offset by payments made hereunder.  The terms of this Plan shall control as topayments by the Company due to a Qualifying Termination.

**11.****          ****Unfunded Obligations******.  All benefits due a Participant or theParticipant’s beneficiary under this Plan are unfunded and unsecured, and arepayable out of the general funds of the Company.  The Company, in its sole and absolutediscretion, may establish a “grantor trust” for the payment of benefits andobligations under this Plan, the assets of which shall at all times be subjectto the claims of creditors of the Company, as provided for in the trust.  The trust shall make distributions inaccordance with the terms of the Plan.

**12.****          ReleaseRequired**.  Payment of benefitsand other rights granted under the Plan are expressly conditioned upon theEmployee signing a release of all claims against the Company and relatedparties on a form to be determined from time to time in the sole discretion ofthe Company.  The release shall releasethe Company and its predecessors, successors and Affiliates, and theirdirectors, officers, employees, agents and other related parties from any andall liabilities in connection with the Employee’s relationship with theCompany.  Severance payments will beginonly after the required release becomes final and the release is no longersubject to revocation or rescission by the Employee.

**13.****          ****Transferability of Benefits**********. ****The right toreceive payment of any benefits under this Plan shall not be transferred,assigned or pledged, except by beneficiary designation, by will, or under thelaws of descent and distribution, and then only if, and to the extent,permitted by the underlying benefit plan.

**14.****          ****Taxes**********. ****The Company maywithhold from any payment due under this Plan any taxes required to be withheldunder applicable federal, state or local tax laws or regulations.

**15.****          ****Construction, Governing Laws**********. ****Except to theextent that federal legislation or applicable regulations shall govern, thevalidity and construction of the Plan and each of 

5

----

its provisions shall besubject to and governed by the laws of the State of Minnesota.  The Committee has sole authority and fulldiscretion to apply, interpret and amend the Plan, and to determine eligibilityand the amount of an Employee’s benefits hereunder.

**16.****          ****Severability**********. ****If any provisionof this Plan is found, held or deemed to be void, unlawful or unenforceableunder any applicable statute or other controlling law, the remainder of thisPlan shall continue in full force and effect.

This Plan shall beeffective as of the date approved by the Committee.
|        | **MAIR  Holdings, Inc.**          |
|--------|-----------------------------------|
|   |                              |
|   |                              |
|   | /s/ Raymond W.  Zehr, Jr.         |   |
|   | By Chair,  Compensation Committee |
|   |                              |
|   | Dated: July 11,  2007             |

 

6

----