Abstract:
A method for implementing an employee stock ownership plan by monitoring performance of an equity-issuing commercial entity purchasing a predetermined percentage of a commodity used by the commercial entity, and transferring, under binding call options, an equity interest in the commercial entity, computer-tracking at least one of contributions and deductible dividends in transit to the employee stock ownership plan; and monitoring securitized advances made by a commodity trust to the commercial entity to enables the commercial entity to purchase the commodity.

Description:
CLAIM OF PRIORITY 
     The present patent application is a continuation-in-part patent application claiming priority from application Ser. No. 08/212,705, filed Mar. 15, 1994, now abandoned. 
    
    
     BACKGROUND OF THE INVENTION 
     1. Field of the Invention 
     The present invention relates to an improved system and mechanism for implementing an employee stock ownership plan involving a commercial entity, while, at the same time, substantially reducing the operating costs of that same commercial entity. The mechanism of the present invention includes apparatus, methods, and data structures pertaining to data processing with digital electrical computer adapted to carry out the accounting, modeling, financial computing and communications related thereto. In particular, the present invention provides an improved employee stock ownership plan, while, at the same time, providing a funding process for a commercial entity having ongoing commodity requirements. 
     2. Known Prior Art 
     An employee stock ownership plan (ESOP) as defined by the Employee Retirement Income Security Act (ERISA) is a stock bonus plan or a combination stock bonus and money purchase plan designed to invest primarily in the employer&#39;s equity securities. Employee stock ownership plans provide advantages both to commercial entities and to their employees, one advantage to the employees is that they acquire an equity ownership interest in the company. An advantage to the commercial entity is the ability to obtain equity financing from internal sources. 
     An employee stock ownership plan may desire to purchase a large amount of securities from a key shareholder or, perhaps, from the corporation itself. Typically, the employee stock ownership plan has insufficient assets to pay for these purchases, so it must borrow funds from an institutional lender. This type of concept traditionally constitutes the basis for “leveraged” employee stock ownership plan transactions. 
     In recent years, the use of employee stock ownership plans has declined and been criticized, primarily due to exploitation through excessive debt leveraging and other abuses. The practice of buying a company, taking on debt and encumbering the employee stock ownership plan with highly leveraged tax-advantaged debt was regularly practiced. 
     Congressional efforts have attempted to reduce this perceived misuse of employee stock ownership plans. For instance, recent changes to ERISA require that, for tax-advantaged sales to an employee stock ownership plan, an entity must hold stock for three years prior to any sale to an employee stock ownership plan. Further, immediately following the sale of any stock to a plan, the employee stock ownership plan must now own at least thirty percent (30%) of the company, and the proceeds from the sale of stock must be reinvested in a qualifying U.S. security within fifteen (15) months. Additionally, an employee stock ownership plan must own at least fifty percent (50%) plus one (1) share of the stock in a company in order to engage in tax-advantaged borrowing. 
     As a result, the use of employee stock ownership plans has diminished because the employee stock ownership plan must have controlling interest in the company in order to borrow on a tax-advantaged basis. Also, new restrictions on the use of borrowed funds now exist. Further, there are now restrictions on the amount of pre-tax profits that can be paid into an employee stock ownership plan. 
     SUMMARY OF THE INVENTION 
     A. Objects of the Invention 
     A principal object and purpose of the present invention is to create a system which facilitates providing employees with equity in the company, as part of an employee stock ownership plan, preferably with minimal to no leverage through debt. At the same time, the present invention facilitates compliance with all recent legislative, judicial, and regulatory mandates. 
     It is a further principal object and purpose of the present invention to provide an improved employee stock ownership plan, combined with a commodity funding mechanism (i.e., machine, as in a computer system), for a commercial entity. 
     It is a further object and purpose of the present invention to provide an employee retirement plan utilizing an employee stock ownership plan and the commodity funding mechanism. 
     It is still another object of the present invention to provide a multiplicity of cooperating digital electrical computer systems and communications systems for carrying out a corresponding reduction in the commodity price to the company and provision of incremental ownership of the commercial entity by its employees over a predetermined time period. 
     B. Summary of the Invention 
     These and other objects of the present invention, as would be appreciated in overcoming the limitations of the prior art by the instant mechanism, are accomplished by cooperating digital electrical computer systems, one of which handles computing for principally four (4) primary entities, another for each commodity supplier or suppliers, as well as one for respective financial institutions such as a bank, and insurance provider, etc. 
     One entity can be labeled a “commercial entity,” such as a corporation or partnership, which may have equity interests that are issued to shareholders, partners or other equity owners. The present invention applies particularly well to commercial entities involving manufacturing or services which utilize one or more commodities on a regular, ongoing basis. 
     A second entity can be termed a “commodity trust”, which is formed to hold assets for the investor entity. An investor entity may be an individual, a partnership, a corporation or any combination thereof. 
     A third entity can be termed an “Employee Stock Ownership Plan” (ESOP) formed, in accordance with Internal Revenue Code provisions, as a nominal employee stock ownership plan. The initial commercial entity equity holding by the ESOP shall be small. The ESOP is incrementally funded by a contribution of pre-tax and/or post-tax earnings by the commercial entity. 
     A fourth entity can be termed an “investor entity”. Over a predetermined period of time, the ESOP will purchase from the investor entity in the commodity trust all shares of the commercial entity equity released from the commodity trust as earned by the investor entity by making commodity purchase payments. 
     As an overview, the assets or investments held by the commodity trust will include cash or other reserves sufficient to provide funds to cover a predetermined share of the cost of the commodity requirements of the commercial entity for a predetermined period of time. The commodity trust will initially hold in trust a substantial amount of the equity of the commercial entity. The commodity trust agrees to pay for a predetermined percentage of the commodity requirements of the commercial entity for a predetermined period of time. The commercial entity places periodic orders for the commodity with the trust and remits payment for the predetermined percentage of the total purchase price to the commodity trust. The commodity trust then supplements the payment advanced by the commercial entity with the predetermined amount necessary to fill the order and the commercial entity thereupon makes payment in full to the commodity supplier(s). 
     The commodity trust continually funds its share of the purchases the ongoing commodity requirements of the commercial entity from commodity suppliers as stated above for the predetermined life of the mechanism of the invention. 
     The commodity trust will release the commercial entity equity on a prorata basis as earned, to the investor entity, in proportion to the expenditure of funds by the trust during specific time periods. The ESOP then exercises a binding call on and purchases all of the released commercial entity equity from the investor entity, at the publicly traded price, or at a price determined periodically and subject to independent outside valuation and fairness opinions as required by law. 
     The investor entity agrees to sell to the ESOP pursuant to a binding call, all of the commercial entity equity earned and released from the trust over the life of the mechanism of the invention. When all assets in the trust are exhausted, the useful life of the trust will cease. 
     More particularly, the present invention is directed to mechanism-implemented (i.e., computer implemented) aspects of an approach to efficiently carrying out the complex and long-term transactions in the commodity funding approach. This includes providing respective digital electrical computer systems for each of the entities (or equivalents like having fewer machines run more than one program) to carry out the commodity funding and ESOP purchase transactions. 
     These and other objects can be implemented by means including a computer system for monitoring the monthly profit and loss indexed performance of an equity-issuing commercial entity and for purchasing a predetermined percentage of one or more commodities used by said commercial entity, and transferring, under binding call options, an equity interest in said commercial entity from an investor entity and all other shareholders to an employee stock ownership plan entity funded by said commercial entity, comprising: 
     a programmed digital electrical computer comprising a processor, an input device, an output device, and a memory, the processor being controlled by a program including 
     a. means for storing pre-determined (monthly profit and loss indexed) performance criteria for said commercial entity including management, operations, and commodity ordering performance criteria, and maintaining an account designated for commodity purchase transactions; 
     b. means for monitoring said commercial entity&#39;s actual ongoing profit and loss indexed performance data, including management, operations, document-generation, and commodity ordering performance data; and 
     c. means for periodically comparing said monitored performance data against said pre-determined criteria to determine whether to authorize the electronic release of funds from said designated account for commodity purchases in response to said monitored commodity ordering activity data; 
     d. means for periodically comparing said actual performance of said commercial entity with said predetermined performance criteria and determining whether to transfer a predetermined quantum or equity in said commercial entity to said investor entity; and 
     e. means for permitting said employee-owned stock ownership plan entity to periodically exercise binding call options on equity transferred to the investor entity as a result of the purchases made. 
     Implementation can also be viewed as including a digital electrical computer system for monitoring the performance of an equity-issuing commercial entity and for purchasing a predetermined percentage of one or more commodities used by said commercial entity through an independent entity, and transferring an equity interest in said commercial entity from an investor entity to said independent entity for subsequent transfer in accordance with pre-determined conditions to said investor entity under a binding call option by an employee stock ownership plan entity funded by said commercial entity, comprising: 
     a programmed digital electrical computer comprising a processor, an input device, an output device, and a memory, the processor being controlled by a program including 
     a. means for storing pre-determined monthly profit and loss performance criteria for said commercial entity including management, operations, and commodity ordering performance criteria, and maintaining an account designated for commodity purchase transactions; 
     b. means for monitoring said commercial entity&#39;s actual profit and loss performance data, including management, operations, and commodity ordering performance data; 
     c. means for said independent entity to periodically compare said monitored performance data against said pre-determined criteria to determine whether to authorize the electronic release of funds from said designated account for commodity purchases in response to said monitored commodity ordering activity; 
     d. means for periodically comparing said actual performance of said commercial entity with said predetermined criteria to determine whether to transfer a predetermined quantum of equity in said commercial entity to said investor entity; and 
     e. means for permitting said employee-owned stock ownership plan entity to periodically exercise binding call options on equity transferred to the investor entity. 
     In either case, the program is adapted to such that; (1) said monitoring of said commercial entity&#39;s actual commodity ordering performance data is performed electronically; (2) said monitoring of said commercial entity&#39;s actual performance data is performed electronically; (3) said periodic comparison of said actual performance of said commercial entity with said predetermined performance criteria to determine whether to transfer a predetermined quantum of equity in said commercial entity to said investor entity, is performed electronically; and/or (4) said means for permitting said employee-owned stock ownership plan entity to periodically exercised binding call options on equity transferred to the investor entity, comprises electronic transaction processing. 
     Either of the above-mentioned systems can preferably be made by further including: 
     a. means for storing pre-determined risk assessment criteria for said commercial entity; 
     b. means for monitoring said commercial entity&#39;s actual risk assessment data; and 
     c. means for periodically comparing and analyzing said actual risk assessment data with said predetermined risk assessment criteria to generate an indication of whether actual risk has exceeded, said pre-determined criteria and to generate an indication thereof. 
     Still more preferably, either system is made by further comprising 
     a. means for storing pre-determined risk assessment criteria for said commercial entity; 
     b. means for monitoring said commercial entity&#39;s actual risk assessment data; and 
     c. means for periodically electronically comparing and analyzing said actual risk assessment data with said predetermined risk assessment criteria to generate an indication of whether actual risk has exceeded said pre-determined criteria and to generate an indication thereof. 
     The present invention also contemplates data structures, including computed necessary intermediates, and methods such as a computer-implemented method for monitoring the performance of an equity-issuing commercial entity and for purchasing a predetermined percentage of one or more commodities used by said commercial entity, and transferring, under binding call options, an equity interest in said commercial entity, and transferring, under binding call options, an equity interest in said commercial entity from an investor entity to an employee stock ownership plan entity funded by said commercial entity, the method comprising: 
     a. storing pre-determined performance criteria for said commercial entity including management, operations, and commodity ordering performance criteria, and maintaining an account designated for commodity purchase transactions; 
     b. monitoring said commercial entity&#39;s actual performance data, including management, operations, and commodity ordering performance data; 
     c. periodically electronically comparing said monitored performance data against said pre-determined criteria to determine whether to authorize the electronic release of funds from a designated account for commodity purchases in response to said monitored commodity ordering activity data; 
     d. periodically comparing said actual performance of said commercial entity with said predetermined performance criteria and determining whether to transfer a predetermined quantum of equity in said commercial entity to said investor entity; and 
     e. permitting said employee-owned stock ownership plan entity to periodically exercise binding call options on equity transferred to the investor entity. 
     More preferably, the invention can be viewed as a computer-implemented method for monitoring the performance of an equity-issuing commercial entity and for purchasing a predetermined percentage of one or more commodities used by said commercial entity through an independent entity, and transferring an equity interest in said commercial entity from an investor entity to said independent entity for subsequent transfer in accordance with pre-determined conditions to said investor entity under a binding call option by an employee stock ownership plan entity funded by said commercial entity, the method comprising: 
     a. storing pre-determined performance criteria for said commercial entity in cluding management, operations, and commodity ordering performance criteria, and maintaining an account designated for commodity purchase transactions; 
     b. monitoring said commercial entity&#39;s actual performance data, including management, operations, and commodity ordering performance data; 
     c. said independent entity periodically electronically comparing said monitored performance data against said pre-determined criteria to determine whether to authorize the electronic release of funds from said designated account for commodity purchases in response to said monitored commodity ordering activity. 
     d. periodically comparing said actual performance of said commercial entity with said predetermined criteria to determine whether to transfer a predetermined quantum of equity in said commercial entity to said investor entity; and 
     e. permitting said employee-owned stock ownership plan entity to periodically exercise binding call options on equity transferred to the investor entity. 
     In either case, the method is preferably carried out such that (1) said monitoring of said commercial entity&#39;s actual commodity ordering performance data is performed electronically; (2) said monitoring of said commercial entity&#39;s actual performance data is performed electronically; and/or (3) said means for permitting said employee-owned stock ownership plan entity to periodically exercise binding call options on equity transferred to the investor entity, comprises electronic transaction processing. 
     Also in either case, the method can be carried out as further comprising 
     a. storing pre-determined risk assessment criteria; 
     b. monitoring said commercial entity&#39;s actual risk assessment data; and 
     c. periodically comparing and analyzing said actual risk assessment data with said predetermined risk assessment criteria to generate an indication of whether actual risk has exceeded said pre-determined criteria and to generate an indication thereof. 
     Further, in either case, the method can be carried out as further comprising 
     a. means for storing pre-determined risk assessment criteria for said commercial entity; 
     b. means for monitoring said commercial entity&#39;s actual risk assessment data; and 
     c. means for periodically electronically comparing and analyzing said actual risk assessment data with said predetermined risk assessment criteria to generate an indication of whether actual risk has exceeded said pre-determined criteria and to generate an indication thereof. 
     Yet another way of viewing the present invention is a computer-implemented method for monitoring the performance of an equity-issuing commercial entity and for purchasing a predetermined percentage of one or more commodities used by said commercial entity through an independent entity, and transferring an equity interest in said commercial entity from an investor entity to said independent entity for subsequent transfer in accordance with pre-determined conditions to said investor entity under a binding call option by an employee stock ownership plan entity funded by said commercial entity, the method comprising: 
     a. storing pre-determined performance criteria, including management, financial, and operating data, data representing ERISA-imposed limitations on funds and equity transfers, data representing commodity ordering information, data representing equity available for transfer via said method, and predefined criteria for the transfer and release of said equity; 
     b. maintaining at least one account designated for carrying out said method through which equity and funds are transferred; 
     c. transferring funds from said investor entity to said designated account and transferring equity in said commercial entity from said commercial entity to said designated account in accordance with predefined stored conditions; 
     d. periodically storing information regarding actual financial and operating performance of said commercial entity; 
     e. storing commodity ordering information for requesting a commodity purchase: 
     f. comparing and analyzing said actual financial and operating performance data to said commercial entity and said predetermined performance criteria to determine whether to fund a pending commodity order transaction, to determine whether performance is satisfactory or unsatisfactory, and to indicate whether investor&#39;s funds are at risk whether funds should be returned to investors or whether commodity funding should be suspended; 
     g. based on the results of step f, conditionally initiating commodity purchase and electronically transferring funds from said designated account to the purchasing account for the benefit of the commodity supplier for the purchase of said commodity for delivery to said commercial entity if said evaluation of the performance of said commercial entity is satisfactory; 
     h. evaluating said actual operating and financial performance data and said predefined performance criteria, including ERISA-imposed conditions and limits and indicating amount of pre-tax contributions, and indicating the amount of equity to be released for transfer to investor equity; 
     i. storing information indicating funding levels for pre-tax payroll contributions, pre-tax dividends, and post-tax contributions authorized for transfer to said employee stock ownership plan; 
     j. periodically transferring equity from said investor entity to said employee stock ownership plan in accordance with said predefined criteria for the transfer and release of said equity and transferring funds from said employee-owned stock purchase program to said investor entity; and 
     k. repeating the steps of the method until all of said authorized equity has been transferred to said employee stock ownership plan. 
     The methods outlined above can be further carried out such that (1) said predetermined performance criteria are periodically adjusted; (2) said pre-determined performance criteria are stored electronically; (3) said transfer of funds from said investor entity to said designated account is performed electronically; (4) said transfer of equity in said commercial entity from said commercial entity to said designated account is performed electronically; (5) said periodic storage of information regarding actual financial and operating performance of said commercial entity is performed electronically; (6) said comparison and analysis of said actual financial and operating performance data and said stored performance criteria, are performed electronically; (7) said storage of commodity ordering information is performed electronically; (8) said commodity purchase transaction is performed electronically; (9) said evaluation of said actual operating and financial performance data and said predefined performance criteria and indicating the amount of equity to be released for transfer to investor equity, is performed electronically; (10) said storage of information indicating funding levels for pre-tax payroll contributions, pre-tax dividends, and post-tax contributions authorized for transfer to said employee stock ownership plan, is performed electronically; (11) periodic equity transfer from said investor entity to said employee stock ownership plan, is performed electronically; and/or (12) said periodic transfer of funds from said employee-owned stock purchase program to said investor entity, is performed electronically. 
     Still further, the invention can be preferably viewed as including a computer-implemented method of monitoring the performance of an equity-issuing commercial entity and for purchasing a predetermined percentage of one or more commodities used by said commercial entity through an independent entity, and transferring an equity interest in said commercial entity from an investor entity to said independent entity for subsequent transfer in accordance with pre-determined conditions to said investor entity under a binding call option by an employee stock ownership plan entity funded by said commercial entity, the method comprising: 
     a. electronically storing pre-determined performance criteria, including management, financial, and operating data, data representing ERISA-imposed limitations on funds and equity transfers, data representing commodity ordering information, data representing equity available for transfer via said method, and predefined criteria for the transfer and release of said equity. 
     b. maintaining at least one account designated for carrying out said method through which equity and funds are transferred; 
     c. electronically transferring funds from said investor entity to said designated account and transferring equity in said commercial entity from said commercial entity to said designated account in accordance with predefined stored conditions; 
     d. periodically electronically storing information regarding actual financial and operating performance of said commercial entity; 
     e. electronically storing commodity ordering information for requesting a commodity purchase; 
     f. electronically comparing and analyzing said actual financial and operating performance data of said commercial entity and said pre-determined performance criteria to determine whether to fund a pending commodity order transaction, to determine whether performance is satisfactory or unsatisfactory, and to indicate whether investor&#39;s funds are at risk, whether funds should be returned to investors or whether commodity funding should be suspended; 
     g. based on the results of step f, conditionally initiating commodity purchase and electronically transferring funds from said designated account to the commodity supplier for the purchase of said commodity for delivery to said commercial entity if said evaluation of the performance of said commercial entity is satisfactory; 
     h. electronically evaluating said actual operating and financial performance data and said predefined performance criteria, including ERISA-imposed conditions and limits and indicating amount of pre-tax payroll contributions, pre-tax dividends, and post-tax contributions, and indicating the amount of equity to be released to transfer to investor equity; 
     i. electronically storing information indicating funding levels for pre-tax payroll contributions, pre-tax dividends, and post-tax contributions authorized for transfer to said employee stock ownership plan; 
     j. periodically transferring equity from said investor entity to said employee stock ownership plan in accordance with said predefined criteria for the transfer and release of said equity and transferring funds from said employee stock ownership plan to said investor entity; and 
     k. repeating the steps of the method until all of said authorized equity has been transferred to said employee owned stock purchase plan. 
     As with any of the foregoing methods, each can be carried out such that (1) said monitoring of said actual performance data is performed by said independent entity; and/or (2) said comparison of said actual performance data of said commercial entity with said predetermined criteria to determine whether to transfer a predetermined quantum of equity in said commercial entity, is performed by said independent entity. Each method can also include 
     a. storing pre-determined risk assessment criteria for said commercial entity; 
     b. monitoring said commercial entity&#39;s actual risk assessment data; and 
     c. periodically comparing and analyzing said actual risk assessment data with said predetermined risk assessment criteria to generate an indication of whether actual management and operations risk to said investor entity has exceeded said pre-determined criteria and to generate an indication thereof. Preferably each also includes preventing, in response to operator input, said electronic transfer of funds. 
     Likewise, each said digital electrical computer system can be controlled by a program including 
     a. means for storing pre-determined risk assessment criteria for said commercial entity; 
     b. means for monitoring said commercial entity&#39;s actual risk assessment data; and 
     c. means for periodically comparing and analyzing said actual risk assessment data with said predetermined risk assessment criteria to generate an indication of whether actual management and operations risk to said investor entity has exceeded said pre-determined criteria and to generate an indication thereof. 
     Likewise, each said digital electrical computer system can include program means for preventing, in response to operator input, said electronic transfer of funds. 
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS 
     FIG. 1 is a simplified diagram of the primary entities of the commodity funding system of the present invention along with their interrelation. 
     FIGS. 2 a  and  2   b  are simplified flow charts of the steps of the commodity funding computer system of the present invention. 
     FIG. 3 is a diagram of the interrelated computer systems and communications of the present invention. 
     FIG. 4 is a more focused diagram of the commercial entity computer system in accordance with the present invention. 
     FIGS. 5A-5C are flow charts for the present invention. 
    
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT 
     Referring to the drawings in detail, FIG. 1 illustrates a simplified diagram of the four (4) primary entities, along with the commodity suppliers), required in order to implement the system of the present invention (shown at box 10). 
     A commercial entity (shown at box 12) may be any corporation, partnership or other commercial entity having equity interests that may be held by shareholders, partners or other equity owners (such as shares of stock). The commercial entity is involved in manufacturing or services which consistently utilize one or more commodities on an ongoing basis. An example of this would be an airline requiring substantial amounts of fuel on a regular basis for ongoing operations. 
     The commercial entity issues shares of stock or similar equity interests representing ownership in the company. While the explanation of the system illustrated herein describes a start-up operation, it is equally applicable to an existing and ongoing business. 
     An employee stock ownership plan (shown at box  14 ) is formed and operated in accordance with the ERISA. The employee stock ownership plan of the present invention has a number of particular attributes. The employee stock ownership plan is formed as a nominal employee stock ownership plan; that is, the initial commercial entity equity holding by the employee stock ownership plan is small (as an example, five percent (5%)). The employee stock ownership plan invests by acquiring stock (or other equity) of the commercial entity. The employee stock ownership plan is incrementally funded by the contribution of all legally allowable pre-tax and post-tax profits and percentage of payroll contributions of the commercial entity (shown by arrow  26 ). Over a predetermined period of time (as fully described below in pseudo-code and referred to as TIME 2 ), the employee stock ownership plan will purchase from the investor entity all shares of the commercial entity released from the commodity trust as earned. Arrows  13  and  15  represent the incremental purchase of equity (such as stock) by the employee stock ownership plan and the payment for that equity by the employee stock ownership plan. 
     The commodity trust (shown at box  16 ) has a number of characteristics. The trust will hold assets (shown by arrow  19 ) for an investor entity (shown at box  17 ). This investor entity may be an individual, a partnership, a corporation or any combination thereof. The assets or investments held will include cash or other reserves sufficient to provide funds to cover a predetermined percentage (100%-COMPCT) of the predetermined cost of the commodity requirements of the commercial entity for predetermined periods of time (TIME 1  and TIME 3 ). 
     Additionally, the commodity trust will be granted and hold in trust a substantial equity interest in the commercial entity. 
     The commodity trust will agree to defray a predetermined percentage (100%-COMPCT) of the commodity requirement costs of the commercial entity for a predetermined period of time and may have the actual commodities transferred directly to the commercial entity on a transaction by transaction basis. 
     The commercial entity periodically places orders with the commodity trust and concurrently remits the required payment for the COMPCT percentage of the purchase price to the commodity trust (shown by arrow  28 ). The commodity trust then supplements the payment by the commercial entity. This supplement is the predetermined amount necessary to make payment in full to the commodity suppliers). Delivery of the commodity may flow either directly to the commercial entity or through the commodity trust. 
     As seen in FIG. 1, the commodity trust purchases the ongoing commodity requirements (shown by arrow  18 ) from commodity suppliers) (shown at box  20 ) and agrees to pay the full negotiated cost for the commodity (shown by arrow  22 ). The full negotiated cost is the price negotiated between the commodity suppliers) and the commodity trust on behalf of the commercial entity. The commodity is thereafter transferred to the commercial entity (shown by arrow  24 ). 
     The commodity trust will undertake and agree in advance to release from trust the commercial entity equity to the investor entity (shown by arrow  23 ) on a prorata basis as earned. This earned equity is defined as VALU (n) (set forth in detail below). The employee stock ownership plan then exercises the binding call on and purchases the commercial entity equity (shown by arrow  13 ) from the investor entity at a price determined each purchase period, subject to independent outside valuation and fairness opinions, or if Publicly traded for the then publicly traded price of the commercial entity equity. 
     The investor entity agrees in advance to sell, over a period of time defined as TIME 2  (set forth below), all of the commercial entity equity released from the trust and earned by the investor entity, pursuant to a binding call on that equity by the employee stock ownership plan. After this period of time, or when all assets in the trust are exhausted, the useful life of the trust will cease and the system of the invention is terminated. 
     Prior to implementation of the steps of the invention, several variables must be defined. 
     TIME 1  is the time period from the inception of the mechanism,” of the invention until the first scheduled purchase of equity by the employee stock ownership plan from the investor entity. In the example herein, a time frame of forty-eight (48) months is used. 
     TIME 2  is the time period during which the employee stock ownership plan will make purchases of the commercial entity equity from the investor entity. This time period is variable and is dependent upon the mutually determined objectives of the four (4) participating entities. In the example, a time period of seven (7) years is used. 
     TIME 3  are the incremental periods beginning after TIME 1  and ending at the termination of the commodity trust. The example uses seven (7) incremental periods of one (1) year each. 
     The Performance Review Period is the evaluation period used to determine if all of the entities involved in the implementation of the invention are meeting their performance criteria. The performance review period may be weekly, monthly, quarterly, etc., and may vary depending upon the specific nature of the implementation. For purposes of the example, the performance review period is monthly. 
     STKCT is the percentage of equity (as a percentage of the total number of authorized shares) of the commercial entity placed in the commodity trust by the commercial entity at the inception of the trust. STKCT will be of sufficient value to project an attractive rate of retum for the investor entity. The example utilizes a forty-nine percent (49%) interest in the commercial entity equity. 
     COMPCT is the percentage of the cost of the commodities paid by the commercial entity. COMPCT is computed to maximize the rate of return for the investor entity, as well as to benefit the commercial entity by substantially reducing the commodity cost for the life of the mechanism. 
     The value (100%-COMPCT) is the balance of the cost of the commodities acquired and funded by the commodity trust on behalf of the commercial entity. 
     STK(N) is the predetermined percentage of the total equity of the commercial entity to be purchased from the investor entity by the employee stock ownership plan each purchase period. STK(N) may vary from purchase period to purchase period as determined and specified at the onset of the implementation of the invention. In the example, STK(L) through STK( 4 ) equals twelve and eighty-eight one hundredths percent (12.88%), and each of STK( 5 ) through STK(II) equal five and sixteen one hundredths percent (5.16%). 
     VALU(N) is the value of that percentage of the equity of the commercial entity released from the commodity trust to the investor entity during a performance period. This value is determined by the following equation: 
     
       
         VALU(N)=(CASH( n )/BASE)*(* STK ( n )) 
       
     
     where: 
     n=TIME 1  or TIME 3  (as applicable) 
     CASH(N)=Amount of liquid assets (cash) spent by the commodity trust on behalf of the commercial entity for purchase of commodities during the performance review period. 
     BASE=Amount of liquid assets (cash) invested in the commodity trust by the investor entity for TIME 1  or TIME 3  as applicable. 
     STK(N) is defined earlier. 
     FIGS. 2 a  and  2   b  illustrate a simplified schematic flow diagram of one embodiment of the mechanism of the invention (i.e., logic for computer-implemented data manipulation). 
     Initially, the entities (previously described in FIG. 1) will be created with the provisions and restrictions as set forth above (represented by box titled “Start”  40  in FIG. 2 a ). 
     Financial forecasting or modeling is required to define the variables as set forth above. A nominal amount of the equity interest (such as stock) of the commercial entity is issued to the employee stock ownership plan. The commercial entity agrees and undertakes to secure all of its commodity requirements exclusively from the commodity trust, as its sole provider of these commodities, for the life of the mechanism of the invention. 
     Steps of the mechanism will be repeated at periodic time intervals referred to as System Cycles. At the beginning of each system cycle and during each performance review period, an analysis will be made to see if the commercial entity is meeting its performance criteria (shown at box  42 ). If the commercial entity is not meeting the performance criteria and the investor equity trust principal is not at risk (shown at box  43 ), a grace period is granted equal to one performance period (shown at box  45 ). If the performance criteria is not being met and the investor entity trust principal is at risk, the trust may cease at the election of the investor entity (shown at box  56 ). 
     The commercial entity requests commodities for one performance review period and the commodity trust buys commodities for one performance review period (shown at box  44 ). The commodity trust will purchase all of the commodities necessary for the commercial entity to perform operations for the performance review period. 
     The commercial entity concurrently demands the commodity trust to pay a percentage (100%-COMPCT) of the negotiated cost of the commodities. 
     The commercial entity will remit to the commodity trust its share (COMPCT) of the negotiated commodity cost (shown at box  48 ). The commodity or commodities are thereafter transferred to the commercial entity (shown at box  50 ). The commercial entity will then generate revenues utilizing the referenced commodities (shown at box  52 ). 
     For the mechanism of the present invention to continue, the trust must hold sufficient equity of the commercial entity as illustrated (shown at box  54 ). 
     If the trust has released all commercial entity equity to the investor entity, the trust will cease to operate and any remaining assets held by the trust will be distributed to the grantors pursuant to the trust agreement (shown at box  56 ). 
     The commercial entity may then continue operations in traditional fashion without the commodity trust and without the mechanism of the present invention (shown at box  57 ). It will thus be seen that if the present invention ceases to function in its intended manner, the commercial entity will continue to operate. 
     If there are any pre-tax profits (shown at box  70 ), pursuant to law the maximum allowable pre-tax profits of the commercial entity are contributed to the employee stock ownership plan (shown at box  72 ). If there are no pre-tax profits, the intervening steps are bypassed (shown by arrow  71 ). 
     Taxes due are to be paid by the commercial entity as illustrated on FIG. 2 b  (shown at box  74 ). The commercial entity then contributes all post-tax profits (PTPPCT) to the employee stock ownership plan (shown at box  78 ). The employee stock ownership plan will use these funds to purchase stock from the investor entity. 
     A prorata percentage of the commercial entity equity held by the commodity trust is released to the investor entity as earned. This percentage is defined as STK(N) (shown at box  80 ). 
     If it is prior to the end of TIME 1  (shown at box  82 ), the process begins again (shown by arrow  83 ). From the end of TIME 1  through TIME 2 , the following steps are taken and procedures are followed during each TIME 3  period. The price to be paid for the commercial entity equity is determined at the end of TIME 1  and periodically on a transaction by transaction basis during TIME 3 . This price may be the publicly traded price of the equity or may be computed on a multiple of earnings basis, subject to independent outside valuation and fairness opinions as required by law (shown at box  84 ). 
     The employee stock ownership plan then exercises the binding call on, and purchases all earned commercial entity equity released from the trust, from the investor entity (shown at box  86 ). 
     The above series of action steps form an integrated relationship for the four (4) parties. The result is that each party must meet certain performance criteria for the total process to function. These criteria are: 
     the commodity trust must pay its predetermined share of the commodity costs it acquires on behalf of the commercial entity; 
     the employee stock ownership plan must exercise its binding calls and purchase all earned and released commercial entity equity from the investor entity; 
     the investor entity must sell all commercial entity equity earned and released from the commodity trust, to the employee stock ownership plan pursuant to all binding calls on such stock by the employee stock ownership plan; and 
     the commercial entity must meet performance criteria and contribute its pre-tax and post-tax profits and percentage of payroll contributions to the employee stock ownership plan. 
     With more particular regard to the computer is a diagram of the interrelated computer systems and communications of the present invention, consider FIG.  3 . FIG. 3 shows a generic case of a computer system for the plurality of entities including the commercial entity, which can communicate with the computer systems of other related institutions. There is a local digital electrical computer system  1  (e.g., an IBM-compatible PC), controlled by a processor  2  (e.g., a Pentium processor). Processor  2  is programmed by program  3 , which forms circuitry in the processor—i.e., programs the processor  2 . Local computer system  1  also includes a display device such as a monitor  5  (e.g., a Trinatron monitor) and an input device, such as a keyboard (e.g., a Dell QuietKey keyboard). The keyboard is for receiving input information and converting the information into electrical signals, and the monitor  5  is for displaying output electrical signals. The local computer system  1  also includes a memory  6 , such as a 50 megabyte hard drive, along with disk drives for floppy and optical discs for selectively retrieving or, where appropriate, storing the program  3  and data structures produced in operation of the invention. The local computer system  1  additionally includes a printing device  7 , such as a Hewlet Packard Laser Jet  6 P for converting output signals into printed documents. A modem  8 , such as a Hayes modem, is used to facilitate communication between local computer system  1  and an other computer systems  9   a  or  9   b . For example, viewing the local computer system  1  as being for the commercial entity, the first other computer system  9   a  can represent a computer system for the commodity supplier(s)  20  and second other computer system  9   b  can represent a computer system for a financial institution, bank, lender, insurance provider, or the like. 
     Of particular importance in the communication of the interrelated computer systems of the present invention are the data gathering\exchange functions between the systems, as well as electronic funds transfers from the financial institution computer (internally) to the commodity trust account, and then from the commodity trust account to the commercial entity purchasing account, and then either internally or externally from the commercial entity purchasing account to the account of the commodity supplier(s). 
     Turning now to FIG. 4, there is shown a more focused diagram of the commercial entity local computer system  1  in accordance with the present invention. Boxes  102  through  124  provide a general overview of how to use the computer system  1  and the flow of information and data, particularly from the vantage point of the commercial entity  12 . 
     Employee payroll information  102 , financial information  104 , and commodity purchase information  106 , each of which is discussed subsequently herein, is input and converted into electrical signals conveyed to the local computer system  1  at block  108 . At block  112 , the computer program  3  is engaged to program processor  2  to manipulate and transform the input digital electrical signals to produce output digital electrical signals. The manipulating and transforming can include carrying out a payroll analysis at block  110 , a commodity purchase analysis at block  114 , and a commercial entity profit and loss analysis at block  116 . Any of the foregoing analyses, as well as the input data, can be displayed at the monitor  4 , stored in the memory  6 , printed at printer  7 , and/or communicated by modem  8 —either before or after being handled in commodity trust &amp; ESOP reporting block  118  (which is directed to generating documentation utilizing any of the foregoing). 
     FIGS. 5A-5C are more detailed flow charts for illustrating the present invention. Block  126  Information relating to the purchase of the commodity is to represent input into the computer. This information can include such data as the vendor, date, price and quantity of the commodity, terms of payment, etc. Block  128  is for Information relating to the commercial entity&#39;s employee payroll, which is input into the computer. This information can include such data as the employees name, social security number, and other personal details, position, hours worked, compensation rate, total compensation, etc. In Block  130 , information relating to the commercial entity&#39;s financial operations is input into the computer. This information can include revenue, expenses, cash receipts and disbursements, changes in ownership and other memo entries, etc. In Block  132  data relating to the purchase of the commodity, is retrieved from the computer. The pertinent data is the quantity and price of commodity purchased. Block  134  illustrates that the total cost of the commodity is computed. Price multiplied by, quantity equals total commodity cost. In Block  136 , the amount and price of the stock of the commercial entity to be purchased by the commodity trust is computed. The amount of the capital contribution is equal to a predetermined percentage of the total amount of the commodity purchases. Next, in Block  138 , document-generation is illustrated by a report summarizing the purchase of the commodity and request for the capital contribution is prepared. In Block  140 , the commodity purchase report and capital request prepared in Block  138  is sent to the commodity trust. Block  142  represents that the receipt of the capital contribution from the commodity trust is recorded to memory. In Block  144 , the commercial entity&#39;s ownership register is updated to reflect the capital contribution made by the commodity trust. In Block  146 , data relating to the commercial entity&#39;s employee payroll is retrieved from the computer. The pertinent data is the amount of time worked and the remuneration. Block  148  shows that the total cost of the commercial entity&#39;s payroll is computed. Time worked multiplied by remuneration equals total payroll cost. In Block  126 , information relating to the purchase of the commodity is input into the computer. This information can include such data as the vendor, date, price and quantity of the commodity, terms of payment, etc. This can be in conjunction with, or independently of, the commercial entity&#39;s general accounting software. Block  128  represents that information relating to the commercial entity&#39;s employee payroll is input into the computer. This information can include such data as the employees name, social security number and other personal details, position, hours worked, compensation rate, total compensation, etc. Preferably this information is obtained automatically from the commercial entity&#39;s general accounting software. In Block  130 , information relating to the commercial entity&#39;s financial operations is input into the computer. This information can include revenue, expenses, cash receipts and disbursements, changes in ownership and other memo entries, etc. Block  132  shows that the data relating to the purchase of the commodity is retrieved from the computer. The pertinent data is the quantity and price of commodity purchased. In Block  134 , the total cost of the commodity is computed. Price times quantity equals total cost. Next, in Block  136 , the amount and price of the stock of the commercial entity to be purchased by the commodity trust is computed. The amount of the capital contribution is equal to a predetermined percentage of the total amount of the commodity purchases. Next, Block  138  represents further document-generation with a report summarizing the purchase of the commodity, and preparation for a request for the capital contribution. In Block  140 , the commodity purchase report and capital request prepared in Block  138  is sent to the commodity trust. Block  150  illustrates that the total amount of the commercial entity&#39;s contribution to the ESOP is computed. Payroll cost multiplied by contribution percentage equals contribution. In Block  152 , the commercial entity&#39;s distribution of funds to the ESOP is recorded to memory. Next, Block  154  shows the commercial entity distribution of funds is sent to the ESOP. In Block  156 , data relating to the commercial entity&#39;s income statement is retrieved from the computer. The pertinent data is the amounts of revenue and expenses. Block  158  illustrates that the commercial entity&#39;s pre-tax profit is computed. In Block  160 , the amount of the commercial pre-tax contribution to the ESOP is computed. Then, in Block  162 , the commercial entity&#39;s distribution of pre-tax funds to the ESOP is recorded to memory. Next, Block  164  represents that the commercial entity&#39;s distribution of pre-tax funds is sent to the ESOP, preferably by electronic communication over a network, which can include a secure communication over a network gateway. In Block  166 , the commercial entity&#39;s after-tax profit is computed. Next, in Block  168 , the amount of the commercial entity&#39;s after-tax contribution to the ESOP is computed. Block  170  shows that the commercial entity&#39;s distribution of after-tax funds to the ESOP is recorded to memory, and Block  172  shows the commercial entity&#39;s distribution of after-tax funds is sent to the ESOP by the network discussed above. In Block  174 , an entry is made to the commercial entity&#39;s books and records reflecting the sale of a percentage of the original ownership to the ESOP. This is a memo entry to the commercial entity&#39;s ownership register for no financial transaction with the commercial entity is involved. 
     Preferably, the commercial entity  12  computer system can handle the following operations, especially in cooperation with other entity computer system  9   a  and other institution computer  9   b , each of which handle the corresponding data processing necessary to effectuate the complete transaction, along with computing for its own local needs:, 
     1. Capitalize commodity trust and fund trust bank account. 
     2. Capitalize commercial entity and commercial entity operating bank accounts. 
     3 Establish ESOP and ESOP bank account. 
     4. Implement general accounting system. 
     5. Calculate total commodity purchases for X period of time. 
     6. Transfer an amount equal to X % of total commodity purchases from commodity trust bank account to commercial entity operating bank account. 
     7. Calculate total employee payroll for X period of time. 
     8. Transfer an amount equal to X % of total employee payroll from commercial entity operating bank account to ESOP bank account. 
     9. Calculate commercial entity profit for the year. 
     10. Transfer an amount equal to X % of commercial entity profit from the commercial entity operating account to ESOP bank account. 
     11. In year four and every year thereafter, sell X % of the commercial entity stock to the ESOP. 
     Even more particularly, the computer operations can be represented by Excel spreadsheet formulas provided in the following specimens (represented for an airline as a sample commercial entity  12 , as discussed further below). 
     
       
         
               
             
               
               
             
               
               
               
             
           
               
                   
               
               
                 Specimen 1 
               
               
                 Projected Balance Sheet 
               
             
          
           
               
                   
                 PROJECTED BALANCE SHEET 
               
               
                   
                 X% GROWTH X% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 In $ 000 
                 YEAR X 
               
               
                   
                   
               
               
                   
                 Assets 
                   
               
               
                   
                 Cash = 
                 IF(′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!D$57 &lt; 0.0. 
               
               
                   
                   
                 ′PROJECTED INCOME AND CASH 
               
               
                   
                   
                 FLOW′!D$57) 
               
               
                   
                 Accounts Receivable = 
                 − SUM(′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$43) 
               
               
                   
                 Stock Loans Receivable = 
                 + PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D48 − 
               
               
                   
                   
                 SUM(′PROJECTED !INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$50.D$50) 
               
               
                   
                 Deposits &amp; Other Assets = 
                 − ′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$51 
               
               
                   
                 Fixed Assets = 
                 − ′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′$D$52 
               
               
                   
                 Depreciation &amp; 
                 − ′PROJECTED INCOME AND 
               
               
                   
                 Amortization = 
                 CASH FLOW′!$D53 
               
               
                   
                 Total Assets = 
                 ′SUM(B7:B12) 
               
               
                   
                 Liabilities &amp; Equity 
               
               
                   
                 Accounts Payable = 
                 + ′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$54 
               
               
                   
                 Loans Payable = 
                 SUM(′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$44:D$44) + 
               
               
                   
                   
                 SUM(′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$45.D$45) 
               
               
                   
                 Capital = 
                 SUM(′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$46:$D$48) 
               
               
                   
                 Retained Earnings = 
                 SUM(′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$42:D$42) + 
               
               
                   
                   
                 ′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!D$55 
               
               
                   
                 Total Liabilities &amp; Equity = 
                 SUM(B16:B19) 
               
               
                   
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
             
               
               
               
             
           
               
                   
               
               
                 Specimen 2 
               
               
                 Projected Fuel Savings Sheet 
               
             
          
           
               
                   
                 PROJECTED FUEL SAVINGS 
               
               
                   
                 X% GROWTH X% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 In $ 000 
                 YEAR X 
               
               
                   
                   
               
               
                   
                 Gallons (000) 
                   
               
               
                   
                 Boeing 737 = 
                 + ′[TUL_3x.|s] 
               
               
                   
                   
                 CASH FLOW AND INCOME 
               
               
                   
                   
                 STATEMENT′IB26 
               
               
                   
                 Total = 
                 SUM(C8:C9) 
               
               
                   
                 Price Per Gallon = 
                 + ′[TUL_3.x|s] 
               
               
                   
                   
                 EXPENSES FORECAST′|$CF$43 − C13 
               
               
                   
                 Handling Cost 
                 0.03 
               
               
                   
                 Total = 
                 SUM(C12:C13) 
               
               
                   
                 Fuel Purchases = 
                 + ′[TUL_3.x|s] 
               
               
                   
                   
                 CASH FLOW AND INCOME 
               
               
                   
                   
                 STATEMENT′IB50 
               
               
                   
                 Fuel by Component 
               
               
                   
                 Fuel Cost = 
                 + C18/C14*C12 
               
               
                   
                 Handling Cost = 
                 + C18/C14*C13 
               
               
                   
                 Total = 
                 SUM(C21:C22) 
               
               
                   
                 Savings by Year = 
                 C21/2 
               
               
                   
                 Cumulative Savings = 
                 SUM(C26) 
               
               
                   
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
             
               
               
               
               
             
           
               
                   
               
               
                 Specimen 3 
               
               
                 Fuel Trust for Participation for Stock 
               
             
          
           
               
                   
                 FUEL TRUST PARTICIPATION FOR STOCK 
               
               
                   
                 X% GROWTH X% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 In $ 000 
                   
                 YEAR X 
               
               
                   
                   
               
               
                   
                 ESOP 
                 + ′ESOP STOCK 
                 + ′ESOP STOCK 
               
               
                   
                 Purchases @ = 
                 PURCHASES′|$C$9 = 
                 PURCHASES′|$E$9 
               
               
                   
                 Fuel for 
                   
                 + ′PROJECTED FUEL 
               
               
                   
                 Stock @ 50% = 
                   
                 SAVINGS′|$F$28 
               
               
                   
                 Profit on Stock = 
                   
                 + C8 − C10 
               
               
                   
                   
               
             
          
         
       
     
     
       
         
               
             
               
             
               
               
             
               
               
               
               
             
           
               
                   
               
               
                 Specimen 4 
               
               
                 ESOP Purchase Schedule 
               
             
          
           
               
                 ESOP PURCHASE SCHEDULE 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 YEAR X 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 25% 
               
               
                 In $ 000 
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust 
                 25% = 
                 + C9*D14 = 
                 + D14*E6*(C9/ 
               
               
                 Investors 
                   
                   
                 SUM(C9:C12)) 
               
               
                 Equity 
                 10% = 
                 + C10*D14 = 
                 + D14*E6*(C10/ 
               
               
                 Investors 
                   
                   
                 SUM(C9:C12)) 
               
               
                 Airline 
                 1 − C13 − 
                 + C11*D14 = 
                 + D14*E6*(C11/ 
               
               
                 Investors = 
                 C12 − C10 − 
                   
                 SUM(C9:C12)) 
               
               
                   
                 C9 = 
               
               
                 ESOP 
                 5% = 
                 + C12*D14 = 
                 + D14*E6*(C12/ 
               
               
                 Education 
                   
                   
                 SUM(C9:C12)) 
               
               
                 ESOP 
                 5% = 
                 + C13*C14 
                 0 
               
               
                 Total = 
                 SUM- 
                 ROUND(′PROJECTED 
                 SUM(E9:E13) 
               
               
                   
                 (C9:C13) = 
                 INCOME AND 
               
               
                   
                   
                 CASH FLOW′! 
               
               
                   
                   
                 $G$35*$T$1, −2 = 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
             
               
               
               
             
           
               
                   
               
               
                 Specimen 5 
               
               
                 Projected ESOP Income and Cash Flow Statement 
               
             
          
           
               
                   
                 PROJECTED ESOP INCOME &amp; CASH FLOW STATEMENT 
               
               
                   
                 X% GROWTH X% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 In $ 000 
                 YEAR X 
               
               
                   
                   
               
               
                   
                 Beginning Cash Balance 
                   
               
               
                   
                 Sources of Funds 
               
               
                   
                 Corporate 
                 − ′PROJECTED INCOME AND 
               
               
                   
                 Payroll 
                 CASH FLOW′!D37 
               
               
                   
                 Contributions = 
               
               
                   
                 Interest Reimbursement = 
                 − ′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!D38 
               
               
                   
                 Stockholder Stock Loans = 
                 IF(− (+ D7 + D10 + 
               
               
                   
                   
                 D11 + D13 + D14 + 
               
               
                   
                   
                 D15 − D19 − D20 − 
               
               
                   
                   
                 D24 − D26) &gt; = 0. − 
               
               
                   
                   
                 (+ D7 + D10 + D11 + 
               
               
                   
                   
                 D13 + D14 + D15 − D19 − 
               
               
                   
                   
                 D20 − D2 
               
               
                   
                 Pre - Tax Dividend Income = 
                 − ′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!D39 
               
               
                   
                 After Tax Dividend Income = 
                 − ′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!$D$55 
               
               
                   
                 Total Sources of Funds = 
                 SUM(D10:D15) 
               
               
                   
                 Uses of Funds 
               
               
                   
                 Stock Purchases 
               
               
                   
                 Administration @ 2% = 
                 (+ D10 + D11)*$B20 
               
               
                   
                 Initial Stock Purchase = 
                 + ′PROJECTED INCOME AND 
               
               
                   
                   
                 CASH FLOW′!D50 
               
               
                   
                 Interest On Initial 
                 + ′PROJECTED INCOME AND 
               
               
                   
                 Stock Purchase = 
                 CASH FLOW′!D33 
               
               
                   
                 Loan Repayment 
               
               
                   
                 Over 10 Years 
               
               
                   
                 Stockholder Stock Loans 
               
               
                   
                 Interest Expense @ 6% 
               
               
                   
                 Stockholder Stock Loans 
               
               
                   
                 Total Uses of Funds = 
                 SUM(D19:D26) 
               
               
                   
                 Ending Cash Balance = 
                 + D7 + D16 − D27 
               
               
                   
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
             
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 6 
               
               
                 Projected Fuel Trust Rate of Return 
               
               
                 PROJECTED FUEL TRUST RATE OF RETURN 
               
               
                 X% GROWTH X% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 Stock 
                 eginning 
                 Less: 
               
               
                 In $ 000 
                 Share 
                 Balance 
                 Fuel Cost 
               
               
                   
               
               
                 Beginning of Trust 
                 25% 
                 = + ′PROJECTED FUEL SAVINGS$F$28 
                   
               
               
                 Year X 
                   
                 = + G7 = C21/2 
                 = + (C8 −(D8 − 0.5))$E$5 
               
               
                 Year 2 
                   
                 = + G8 = + PROJECTED FUEL SAVINGS$D26 
                 = + (C9 − (D9 − 0.5))$E$5 
               
               
                 Year 3 
                   
                 = + G9 = + PROJECTED FUEL SAVINGS$E26 
                 = + (C10 − (D10 − 0.5))$E$5 
               
               
                 Year 4 
                   
                 = + G10 = + PROJECTED FUEL SAVINGS$F26 
                 = + (C11 − (D11 − 0.5))$E$5 
               
               
                 Year 5 
                   
                 = + G11 = + PROJECTED FUEL SAVINGS$G26 
                 = + (C12 − (D12 − 0.5))$E$5 
               
               
                 Year 6 
                   
                 = + G12 = + PROJECTED FUEL SAVINGS$H26 
                 = + (C13 − (D13 − 0.5))$E$5 
               
               
                 Year 7 
                   
                 = + G13 = + PROJECTED FUEL SAVINGS$I26 
                 = + (C14 − (D14 − 0.5))$E$5 
               
               
                 Year 8 
                   
                 = + G14 = + PROJECTED FUEL SAVINGS$J26 
                 = + (C15 − (D15 − 0.5))$E$5 
               
               
                 Year 9 
                   
                 = + G15 = + PROJECTED FUEL SAVINGS$K26 
                 = + (C16 − (D16 − 0.5))$E$5 
               
               
                 Year 10 
                   
                 = + G16 = + PROJECTED FUEL SAVINGS$L26 
                 = + (C17 − (D17 − 0.5))$E$5 
               
               
                 Year 11 
                   
                 = + G17 = + PROJECTED FUEL SAVINGS$M26 
                 = + (C18 − (D18 − 0.5))$E$5 
               
               
                 Net to Trust 
                   
                 = + SUM(D8:D18) 
                 = SUM(E8:E18) 
               
               
                   
               
             
          
           
               
                   
                 Add: Int @ 
                 Add: Stock 
                 Ending 
               
               
                 In $ 000 
                 6.00% 
                 Purchases 
                 Balance 
               
               
                   
               
               
                 Beginning of Trust 
                   
                 = + C7 − D7 + E7 + F7 
                 = −C7 
               
               
                 Year X 
                   
                 = +C8 − D8 + E8 + F8 
                 = +E8 + F8 
               
               
                 Year 2 
                   
                 = +C9 − D9 + E9 + F9 
                 = +E9 + F9 
               
               
                 Year 3 
                   
                 = +C10 − D10 + E10 + F10 
                 = +E10 + F10 
               
               
                 Year 4 
                 = + ′RETURN ON FUEL PARTICIPATION$C$8 
                 = +C11 − D11 + E11 + F11 
                 = +E11 + F11 
               
               
                 Year 5 
                 = + ′RETURN ON FUEL PARTICIPATION$D$8 
                 = +C12 − D12 + E12 + F12 
                 = +D12 + E12 + F12 
               
               
                 Year 6 
                 = + ′RETURN ON FUEL PARTICIPATION$E$8 
                 = +C13 − D13 + E13 + F13 
                 = +D13 + E13 + F13 
               
               
                 Year 7 
                 = + ′RETURN ON FUEL PARTICIPATION$F$8 
                 = +C14 − D14 + E14 + F14 
                 = +D14 + E14 + F14 
               
               
                 Year 8 
                 = + ′RETURN ON FUEL PARTICIPATION$G$8 
                 = +C15 − D15 + E15 + F15 
                 = +D15 + E15 + F15 
               
               
                 Year 9 
                 = + ′RETURN ON FUEL PARTICIPATION$H$8 
                 = +C16 − D16 + E16 + F16 
                 = +D16 + E16 + F16 
               
               
                 Year 10 
                 = + ′RETURN ON FUEL PARTICIPATION$I$8 
                 = +C17 − D17 + E17 + F17 
                 = +D17 + E17 + F17 
               
               
                 Year 11 
                 = + ′RETURN ON FUEL PARTICIPATION$J$8 
                 = +C18 − D18 + E18 + F18 
                 = +D18 + E18 + F18 
               
               
                 Net to Trust 
                 = SUM(F8:F18) 
                 = C20 − D20 + E20 + F20 
                 = SUM(H8:H18) 
               
               
                 Internal Rate of Return 
                   
                 = IRR(H7:H18, 0.1) 
                 = IRR(H7:H18, 0.1) 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
             
               
               
             
           
               
                   
               
               
                 Specimen 7 
               
               
                 Projected Income &amp; Cash Flow Statement 
               
             
          
           
               
                 PROJECTED INCOME &amp; CASH FLOW STATEMENT 
               
               
                 X% GROWTH X% FUEL PARTICIPATION 
               
             
          
           
               
                 In $ 000 
                 YEAR X 
               
               
                   
               
               
                 Revenue 
                   
               
               
                 Passenger = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B40 
               
               
                 Cargo = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B41 
               
               
                 Other = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B43 
               
               
                 Total Revenue = 
                 SUM[D7:D9] 
               
               
                 Expenses 
               
               
                 Payroll = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B47 
               
               
                 Benefits &amp; Taxes = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B48 
               
               
                 Flight Operations = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B49 
               
               
                 Fuel = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B50 
               
               
                 Maintenance = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B51 
               
               
                 Aircraft Rental = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B52 
               
               
                 Inflight = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B53 
               
               
                 Customer Service = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B54 
               
               
                 Reservations = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B55 
               
               
                 Marketing = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B56 
               
               
                 Administration = 
                 + ′[TUL_3.x|s]CASH FLOW 
               
               
                   
                 AND INCOME STATEMENT′!B57 
               
               
                 Total Expenses = 
                 SUM[D12:D22] 
               
               
                 Operating Profit = 
                 + D10 · D23 
               
               
                 Less: Expenses 
               
               
                 paid by others 
               
               
                 Fuel Trust Contribution = 
                 + ′PROJECTED FUEL SAVINGS′!$C$26 
               
               
                 State Quality 
                 + $C$27*D12 
               
               
                 Jobs Credit 5.00% = 
               
               
                 State Jobs 
               
               
                 Training Program = 
                 + ′[TUL_3.x|s]EXPENSES 
               
               
                   
                 FORECAST′!$BU$166 
               
               
                 Net Operating Profit = 
                 SUM[D24:D28] 
               
               
                 B &amp; I Loan Interest 
                 AE249 
               
               
                 Expense @ 9.5% = 
               
               
                 Pre-Start Expenditures 
                 − ′[TUL_3.x|s]PRE-START 
               
               
                 [Net] = 
                 EXPENSES′!$H$142 
               
               
                   
                 + ′[TUL_3.x|s]PRE-START 
               
               
                   
                 EXPENSES′!$H$147 
               
               
                 Depreciation/ 
                 SUM[D52]*0.1429 
               
               
                 Amortization = 
               
               
                 ESOP Loan Interest 
                 + D48*C33 
               
               
                 Income @ 6.0% = 
               
               
                 Pre-Contribution 
                 SUM[D29:D34] 
               
               
                 Earnings = 
               
               
                 Fuel Trust Contribution = 
                 − ′PROJECTED FUEL SAVINGS′!$C$26 
               
               
                 ESOP P/R 
                 − [D12*$C37] 
               
               
                 Contribution 25.0% = 
               
               
                 ESOP Interest 
                 − ′ESOP CASH FLOW STATEMENT′!D$22 
               
               
                 Deduction = 
               
               
                 ESOP Principal 
                 − ′ESOP CASH FLOW STATEMENT′!D$21 
               
               
                 Deduction = 
               
               
                 Taxable Income = 
                 SUM[D35:D39] 
               
               
                 Income 
                 IF[SUM[$D40:D40 ] &gt; 0. · SUM[$D40:D40] 
               
               
                 Taxes @ 38.0% = 
                 *$C41 · SUM[C41:$D41].0] 
               
               
                 Net After Tax Income = 
                 + D40 + D41 
               
               
                 Accounts Receivable = 
                 [− D10/12/2] 
               
               
                 Fuel Trust Contribution = 
                 + ′PROJECTED FUEL 
               
               
                   
                 SAVINGS′!$C$26 
               
               
                   
               
             
          
         
       
     
     EXAMPLE 
     To generally illustrate the present invention, consider a start-up airline as an example. (Of course, the present invention is not limited to any particular economic sector, but an airline provides a suitable example of a commercial entity in its institutional and commercial environment, with all the attendant computer operations.) For the purposes of this disclosure, consider a hypothetical “New Air” airline. A specific example of implementation of this invention follows: 
     Assume that New Air is headquarterd in Tulsa, Okla., and will introduce scheduled, daily, nonstop air travel service between Tulsa and Oklahoma City to the East and West Coasts, as well as to Las Vegas and New Orleans. New Air&#39;s scheduled passenger service operation will match the lowest available fare of any scheduled airline to all of New Air&#39;s destinations. 
     New Air will add a market city every other month for the first five months, with three flights per day to and from each of the initial three cities, with the flights averaging 3 ½ hours in length. This will make possible out-and-back travel on the same day from Oklahoma to the East and West Coast markets. In the seventh month of commercial service, New Air will add two daily flights to San Francisco and one daily flight to Las Vegas. Scheduled service to New Orleans will be folded in with the first cities served, as early as possible. 
     Scheduled route service out of Tulsa and Oklahoma City to New Orleans Lakefront Airport with a 15-minute turn (stop) will be added, with continuing service to another 15-minute turn (stop) in Jackson, Miss. and then on nonstop, to Washington D.C.&#39;s National (now Ronald Reagan) Airport, and back (return flight). 
     New Air will have nine schedule-dedicated, hush-kitted Boeing 737-200 (Advanced) aircraft, with one maintenance spare, for a total of ten aircraft. 
     To take advantage of the many cost savings afforded an established air carrier, including millions in potential insurance savings, and to avoid other costs and delays associated with the certification of a new carrier, New Air will purchase a first local airline (Local Express), along with its Federal Aviation Administration Part 121 certificate and Department of Transportation Part 401 certificate, which grant unrestricted scheduled and charter authority to carry persons, property, and mail for interstate and overseas operations covering all of the U.S. and possessions, as well as operations anywhere in the world. Additionally, Local Express holds supplemental certificates and authorities from the U.S. and host countries covering operations to Canada, Mexico, and the Caribbean. 
     The purchase of Local Express includes all issued and outstanding stock of the corporation, free and clear of all liabilities, and interests. Local Express has established a ten-year history of safe operations. Presently Local Express has two older 737 aircraft, all ground and support equipment, a complete spare parts inventory, employs just under 100 people, and enjoys an excellent relationship with the Federal Aviation Administration. Local Express, following a name change, will be the vehicle through which New Air will operate its scheduled passenger service, as well as the two charter subsidiaries, Local Express and Second Local Express. New Air will ultimately utilize a fleet of used, late-model, very low-time, Boeing 737-200 (Advanced) aircraft, the existing Local Express certificates and authorities, and the existing Local Express Op Specs, expanded to include additional destinations in the Eastern United States. 
     The Local Express Op Specs include 124 cities (primarily in the western two-thirds of the U.S.) to which Local Express routinely operates on a scheduled basis. This is a greater number of U.S. cities than is served by any other scheduled carrier. It would cost well in excess of $10,000, with proving runs and all other required costs, to add a city to a new carrier&#39;s Operation Specifications. The enhancement value to the Local Express operating certificates resulting from the extraordinary number of approved, scheduled cities on the Op Specs is in excess of $1,240,000. 
     In spite of the fact that Local Express is now over ten years old, its average fully burdened labor cost is still only slightly over $35,000 per year, per employee, with only two aircraft supporting the full cost of infrastructure. The average labor cost for a start-up charter carrier like Local Express would be a little over $33,000 today. Local Express has about 49 employees per aircraft, a high number because of infrastructure. Local Express is fully capable of operating five aircraft with slightly fewer than 40 employees per aircraft at the same $35,000 average cost per employee, thereby becoming an even greater model of efficiency, better utilizing infrastructure, facilities, ground and support equipment, as well as an exceptionally complete spare parts inventory. 
     Local Express has been operating 6,200 revenue hours per year for the last five years of its ten-year history. Total operating cost with no debt and everything paid for is $2,600 per block hour. Annual operating profit, at closing, with current contracts going forward is $4.3 million. The seller of Local Express has contracted to pay $3,000 per hour for 275 to 360 block hours per month and $3,200 per block hour for all hours less than 275 per month. All hours over 360 per month are at $3,400 per block hour. The seller will require 420 hours per month for October, November and December. Other customers are paying more than $3,500 per block hour for track charter programs. Ad hoc charters are billed $3,550 to more than $4,500 per hour. All customer revenue is required to be placed in escrow prior to any flight operations by Local Express, as is the industry standard. 
     As a subsidiary of New Air, Local Express will continue to operate just as it always has with its two 737s, earning an operating profit of $4.3 million on approximate $20 million of revenue, until such time as the third aircraft is added. A third aircraft will be added to the Local Express fleet as soon as New Air closes on the above-mentioned purchase. 
     New Air is also in the process of forming a wholly owned subsidiary, a Second Local Express to be operated by New Air conditioned on an exclusivity agreement and minimum revenue guarantees, all charter service for approximately one hundred conventions in New Orleans annually, as well as for Mardi Gras, and other events. 
     Second Local Express will utilize five 737-200s, as they are delivered. These aircraft will service the Mardi Gras, Sugar Bowl, Super Bowl, convention and package tour needs of New Orleans, its Visitors and Convention Bureau, and the Convention Center, bringing passengers from all over the U.S., Mexico and Canada on a track charter program basis. Hourly charter rates will be paid in advance, in escrow, assuring full capacity revenues. These same aircraft will also be utilized as charter aircraft for package tour destinations such as Walt Disney World, Mexico, and the Caribbean. 
     Second Local Express has entered into an arrangement, through a mutual Letter of Intent, with the Orleans Levee District for the exclusive rights to provide scheduled air service utilizing the New Orleans Lakefront Airport, ten minutes from downtown New Orleans. Lakefront Airport is fully staffed, with its own fully equipped independent fire department and sixty-member police force (some members of which carry credentials from the U.S. Customs Service and can clear international flights). 
     The existing Oklahoma market is substantially more than adequate to ensure success with regard to New Air&#39;s scheduled service. In 1996 more than 800 people a day flew from Oklahoma to each coast and that number is even higher now. In the first year of scheduled service operations, New Air will create up to 600 new jobs in Oklahoma, and over 57 new jobs in the out-stations being served. Secondary job creation should provide an additional 200 jobs in Oklahoma as well. In addition, Second Local Express will employ another 185 people in Louisiana. Local Express currently employs 97 people, and will, after ramping up to a total of five aircraft, employ just under 200. 
     The single largest expense of any airline is its labor costs. Due to the start-up nature of New Air, scheduled service labor costs will be approximately half those of the major carriers. New Air&#39;s fully burdened labor cost, including Local Express and Second Local Express, will be less than $35,000 per employee. 
     The second largest single expense of an airline is fuel. With the older airlines, this cost averages approximately 12% to 16% of their total revenue. Were it not for the invention herein, New Air&#39;s fuel cost for its scheduled service operation would be approximately 17%. The reason for this is that, as a start-up, our other major costs, such as labor, aircraft leasing, and catering, are disproportionately low. Licensing and utilizing the present invention in conjunction with an incremental ESOP will reduce the cost of fuel to New Air by 50% over 11 years while creating employee ownership through the ESOP at no cost to our employees. As wholly owned subsidiaries operated by New Air, Local Express and Second Local Express will both enjoy the full financial benefit of the present invention. 
     New Air projects to grow by 20% a year compounded for the next eleven years. New Airs payroll in Oklahoma will exceed $15,000,000 in the first year. Second Local Express charter operations and New Air scheduled service operations combined will generate approximately 200 new jobs in New Orleans with an annual payroll in excess of $7,000,000. Local Express will generate approximately 90 new jobs with additional payroll of approximately $3,104,000. 
     Local Express charter operations will expand from two aircraft and 97 people, to three aircraft and almost 127 immediately upon closing. Local Express will expand further by adding a fourth and fifth aircraft and almost 30 people per aircraft as rapidly as firm; long-term track program charter contracts can be developed to facilitate such expansion. Ultimately, within 18 months, Local Express is planned to have five late model Boeing 737-200 (Advanced) aircraft and just under 200 people. 
     New Air plans to launch this fall with a total capitalization of in excess of $117,875,000 including the full, four year funding for the Fuel Trust. Of this amount, $15,000,000 will be hard equity (cash) in return for 15% of the Company&#39;s common stock. All other shareholders, save and except the Fuel Trust Investor(s), who will acquire 25% of the Company&#39;s common stock, in trust, incrementally, over time, as such fuel and stock purchases are made, in return for indirect payment of half of the fuel bill for 11 years, will subordinate to an annual rate of return for the three ($5 million each) equity investors of thirty percent, as a floor. The Fuel Trust Investor(s) will receive 30 basis points above the appropriate current market price for investment grade paper carrying a rating of either A, M, or AAA (Moody&#39;s and/or S&amp;P), as a floor, and ceiling, until the equity investors exceed their required thirty percent (30%) floor rate of return. In essence, the equity investors would have the equivalent of a preferred stock by virtue of subordination agreements with all other shareholders in lieu of a defined (preferred) class of stock, which would be prohibited in view of the ESOP. An ESOP under law must hold a class of stock equal or superior to any other issued by the Company. 
     New Air, the parent company, is an Oklahoma corporation, formed Jan. 22, 1996, and is authorized to issue 10 million shares of common stock. The members of New Air&#39;s Board of Directors collectively own 403,000 shares or 4.03% of the company and another 898,000 shares or 8.98% is owned by a small group of other accredited investors. All in all, New Air will be owned, pursuant to an offering at par value, by over 250 founding shareholders, the largest of which will own less than 5% of the company. Of the more than 250 future owners of the company, over 100 are millionaires (of which 67 live in Oklahoma). Over $4 million have so far been invested in New Air (Local Express/Second Local Express)&#39;s business plan and operations development. 
     The three $5,000,000 equity investors that acquire 5% each of New Air should be extremely comfortable with their positions. The first priority is to ensure the most rapid return possible, with the least amount of risk, well ahead of any other stockholder, save and except the Fuel Trust Investor. The Fuel Trust Investor will be a pension fund (or funds) that buys equity for enough to pay for half the fuel for 11 years in order to reduce costs and enhance profits, while enjoying a modest investment grade return, as a floor, until the equity investors see a 30% floor rate of return. From then on, both the Fuel Trust investor and the equity investors participate in the upside pro rata and pari pasu. 
     To be safe, one can pragmatically project (even without anticipating) a $10 million loss for the passenger operation the first year of scheduled passenger service during the ramp-up process. Profits from Local Express and Second Local Express will offset this. For that pragmatic reason the first ESOP stock purchase is extended out to the 48th month of operations. This also allows compliance with the IRS 1042 three-year holding requirement, enabling all qualified equity investors to capture a permanent Federal and State income tax deferment on all gains resulting from the ESOP purchase, pro rata and pari passu, of 25% of those investor&#39;s shares in the 48th month, and 10% annually thereafter over the next seven years in seven equal installments of 10% each. 
     For the first 48 months, all pretax profits (dividends) and 20 ½ months of employer payroll contributions (equal to 25% of gross payroll for a leveraged ESOP, annually, limited by Rule 415 promulgated under the Internal Revenue Code) will accumulate in a trust suspense account. These funds will be subject only to the security deed interest necessary to secure the Fuel Trust Investor&#39;s spent cash, investment grade rating and very modest corresponding investment grade floor rate of return. 
     This minimum return results from the most pragmatic projections possible, embracing a scenario in which the aircraft fly less than half full for the first year and enjoy half-price fuel (fuel otherwise would represent 17% of all New Air costs) and less than half-price start-up labor costs (labor represents 30% to 40% of all airlines&#39; costs). New Air&#39;s fully burdened labor costs as a start-up, although $3,000 above scale at entry, are still much less than $35,000 per employee compared to the major airlines&#39; average costs of over $65,000 per employee. 
     The equity investors will, as described above, have minimally recovered all of their initial investment plus a modest (30%) return (with a tax deferment on the gain) as a floor in the 48th month. If economic performance does much better than this “worst case” scenario, as expected, the equity investors will make correspondingly much more in the 48th month. The real beauty lies in the fact that the investors will have only sold 25% of their stock in the first, 48th month purchase by the ESOP, to become whole and make a profit. They will still own 75% of their stock, which the ESOP will then buy in seven equal installments annually over the next seven years. Again, all other shareholders will continue to subordinate to the equity investors (30%) rate of return for the full eleven years. However, as the airline grows by the projected, carefully controlled, annual rate of 20%, the minimum targeted return in a continued “worst case” scenario projects additional tax deferred earnings for the three $5 million equity investors of a total of $140,000,000 (instead of the $31.5 million minimum return covered by the continued subordination by all other shareholders as outlined above) tied to a floor for the continued operation of the Fuel Trust in the most pragmatic set of circumstances imagined over the next seven years. 
     It was very important to accomplish two things: 
     (1.) Protect the Fuel Trust Investor by way of a secure enough transaction to carry an investment grade rating (Moody&#39;s or S&amp;P) A, AA or AAA in order to pay half the fuel cost for 11 years with the cheapest money possible, a nontaxable income stream created by the on-going sale of equity on a performance driven basis. This is accomplished through the sale of the Fuel Trust equity (25% of the airline) incrementally, in trust, fully secured by the suspense account, and totally performance-driven, month to month, by carefully tracked monthly P&amp;L&#39;s. 
     (2.) To set up three $5 million dollar equity investors to benefit first from the above, ahead of all other shareholders, through subordination by all other shareholders, with a minimum 30% rate of return, as a floor, and an unlimited upside. 
     New Air will convey 5% of its shares (the only dividend-bearing preferred class of stock, convertible to common) to an ESOP prior to commencement of revenue service. In the 48th month the ESOP will acquire an additional 25% of the company from all other shareholders, pro rata and pari passu, for a price equal to ten times twelve months most recent trailing earnings (EBIT) per share at the time of purchase, bringing its total ownership to the 30% necessary to trigger the 1042 tax deferment. From then on, for the next seven years, the ESOP will acquire 10% of the company annually on the same basis. At the end of eleven years the ESOP will own 100% of the airline, having acquired all other shares from all other shareholders. The ESOP will have used all of the earnings of the airline and the rule 415 limited contributions, conveyed on a highly tax-advantaged basis, to purchase all other shares from all other shareholders (without costing the ESOP or the employees anything but high productivity). 
     By utilizing an incremental ESOP, which will acquire all of the outstanding equity on of the airline over an 11-year period, as an exit strategy, all shareholders otherwise eligible for capital gains treatment, in New Air, will be eligible for a Federal and State income tax deferment on the gain from the sale of their equity (shares) to the ESOP for an amount equal to ten times twelve months most recent EBIT per share, taking advantage of a targeted twenty percent (20%), carefully controlled annual growth rate. The tax-deferred returns created by this method are many times greater than would be the case with an IPO. 
     This income tax deferment, available under Section 1042 of the Internal Revenue Code, is subject to specific conditions. If an ESOP purchases at least 30% of the outstanding stock of a privately held company and the selling shareholder(s): (1) are not “C” corporations, (2) have owned their stock for at least three years, and (3) are otherwise eligible for capital gains treatment, the selling shareholder(s) can defer virtually indefinitely the taxes on their gain. To obtain this tax benefit, the selling shareholder(s) must reinvest the proceeds in a “qualified replacement property” within a 15-month window beginning three months prior to the sale and ending 12 months after the sale. Such a Section 1042 transaction, which derives its name from the section of the Code that governs its availability, is often referred to as a “1042 rollover.” 
     Upon completion of all financing, 100% of New Air will be owned as follows: 
     50% by management and seed investors who have already put in $4 million for development. 
     25% by the Fuel Trust, to be purchased by the Fuel Trust Investor, in trust, for half the fuel cost over 11 years, carrying an investment grade rating (A, AA or AAA). The Fuel Trust enables the airline to indirectly pay half its fuel cost (an airline&#39;s second highest cost after labor) with equity. 
     15% cash equity (to ideally be held by three groups at $5 million each) which carries a 30% rate of return as a floor, to which all other shareholders, except the Fuel Trust, subordinate. 
     5% the only dividend bearing preferred stock, owned by a leveraged ESOP (the purchase of which is financed by New Air for the ESOP). All dividends paid to the ESOP will be held in a suspense (trust) account, which is used to fully secure the monies spent by the Fuel Trust until the stock purchase date in order to obtain an investment grade rating and insure sufficient cash for the ESOP to buy out all other shareholders, as planned. 
     5% owned by the Education Endowment Fund for higher education for the benefit of the employees and their dependants, funded by pro rata and pari pasu ESOP purchases as described, over the full 11 years. 
     Any commitment to provide any funding, as described, would, of course, also be conditioned upon the following: 
     New Air bringing to the closing an acceptable commitment for a 70% U.S. Government Guaranteed Business and Industry Loan, for $10 million, in the form of a ten-year term loan to be secured by an assignment of the Quality Jobs Act commitment from the State of Oklahoma of 4.58% of New Air&#39;s gross Oklahoma payroll for ten years. This commitment will be paid quarterly, in cash, and is backed irrevocably by the full faith and AA rated credit of the State of Oklahoma. The 10-year total cannot exceed $21,576,684, unless adjusted upward, based on re-evaluation and approval by the State of Oklahoma. 
     A similar B &amp; I loan commitment, for $10,000,000 for Local Express in its home town and state. 
     A commitment from pension (or other) funds to fully fund the Fuel Trust for the full 11 year period, as earlier described. 
     Subject to formal, open meeting approval as required by Oklahoma law, commitments from the Owasso Economic Development Authority (“OEDA”), of Owasso, Oklahoma (a community adjacent to Tulsa International Airport) to provide the following: 
     A tract consisting of up to 40 acres on Mingo Road, six miles from Tulsa International Airport, on the west side of Owasso, directly across from a new, $5 million dollar, eighteen-hole golf course on the third highest point of land in Tulsa County, with a view of the Tulsa skyline—Free. 
     OEDA will construct, or cause to be constructed, on the above property, parking lots, roadways, curb and gutter, storm drainage and lighting—Free. 
     OEDA will make available up to $5 million for the construction of New Air&#39;s headquarters campus, to consist of a headquarters building, a reservation center and a spare parts warehouse. OEDA will lease these facilities to New Air on a break-even lease at well below the prime lending rate for 15 years, upon the conclusion of which lease, OEDA will deed the buildings, free and clear to New Air for the sum of ($10.00), thereby avoiding all ad valorem taxes. 
     Written commitments from the States of Oklahoma and/or Louisiana to provide or pay for all training and related expenses (approximately $2 million). 
     The satisfactory completion of all financing as described herein, for a total of not less than $117 million for New Air (Local Express/Second Local Express) (including the Fuel Trust) as well as all financing for any aircraft and any improvements thereto, or alternatively, a satisfactory leasing arrangement, in writing, for all such aircraft as may be required. 
     A thorough review and analysis of the completed New Air business plan, revised to reflect the most current data available for all markets therein, is used to set the performance criteria for the computing. Such endeavor will also address the addition of the Local Express and Second Local Express charter service required to satisfy the needs of the hotel and casino industry in Nevada as well as the New Orleans Convention Bureau, for all conventions and Mardi Gras, as well as all scheduled routes to and from New Orleans Lakefront Airport, conditioned only upon financing. All such work is to be performed at New Air&#39;s expense by a mutually agreed upon independent third party. The contract for and the final results of such thorough review and analysis must be acceptable to all parties. 
     Acceptable review of executed contracts with complete management teams and slates of directors for New Air, Local Express and Second Local Express. New Air (including Local Express and Second Local Express) will have the following initial capital structure when all financing is complete. 
     
       
         
               
               
               
             
           
               
                   
                   
               
             
             
               
                   
                 Three 5% equity tranches (cash) 
                  $15,000,000 
               
               
                   
                 B &amp; I term loan proceeds (cash) 
                  20,000,000 
               
               
                   
                 Fuel Trust (½ of all fuel costs 
                  74,625,000 
               
               
                   
                 for first 4 years) 
               
               
                   
                 OEDA (land and improvements) 
                   6,200,000 
               
               
                   
                 State training funds 
                   2,000,000 
               
               
                   
                 Total 
                 $117,825,000 
               
               
                   
                   
               
             
          
         
       
     
     New Air (Local Express and Second Local Express) revenue stream would be available to secure additional bank credit lines through a lock box account to supplement the above. 
     The above does not reflect a $21,576,684 commitment from the State of Oklahoma Quality Jobs Program, or any additional potential funding offered by the State of Louisiana&#39;s Economic Development Corporation or income derived from U.S. Mail to which New Air will be entitled under law by flying the most direct (nonstop) routes. 
     The three $5 million dollar equity tranches will trigger all other initial financing ($102,825,000) which have been arranged. As New Air&#39;s wholly owned subsidiary, Local Express holds valid FAA- 121  and DOT- 401  certificates and is already flying and has been for ten years. 
     The start-up airline, which utilizes a significant amount of fuel for its operations, implements the invention by digital computer operations. An analysis of the projected revenues and expenses of the airline shows that a commodity trust payment participation of fifty percent (50%) of the predetermined fuel costs and a growth rate of twenty percent (20%) provides a viable rate of return for the investor entity and an optimized profit structure for the airline given a selected and specified equity position held in trust. The airline enters into a long-term (eleven (11) year) contract with a commodity trust created to provide half the cost of fuel to the airline at fifty percent (50%) of the full negotiated price due the fuel suppliers). 
     To accomplish this, the airline issues ten million (10,000,000) shares of stock. Initially five percent (5%) (five hundred thousand (500,000) shares) is issued to the employee stock ownership plan to create the employee stock ownership plan. The commodity trust is issued twenty-five percent (25%) (two million five hundred thousand (2,500,000) shares) which will be held in trust for the investor entity. The purpose of the trust holding the shares is to secure performance by the commodity trust/investor entity over the life of the mechanism of the invention, subject only to the commercial entity surpassing the predetermined performance criteria. The remaining seventy percent (70%) (four hundred sixty thousand (460,000) shares) of the stock is issued to others in exchange for capital, operational funding and other requirements of the airline. 
     The initial business plan for the airline estimates that the first year of positive earnings will be in year two (2). It is agreed and specified that the employee stock ownership plan may execute the first binding call on and purchase all released stock at the end of the forty-eighth (48th) month (TIMEL) of revenue operations in order to facilitate maximum tax and profit benefit for the shareholders. The business plan indicates that the airline will require approximately sixty million dollars ($74,625,000) to purchase all fuel utilized during the first forty-eight (48) months of operation on a hedged basis. 
     The ESOP will begin purchasing stock from the investor entity at the end of the forty-eighth (48th) month. The employee stock ownership plan must acquire enough equity so that it owns a minimum of thirty percent (30%) of the commercial entity at the conclusion of the forty-eighth (48th) month (TIMEL) in order for the sellers to capture the IRS Section 1042 exemption. The employee stock ownership plan will exercise its binding call purchasing all shares released from the commodity trust to and earned by the investor entity (six hundred twenty-five thousand eight hundred (625,000) shares) as well as shares from all other shareholders (one million eight hundred and seventy five thousand (1,875,000) shares) on a prorata and pari passu (at an equal 5 rate or pace) basis. Following this transaction, the employee stock ownership plan will hold thirty percent (30%) (three million (3,000,000) shares) of the total outstanding equity of the airline. 
     Thereafter, the ESOP plan will annually exercise its binding call on and purchase ten percent (10%) of the outstanding equity of the airline prorata and pari passu from the investor entity and all other shareholders. 
     The commodity trust is formed with two million five hundred thousand (2,500,000) shares of equity stock in and from the airline and seventy four million six hundred and twenty five thousand dollars ($74,625,000) from the investor entity. The commodity trust agrees, on behalf of the commercial entity, to fund half of all fuel required from the fuel suppliers) and purchase equity for fifty percent (50%) of said fuel costs for the eleven (11) year life of the mechanism. The investor entity agrees to sell all earned and released airline equity stock to the employee stock ownership plan, pursuant to binding calls on such stock by the employee stock ownership plan, and to replenish the trust with sufficient funds to pay for fifty percent (50%) of the fuel costs for the subsequent incremental (TIME 3 ) periods. 
     The commodity trust agrees to fund on behalf of the airline all fuel required for operations for the life of the mechanism of the invention. The airline agrees to remit fifty percent (50%) (COMPCT) of said fuel cost to the fuel purchasing account as its predetermined share of said fuel costs concurrently with each demand for fuel. The airline begins operations, establishes routes, and generates revenues. During the first year the airline does not anticipate an operating profit; however, from the second year on operating profits are anticipated. Each year, the airline contributes the maximum legally allowable pre-tax and post-tax profits as well as the maximum legally allowable percentage of payroll contributions to the employee stock ownership plan. 
     During each period (TIME 1  and TIME 3 ), the commodity trust will periodically release the earned stock it holds to the investor entity based upon the funds expenditure formula (VALU(n)) For example, if during the first year of operation, the commodity trust spends ten million dollars ($10,000,000) for fuel on behalf of the airline, then VALU(N) will be calculated as: 
     
       
         VALU(N)=(($10 mil)/($74,625,000)*(13.4%))=0.8375% (83,750 shares) 
       
     
     At the end of forty-eight (48) months (TIMEL) the employee stock ownership plan exercises its binding call utilizing the funds contributed and dividended by the airline and purchases all stock earned by and released to the investor entity from the commodity trust. The employee stock ownership plan also purchases equity prorata and pari passu from all other shareholders. Equity purchases from these other shareholders may be in cash or notes payable and are subordinated in all cases to purchases by the employee stock ownership plan from the investor entity. 
     The commodity trust continues to fund half of all fuel requirements for the airline, throughout the life of the mechanism operations, on this basis. 
     Funds remaining in the commodity trust in excess of the fuel cost requirements of the current incremental period post facto may be distributed to the investor entity, subject to the trust agreement. 
     At the end of the eleventh (11th) year, there will be no airline equity remaining in the commodity trust. Hence, the life of the commodity trust will be exhausted. At this point, the trust is dissolved, the anticipated airline ownership by the employee stock ownership plan is complete, and this application of the invention is terminated. 
     Optimally, the employee stock ownership plan acquires all ten million (10,000,000) shares of the airline stock within the eleven years at which time the airline is totally owned by the employee stock ownership plan (employees). 
     As illustrated below, New Air can overcome troublesome problems that plague older airlines by utilizing the present invention. 
     Providing a suitable institutional environment includes creating a commodity funding trust (in the case of an airline, a fuel trust) as an investment vehicle for institutional investors. This investment is completely insured against risk or loss and carries an investment grade rating. The commodity trust is structured to have equity shares. 
     Providing a suitable institutional environment also includes creating a fuel trust investor entity, which buys 25% of New Air&#39;s equity (shares) for enough funds to cover half the cost of a key commodity (in the case of New Air, fuel) on an ongoing basis over a predetermined number of payment periods and years. 
     Providing a suitable institutional environment further includes creating an ESOP to purchase the equity shares incrementally and over time, held by the commodity trust, over a parallel period, utilizing earnings contributed to the ESOP by the New Air, on a tax-advantaged basis, with superlative rates of return on equity as a floor, and no corporate debt. 
     The effect is the transfer of New Air ownership to an ESOP without debt, wage concessions or leverage, with the sale of equity on a performance-driven basis for enough to pay half the cost of jet fuel (currently between 12% and 16% of gross revenues for a scheduled carrier) over the entire life of the funding process. 
     One feature of the present invention—computerized accounting and modeling operations—indicate that the fuel trust investor entity(ies) is currently projected to earn at least a 10.39% IRR over an 11-year period, while purchasing equity, in trust, for amounts sufficient to cover half of all of New Air&#39;s fuel costs (conditioned only upon carefully tracked monthly P&amp;L performance). 
     This fuel trust investment can be fully insured against risk or loss, with a 7% estimated IRR as a floor, net of premium and hedging costs. The insurability of this investment against loss will compel pension funds to invest, in total compliance with the prudent man rule, with an unparalleled investment grade single A (A), double A (AA) or triple A (AAA) fully insured rate of return as a floor. 
     Accordingly, by utilizing the financing method outlined above, carried out by the mechanism of the present invention, New Air will enjoy a total capital base of over $117,875,000 (not including $4,000,000 in founding shareholder equity), over five times the amount of start-up capital recommended by all experts. Thus, New Air will avoid one of the largest single threat facing a start-up airline (or any other company), that of under-capitalization. 
     The present invention carries out the data processing and communications underpinning a steady stream of non-taxable income for the airline through the incremental sale of the equity, through the initial purchase of equity (25% of the company) in trust, with the caveat that the proceeds of said purchases can only be used to buy half the airline&#39;s jet fuel, providing the airline meets or surpasses minimum targeted performance objectives on a carefully tracked monthly P&amp;L basis. The fuel trust investor entity then sells its equity to the ESOP, incrementally, at a profit, over 11 years. 
     
       
         
               
             
               
               
               
             
               
             
               
               
               
             
           
               
                   
               
             
             
               
                 ESOP Purchase Chart 
               
             
          
           
               
                   
                 ESOP % 
                 Fuel Trust &amp; New Air 
               
               
                 Year 
                 Equity 
                 Stockholders % Equity 
               
               
                   
               
               
                 Start 
                  5 
                 95 
               
               
                 4 
                 30 
                 70 
               
               
                 5 
                 40 
                 60 
               
               
                 6 
                 50 
                 50 
               
               
                 7 
                 60 
                 40 
               
               
                 8 
                 70 
                 30 
               
               
                 9 
                 80 
                 20 
               
               
                 10  
                 90 
                 10 
               
               
                 11  
                  0 
                 100  
               
               
                   
               
             
          
           
               
                 Representative New Air Savings 
               
               
                 Over Particular Scheduled Operations 
               
               
                   
               
             
          
           
               
                   
                 Year One 
                  $6,009,000 
               
               
                   
                 Year Two 
                  $7,085,000 
               
               
                   
                 Year Three 
                  $8,181,000 
               
               
                   
                 Year Four 
                  $9,571,000 
               
               
                   
                 Year Five 
                  $11,250,000 
               
               
                   
                 Year Six 
                  $13,500,000 
               
               
                   
                 Year Seven 
                  $16,201,000 
               
               
                   
                 Year Eight 
                  $19,441,000 
               
               
                   
                 Year Nine 
                  $23,329,000 
               
               
                   
                 Year Ten 
                  $27,995,000 
               
               
                   
                 Year Eleven 
                  $33,594,000 
               
               
                   
                 TOTAL 
                 $176,156,000 
               
               
                   
                   
               
               
                   
                 (Based on 20% annual growth.)  
               
             
          
         
       
     
     Accordingly, the use of a fuel trust and the present invention greatly enhances profits by reducing fuel cost; therefore reducing the scheduled airline&#39;s break-even load factor and risk. The mechanism of the present invention also creates and implements automated and semi-automated data processing for ESOP ownership over an 11-year period in return for equity in the form of 25% of the New Air&#39;s stock, which is purchased in trust at the commencement of scheduled revenue service and paid for over 11 years pursuant to performance driven criteria, which aids in efficiently obtaining full insurance through an insurance carrier entity or entities carrying an investment grade rating (single A, double A, or triple A). 
     Computer operations in accordance with the present invention (see particularly the foregoing specimens) can lead to the following output specimens. 
     
       
         
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 8 
               
               
                 PROJECTED BALANCE SHEET 
               
               
                 20% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
               
               
                   
               
             
          
           
               
                 Assets 
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
               
               
                 Cash 
                 3,040 
                 18,550 
                 33,732 
                 44,452 
                 55,591 
                 69,203 
                 85,632 
                 105,344 
                 129,136 
                 157,763 
                 193,246 
               
               
                 Amounts Receiv- 
                 2,951 
                 4,575 
                 5,524 
                 6,692 
                 8,110 
                 9,926 
                 12,149 
                 14,869 
                 18,199 
                 22,275 
                 27,264 
               
               
                 able 
               
               
                 Stock Loans 
                 3,188 
                 2,125 
                 1,063 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Receivable 
               
               
                 Deposits &amp; Other 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
               
               
                 Assets 
               
               
                 Fixed Assets 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2.000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
               
               
                 Depredation &amp; 
                   (286) 
                   (776) 
                 (1,125) 
                 (1,375) 
                 (1,554) 
                 (1,732) 
                 (1,911) 
                 (2,000) 
                 (2,000) 
                 (2,000) 
                 (2,000) 
               
               
                 Amortization 
               
               
                 Total Assets 
                 13,893 
                 29,475 
                 44,193 
                 54,768 
                 67,147 
                 82,397 
                 100,870 
                 123,213 
                 150,335 
                 183,038 
                 223,510 
               
               
                 Liabilities &amp; 
               
               
                 Equity 
               
               
                 Amounts Payable 
                 3,184 
                 4,183 
                 4,885 
                 5,829 
                 6,877 
                 8,330 
                 10,047 
                 12,083 
                 14,635 
                 17,655 
                 21,307 
               
               
                 Loans Payable 
                 9,000 
                 8,000 
                 7,000 
                 6,000 
                 5,000 
                 4,000 
                 3,000 
                 2,000 
                 1,000 
                 0 
                 0 
               
               
                 Capital 
                 15,186 
                 23,118 
                 32,308 
                 42,939 
                 55,270 
                 70,067 
                 87,823 
                 109,131 
                 134,700 
                 165,383 
                 202,202 
               
               
                 Retained Earnings 
                 (13,477) 
                 (5,826) 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Total Liabilities 
                 13,893 
                 29,475 
                 44,193 
                 54,768 
                 67,147 
                 82,397 
                 100,870 
                 123,213 
                 150,335 
                 183,038 
                 223,510 
               
               
                 &amp; Equity 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 9 
               
               
                 PROJECTED ESOP INCOME &amp; CASH FLOW STATEMENT 
               
               
                 15% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YR 1 
                 YR 2 
                 YR 3 
                 YR 4 
                 YR 5 
                 YR 6 
                 YR 7 
                 YR 8 
                 YR 9 
                 YR 10 
                 YR 11 
                 TOTAL 
               
               
                   
               
             
          
           
               
                 Beginning Cash Balance 
                 0 
                 3,181 
                 7,123 
                 12,091 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 3,254 
                 3,833 
                 4,451 
                 5,095 
                 5,848 
                 6,927 
                 8,205 
                 9,719 
                 11,512 
                 13,636 
                 16,152 
                 88,633 
               
               
                 Interest Reimbursement 
                 404 
                 303 
                 202 
                 101 
                 3,008 
                 4,148 
                 5,511 
                 7,146 
                 9,116 
                 11,489 
                 14,310 
                 55,737 
               
               
                 Stockholder Stock Loans 
                 0 
                 0 
                 0 
                 50,126 
                 24,023 
                 30,128 
                 37,686 
                 47,021 
                 58,451 
                 71,757 
                 86,155 
                 405,347 
               
               
                 Pre-Tax Dividend Income 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
                 5,013 
                 7,415 
                 10,428 
                 14,196 
                 18,898 
                 24,743 
                 31,919 
                 116,863 
               
               
                 After Tax Dividend Income 
                 0 
                 0 
                 183 
                 9,192 
                 8,114 
                 9,565 
                 11,616 
                 14,416 
                 18,017 
                 21,525 
                 23,190 
                 115,816 
               
               
                 Interest Income @ 6% 
                 0 
                 191 
                 427 
                 725 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 1,344 
               
               
                 Total Sources of Funds 
                 4,721 
                 5,390 
                 6,326 
                 66,302 
                 46,005 
                 58,183 
                 73,445 
                 92,499 
                 115,994 
                 143,150 
                 171,726 
                 783,739 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 0 
                 0 
                 0 
                 77,125 
                 37,808 
                 46,398 
                 57,232 
                 70,819 
                 87,567 
                 106,415 
                 124,888 
                 608,252 
               
               
                 Administration @ 2% 
                 73 
                 83 
                 93 
                 104 
                 177 
                 222 
                 274 
                 337 
                 413 
                 503 
                 609 
                 2,887 
               
               
                 Initial Stock Purchase 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
                   
                   
                   
                   
                   
                   
                   
                 4,250 
               
               
                 Interest On Initial Stock Purchase 
                 404 
                 303 
                 202 
                 101 
                   
                   
                   
                   
                   
                   
                   
                 1,009 
               
               
                 Loan Repayment Over 10 Yr Stock- 
                   
                   
                   
                   
                 5,013 
                 7,415 
                 10,428 
                 14,196 
                 18,898 
                 24,743 
                 31,919 
                 112,613 
               
               
                 holder Stock Loans 
               
               
                 Interest Expense @ 6% Stockholder 
                   
                   
                   
                   
                 3,008 
                 4,148 
                 5,511 
                 7,146 
                 9,116 
                 11,489 
                 14,310 
                 54,728 
               
               
                 Stock Loans 
               
               
                 Total Uses of Funds 
                 1,539 
                 1,448 
                 1,357 
                 78,392 
                 46,005 
                 58,183 
                 73,445 
                 92,499 
                 115,994 
                 143,150 
                 171,726 
                 783,739 
               
               
                 Ending Cash Balance 
                 3,181 
                 7,123 
                 12,091 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 11 
               
               
                 PROJECTED FUEL SAVINGS 
               
               
                 20% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Gallons (000) 
               
               
                 Boeing 737 
                 15,419 
                 20,601 
                 23,871 
                 27,612 
                 32,028 
                 38,434 
               
               
                 Total 
                 15,419 
                 20,601 
                 23,871 
                 27,612 
                 32,028 
                 38,434 
               
               
                 Price Per Gallon 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
               
               
                 Handling Cost 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
               
               
                 Total 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
               
               
                 Fuel Purchases 
                 12,335 
                 16,481 
                 19,097 
                 22,090 
                 25,622 
                 30,747 
               
               
                 Fuel by Component 
               
               
                 Fuel Cost 
                 11,873 
                 15,863 
                 18,381 
                 21,261 
                 24,662 
                 29,594 
               
               
                 Handling Cost 
                 463 
                 618 
                 716 
                 828 
                 961 
                 1,153 
               
               
                 Total 
                 12,335 
                 16,481 
                 19,097 
                 22,090 
                 25,622 
                 30,747 
               
               
                 Savings by Year 
                 5,936 
                 7,931 
                 9,190 
                 10,631 
                 12,331 
                 14,797 
               
               
                 Cumulative Savings 
                 5,936 
                 13,868 
                 23,058 
                 33,689 
                 46,020 
                 60,817 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Gallons (000) 
               
               
                 Boeing 737 
                 46,120 
                 55,345 
                 66,413 
                 79,696 
                 95,635 
                 501,175 
               
               
                 Total 
                 46,120 
                 55,345 
                 66,413 
                 79,696 
                 95,635 
                 501,175 
               
               
                 Price Per Gallon 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
               
               
                 Handling Cost 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
               
               
                 Total 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
               
               
                 Fuel Purchases 
                 36,896 
                 44,276 
                 53,131 
                 63,757 
                 76,508 
                 400,940 
               
               
                 Fuel by Component 
               
               
                 Fuel Cost 
                 35,513 
                 42,615 
                 51,138 
                 61,366 
                 73,639 
                 385,905 
               
               
                 Handling Cost 
                 1,384 
                 1,660 
                 1,992 
                 2,391 
                 2,869 
                 15,035 
               
               
                 Total 
                 36,896 
                 44,276 
                 53,131 
                 63,757 
                 76,508 
                 400,940 
               
               
                 Savings by Year 
                 17,756 
                 21,308 
                 25,569 
                 30,683 
                 36,820 
                 192,952 
               
               
                 Cumulative Savings 
                 78,573 
                 99,881 
                 125,450 
                 156,133 
                 192,952 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 12 
               
               
                 PROJECTED ESOP INCOME &amp; CASH FLOW STATEMENT 
               
               
                 20% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 3,181 
                 7,123 
                 12,494 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 3,254 
                 3,833 
                 4,644 
                 5,548 
                 6,645 
                 8,213 
               
               
                 Interest Reimbursement 
                 404 
                 303 
                 202 
                 101 
                 3,210 
                 4,526 
               
               
                 Stockholder Stock Loans 
                 0 
                 0 
                 0 
                 53,493 
                 27,293 
                 35,322 
               
               
                 Pre - Tax Dividend Income 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
                 5,349 
                 8,079 
               
               
                 After Tax Dividend Income 
                 0 
                 0 
                 396 
                 9,504 
                 10,127 
                 12,507 
               
               
                 Interest Income @ 6% 
                 0 
                 191 
                 427 
                 750 
                 0 
                 0 
               
               
                 Total Sources of Funds 
                 4,721 
                 5,390 
                 6,732 
                 70,458 
                 52,523 
                 68,647 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 0 
                 0 
                 0 
                 81,675 
                 43,867 
                 55,787 
               
               
                 Administration @ 2% 
                 73 
                 83 
                 97 
                 113 
                 197 
                 255 
               
               
                 Initial Stock Purchase 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
               
               
                 Interest On Initial Stock Purchase 
                 404 
                 303 
                 202 
                 101 
               
               
                 Loan Repayment 10 Yr Over Stockholder Stock Loans 
                   
                   
                   
                   
                 5,349 
                 8,079 
               
               
                 Interest Expense @ 6% Stockholder Stock 
                   
                   
                   
                   
                 3,210 
                 4,526 
               
               
                 Loans 
               
               
                 Total Uses of Funds 
                 1,539 
                 1,448 
                 1,361 
                 82,951 
                 52,623 
                 68,647 
               
               
                 Ending Cash Balance 
                 3,181 
                 7,123 
                 12,494 
                 0 
                 0 
                 0 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 10,151 
                 12,546 
                 15,507 
                 19,167 
                 23,691 
                 113,199 
               
               
                 Interest Reimbursement 
                 6,161 
                 8,211 
                 10,797 
                 13,996 
                 17,987 
                 65,897 
               
               
                 Stockholder Stock Loans 
                 45,773 
                 59,297 
                 75,437 
                 96,170 
                 120,277 
                 513,062 
               
               
                 Pre - Tax Dividend Income 
                 11,611 
                 16,188 
                 22,118 
                 29,662 
                 39,279 
                 136,535 
               
               
                 After Tax Dividend Income 
                 16,184 
                 21,497 
                 26,802 
                 34,534 
                 41,373 
                 172,924 
               
               
                 Interest Income @ 6% 
                 0 
                 0 
                 0 
                 0 
                 0 
                 1,368 
               
               
                 Total Sources of Funds 
                 89,880 
                 117,739 
                 150,661 
                 193,529 
                 242,606 
                 1,002,984 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 71,782 
                 92,925 
                 117,220 
                 149,208 
                 184,507 
                 796,971 
               
               
                 Administration @ 2% 
                 326 
                 415 
                 526 
                 663 
                 834 
                 3,582 
               
               
                 Initial Stock Purchase 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 Interest On Initial Stock Purchase 
                   
                   
                   
                   
                   
                 1,009 
               
               
                 Loan Repayment 10 Yr Over Stockholder Stock Loans 
                 11,611 
                 16,188 
                 22,118 
                 29,662 
                 39,279 
                 132,285 
               
               
                 Interest Expense @ 6% Stockholder Stock Loans 
                 6,161 
                 8,211 
                 10,797 
                 13,996 
                 17,987 
                 64,887 
               
               
                 Total Uses of Funds 
                 89,880 
                 117,739 
                 150,661 
                 193,529 
                 242,606 
                 1,002,984 
               
               
                 Ending Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 13 
               
               
                 PROJECTED ESOP INCOME &amp; CASH FLOW STATEMENT 
               
               
                 20% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 3,181 
                 7,123 
                 12,494 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 3,254 
                 3,833 
                 4,644 
                 5,548 
                 6,645 
                 8,213 
               
               
                 Interest Reimbursement 
                 404 
                 303 
                 202 
                 101 
                 3,210 
                 4,526 
               
               
                 Stockholder Stock Loans 
                 0 
                 0 
                 0 
                 53,493 
                 27,293 
                 35,322 
               
               
                 Pre - Tax Dividend Income 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
                 5,349 
                 8,079 
               
               
                 After Tax Dividend Income 
                 0 
                 0 
                 396 
                 9,504 
                 10,127 
                 12,507 
               
               
                 Interest Income @ 6% 
                 0 
                 191 
                 427 
                 750 
                 0 
                 0 
               
               
                 Total Sources of Funds 
                 4,721 
                 5,390 
                 6,732 
                 70,458 
                 52,523 
                 68,647 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 0 
                 0 
                 0 
                 81,675 
                 43,867 
                 55,787 
               
               
                 Administration @ 2% 
                 73 
                 83 
                 97 
                 113 
                 197 
                 255 
               
               
                 Initial Stock Purchase 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
               
               
                 Interest On Initial Stock Purchase 
                 404 
                 303 
                 202 
                 101 
               
               
                 Loan Repayment Over 10 Years Stockholder Stock Loans 
                   
                   
                   
                   
                 5,349 
                 8,079 
               
               
                 Interest Expense @ 6% Stockholder Stock Loans 
                   
                   
                   
                   
                 3,210 
                 4,526 
               
               
                 Total Uses of Funds 
                 1,539 
                 1,448 
                 1,361 
                 82,951 
                 52,623 
                 68,647 
               
               
                 Ending Cash Balance 
                 3,181 
                 7,123 
                 12,494 
                 0 
                 0 
                 0 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 10,151 
                 12,546 
                 15,507 
                 19,167 
                 23,691 
                 113,199 
               
               
                 Interest Reimbursement 
                 6,161 
                 8,211 
                 10,797 
                 13,996 
                 17,987 
                 65,897 
               
               
                 Stockholder Stock Loans 
                 45,773 
                 59,297 
                 75,437 
                 96,170 
                 120,277 
                 513,062 
               
               
                 Pre - Tax Dividend Income 
                 11,611 
                 16,188 
                 22,118 
                 29,662 
                 39,279 
                 136,535 
               
               
                 After Tax Dividend Income 
                 16,184 
                 21,497 
                 26,802 
                 34,534 
                 41,373 
                 172,924 
               
               
                 Interest Income @ 6% 
                 0 
                 0 
                 0 
                 0 
                 0 
                 1,368 
               
               
                 Total Sources of Funds 
                 89,880 
                 117,739 
                 150,661 
                 193,529 
                 242,606 
                 1,002,984 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 71,782 
                 92,925 
                 117,220 
                 149,208 
                 184,507 
                 796,971 
               
               
                 Administration @ 2% 
                 326 
                 415 
                 526 
                 663 
                 834 
                 3,582 
               
               
                 Initial Stock Purchase 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 Interest On Initial Stock Purchase 
                   
                   
                   
                   
                   
                 1,009 
               
               
                 Loan Repayment Over 10 Years Stockholder Stock Loans 
                 11,611 
                 16,188 
                 22,118 
                 29,662 
                 39,279 
                 132,285 
               
               
                 Interest Expense @ 6% Stockholder Stock Loans 
                 6,161 
                 8,211 
                 10,797 
                 13,996 
                 17,987 
                 64,887 
               
               
                 Total Uses of Funds 
                 89,880 
                 117,739 
                 150,661 
                 193,529 
                 242,606 
                 1,002,984 
               
               
                 Ending Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 14 
               
               
                 ESOP PURCHASE SCHEDULE 
               
               
                 20% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 YEAR 4 
                   
                 YEAR 5 
                   
                 YEAR 6 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 25% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 25.00% 
                 81,675 
                 21,493 
                   
                 18.42% 
                 80,808 
                 11,544 
                   
                 15.79% 
                 88,085 
                 14,681 
               
               
                 Leasing Company 
                  5.00% 
                 16,335 
                 4,299 
                   
                  3.68% 
                 16,162 
                 2,309 
                   
                  3.16% 
                 17,617 
                 2,936 
               
               
                 Airline Investors 
                 60.00% 
                 196,020 
                 51,584 
                   
                 44.21% 
                 193,938 
                 27,705 
                   
                 37.89% 
                 211,403 
                 35,234 
               
               
                 ESOP Education 
                  5.00% 
                 16,335 
                 4,299 
                   
                  3.68% 
                 16,162 
                 2,309 
                   
                  3.16% 
                 17,617 
                 2,936 
               
               
                 ESOP 
                  5.00% 
                 16,335 
                 0 
                   
                 30.00% 
                 131,601 
                 0 
                   
                 40.00% 
                 223,148 
                 0 
               
               
                 Total 
                   100% 
                 326,700 
                 81,675 
                   
                   100% 
                 438,670 
                 43,867 
                   
                   100% 
                 557,870 
                 55,787 
               
               
                   
               
             
          
           
               
                   
                 YEAR 7 
                   
                 YEAR 8 
                   
                 YEAR 9 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 13.16% 
                 94,450 
                 18,890 
                   
                 10.53% 
                 97,816 
                 24,454 
                   
                 7.89% 
                 92,542 
                 30,847 
               
               
                 Leasing Company 
                  2.63% 
                 18,890 
                 3,778 
                   
                  2.11% 
                 19,563 
                 4,891 
                   
                 1.58% 
                 18,508 
                 6,169 
               
               
                 Airline Investors 
                 31.58% 
                 226,680 
                 45,336 
                   
                 25.26% 
                 234,758 
                 58,689 
                   
                 18.95%  
                 222,101 
                 74,034 
               
               
                 ESOP Education 
                  2.63% 
                 18,890 
                 3,778 
                   
                  2.11% 
                 19,563 
                 4,891 
                   
                 1.58% 
                 18,508 
                 6,169 
               
               
                 ESOP 
                 50.00% 
                 358,910 
                 0 
                   
                 60.00% 
                 557,550 
                 0 
                   
                 70.00%  
                 820,540 
                 0 
               
               
                 Total 
                   100% 
                 717,820 
                 71,782 
                   
                   100% 
                 929,250 
                 92,925 
                   
                  100% 
                 1,172,200 
                 117,220 
               
               
                   
               
             
          
           
               
                   
                 YEAR 10 
                   
                 YEAR 11 
                   
                 SUMMARY 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Ending 
                 Equity 
                 Total 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 5.26% 
                 78,531 
                 39,265 
                   
                 2.63% 
                 48,554 
                 48,554 
                   
                 0.00% 
                 0 
                 209,729 
               
               
                 Leasing Company 
                 1.05% 
                 15,706 
                 7,853 
                   
                 0.53% 
                 9,711 
                 9,711 
                   
                 0.00% 
                 0 
                 41,946 
               
               
                 Airline Investors 
                 12.63%  
                 188,473 
                 94,237 
                   
                 6.32% 
                 116,531 
                 116,531 
                   
                 0.00% 
                 0 
                 503,390 
               
               
                 ESOP Education 
                 1.05% 
                 15,706 
                 7,853 
                   
                 0.53% 
                 9,711 
                 9,711 
                   
                 0.00% 
                 0 
                 41,946 
               
               
                 ESOP 
                 80.00%  
                 1,193,664 
                 0 
                   
                 90.00%  
                 1,660,563 
                 0 
                   
                 100.00%  
                 1,845,070 
                 0 
               
               
                 Total 
                  100% 
                 1,492,080 
                 149,208 
                   
                  100% 
                 1,845,070 
                 184,507 
                   
                  100% 
                 1,845,070 
                 796,971 
               
               
                   
               
               
                 Equity Value Equals 10 Times Earnings Before Income Taxes and Corporate ESOP Contributions.  
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 15 
               
               
                 FUEL TRUST PARTICIPATION FOR STOCK 
               
               
                 20% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
             
          
           
               
                 ESOP Purchases @ 25% 
                 21,493 
                 11,544 
                 14,681 
                 18,890 
                 24,454 
                 30,847 
                 39,265 
                 48,554 
                 209,729 
               
               
                 Fuel for Stock @ 50% 
                 33,689 
                 12,331 
                 14,797 
                 17,756 
                 21,308 
                 25,569 
                 30,683 
                 36,820 
                 192,952 
               
               
                 Profit on Stock 
                 −12,195 
                 −787 
                 −116 
                 1,134 
                 3,146 
                 5,278 
                 8,582 
                 11,735 
                 16,777 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 16 
               
               
                 FUEL TRUST RETURN ON INVESTMENT 
               
               
                 20% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 Stock 
                 Beginning 
                 Less: 
                 Add: Int @ 
                 Add: Stock 
                 Ending 
                   
               
               
                 In $000 
                 Share 
                 Balance 
                 Fuel Cost 
                 6.00% 
                 Purchases 
                 Balance 
               
               
                   
               
             
          
           
               
                 Beginning of Trust 
                 25% 
                 33,689 
                   
                   
                   
                 33,689 
                 −33,689 
               
               
                 Year 1 
                   
                 33,689 
                 5,936 
                 1,843 
                   
                 29,596 
                 1843.242369 
               
               
                 Year 2 
                   
                 29,596 
                 7,931 
                 1,538 
                   
                 23,202 
                 1537.804064 
               
               
                 Year 3 
                   
                 23,202 
                 9,190 
                 1,116 
                   
                 15,128 
                 1116.415289 
               
               
                 Year 4 
                   
                 15,128 
                 10,631 
                 589 
                 21,493 
                 26,580 
                 22082.18852 
               
               
                 Year 5 
                   
                 26,580 
                 12,331 
                 1,225 
                 11,544 
                 27,018 
                 438 
               
               
                 Year 6 
                   
                 27,018 
                 14,797 
                 1,177 
                 14,681 
                 28,079 
                 1,061 
               
               
                 Year 7 
                   
                 28,079 
                 17,756 
                 1,152 
                 18,890 
                 30,364 
                 2,286 
               
               
                 Year 8 
                   
                 30,364 
                 21,308 
                 1,183 
                 24,454 
                 34,693 
                 4,329 
               
               
                 Year 9 
                   
                 34,693 
                 25,569 
                 1,315 
                 30,847 
                 41,286 
                 6,593 
               
               
                 Year 10 
                   
                 41,286 
                 30,683 
                 1,557 
                 39,265 
                 51,425 
                 10,139 
               
               
                 Year 11 
                   
                 51,425 
                 36,820 
                 1,981 
                 48,554 
                 65,141 
                 13,716 
               
               
                 Net to Trust 
                   
                 33,689 
                 192,952 
                 14,675 
                 209,729 
                 65,141 
                 65,141 
               
               
                 Internal Rate of Return 
                   
                   
                   
                   
                   
                 10.39% 
                 10.39% 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 17 
               
               
                 EQUITY INVESTOR&#39;S RETURN ON INVESTMENT 
               
               
                 20% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                   
                 Begin- 
                   
                   
                   
                   
                   
               
               
                   
                 Stock 
                 ning 
                   
                   
                 Stock 
                 Ending 
               
               
                 In $ 000 
                 Share 
                 Balance 
                   
                   
                 Purchases 
                 Balance 
               
               
                   
               
             
          
           
               
                 Begin- 
                 5% 
                 5,000 
                   
                   
                   
                   
                 −5,000 
               
               
                 ning 
               
               
                 Balance 
               
               
                 Year 1 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 2 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 3 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 4 
                   
                 0 
                   
                   
                 4,299 
                 4,299 
                 4298.684211 
               
               
                 Year 5 
                   
                 4,299 
                   
                   
                 2,309 
                 6,607 
                 2,309 
               
               
                 Year 6 
                   
                 6,607 
                   
                   
                 2,936 
                 9,544 
                 2,936 
               
               
                 Year 7 
                   
                 9,544 
                   
                   
                 3,778 
                 13,322 
                 3,778 
               
               
                 Year 8 
                   
                 13,322 
                   
                   
                 4,891 
                 18,212 
                 4,891 
               
               
                 Year 9 
                   
                 18,212 
                   
                   
                 6,169 
                 24,382 
                 6,169 
               
               
                 Year 10 
                   
                 24,382 
                   
                   
                 7,853 
                 32,235 
                 7,853 
               
               
                 Year 11 
                   
                 32,235 
                   
                   
                 9,711 
                 41,946 
                 9,711 
               
               
                 Net to 
                   
                 5,000 
                 0 
                 0 
                 41,946 
                 46,946 
                 41,946 
               
               
                 Investor 
               
               
                 Internal 
                   
                   
                   
                   
                   
                 32.28% 
                 32.28% 
               
               
                 Rate of 
               
               
                 Return 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 18 
               
               
                 PROJECTED BALANCE SHEET 
               
               
                 15% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
               
               
                   
               
             
          
           
               
                 Assets 
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
               
               
                 Cash 
                 3,040 
                 18,550 
                 33,370 
                 43,237 
                 53,045 
                 64,439 
                 77,626 
                 92,781 
                 110,210 
                 130,416 
                 154,800 
               
               
                 Amounts Receiv- 
                 2,951 
                 4,575 
                 5,294 
                 6,146 
                 7,138 
                 8,372 
                 9,820 
                 11,518 
                 13,511 
                 15,847 
                 18,588 
               
               
                 able 
               
               
                 Stock Loans 
                 3,188 
                 2,125 
                 1,063 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Receivable 
               
               
                 Deposits &amp; Other 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
               
               
                 Assets 
               
               
                 Fixed Assets 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
               
               
                 Depredation &amp; 
                   (286) 
                   (776) 
                 (1,125) 
                 (1,375) 
                 (1,554) 
                 (1,732) 
                 (1,911) 
                 (2,000) 
                 (2,000) 
                 (2,000) 
                 (2,000) 
               
               
                 Amortization 
               
               
                 Total Assets 
                 13,893 
                 29,475 
                 43,601 
                 53,007 
                 63,629 
                 76,079 
                 90,535 
                 107,300 
                 126,720 
                 149,263 
                 176,388 
               
               
                 Liabilities &amp; 
               
               
                 Equity 
               
               
                 Amounts Payable 
                 3,184 
                 4,183 
                 4,676 
                 5,319 
                 6,088 
                 7,057 
                 8,161 
                 9,419 
                 10,858 
                 12,572 
                 14,593 
               
               
                 Loans Payable 
                 9,000 
                 8,000 
                 7,000 
                 6,000 
                 5,000 
                 4,000 
                 3,000 
                 2,000 
                 1,000 
                 0 
                 0 
               
               
                 Capital 
                 15,186 
                 23,118 
                 31,925 
                 41,688 
                 52,541 
                 65,022 
                 79,375 
                 95,881 
                 114,862 
                 136,691 
                 161,794 
               
               
                 Retained Earnings 
                 (13,477) 
                 (5,826) 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Total Liabilities 
                 13,893 
                 29,475 
                 43,601 
                 53,007 
                 63,629 
                 76,079 
                 90,535 
                 107,300 
                 126,720 
                 149,263 
                 176,388 
               
               
                 &amp; Equity 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 19 
               
               
                 PROJECTED FUEL SAVINGS 
               
               
                 15% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Gallons (000) 
               
               
                 Boeing 737 
                 15,419 
                 20,601 
                 22,877 
                 25,359 
                 28,189 
                 32,417 
               
               
                 Total 
                 15,419 
                 20,601 
                 22,877 
                 25,359 
                 28,189 
                 32,417 
               
               
                 Price Per Gallon 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
               
               
                 Handling Cost 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
               
               
                 Total 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
               
               
                 Fuel Purchases 
                 12,335 
                 16,481 
                 18,301 
                 20,287 
                 22,551 
                 25,934 
               
               
                 Fuel by Component 
               
               
                 Fuel Cost 
                 11,873 
                 15,863 
                 17,615 
                 19,526 
                 21,706 
                 24,961 
               
               
                 Handling Cost 
                 463 
                 618 
                 686 
                 761 
                 846 
                 973 
               
               
                 Total 
                 12,335 
                 16,481 
                 18,301 
                 20,287 
                 22,551 
                 25,934 
               
               
                 Savings by Year 
                 5,936 
                 7,931 
                 8,807 
                 9,763 
                 10,853 
                 12,481 
               
               
                 Cumulative Savings 
                 5,936 
                 13,868 
                 22,675 
                 32,438 
                 43,291 
                 55,772 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Gallons (000) 
               
               
                 Boeing 737 
                 37,280 
                 42,872 
                 49,303 
                 56,698 
                 65,203 
                 396,219 
               
               
                 Total 
                 37,280 
                 42,872 
                 49,303 
                 56,698 
                 65,203 
                 396,219 
               
               
                 Price Per Gallon 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
               
               
                 Handling Cost 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
               
               
                 Total 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
               
               
                 Fuel Purchases 
                 29,824 
                 34,298 
                 39,442 
                 45,359 
                 52,162 
                 316,975 
               
               
                 Fuel by Component 
               
               
                 Fuel Cost 
                 28,706 
                 33,011 
                 37,963 
                 43,658 
                 50,206 
                 305,088 
               
               
                 Handling Cost 
                 1,118 
                 1,286 
                 1,479 
                 1,701 
                 1,956 
                 11,887 
               
               
                 Total 
                 29,824 
                 34,298 
                 39,442 
                 45,359 
                 52,162 
                 316,975 
               
               
                 Savings by Year 
                 14,353 
                 16,506 
                 18,982 
                 21,829 
                 25,103 
                 152,544 
               
               
                 Cumulative Savings 
                 70,125 
                 86,631 
                 105,612 
                 127,441 
                 152,544 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 20 
               
               
                 PROJECTED ESOP INCOME &amp; CASH FLOW STATEMENT 
               
               
                 15% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 3,181 
                 7,123 
                 12,091 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 3,254 
                 3,833 
                 4,451 
                 5,095 
                 5,848 
                 6,927 
               
               
                 Interest Reimbursement 
                 404 
                 303 
                 202 
                 101 
                 3,008 
                 4,148 
               
               
                 Stockholder Stock Loans 
                 0 
                 0 
                 0 
                 50,126 
                 24,023 
                 30,128 
               
               
                 Pre - Tax Dividend Income 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
                 5,013 
                 7,415 
               
               
                 After Tax Dividend Income 
                 0 
                 0 
                 183 
                 9,192 
                 8,114 
                 9,565 
               
               
                 Interest Income @ 6% 
                 0 
                 191 
                 427 
                 725 
                 0 
                 0 
               
               
                 Total Sources of Funds 
                 4,721 
                 5,390 
                 6,326 
                 66,302 
                 46,005 
                 58,183 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 0 
                 0 
                 0 
                 77,125 
                 37,808 
                 46,398 
               
               
                 Administration @ 2% 
                 73 
                 83 
                 93 
                 104 
                 177 
                 222 
               
               
                 Initial Stock Purchase 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
               
               
                 Interest On Initial Stock Purchase 
                 404 
                 303 
                 202 
                 101 
               
               
                 Loan Repayment Over 10 Years Stockholder Stock Loans 
                   
                   
                   
                   
                 5,013 
                 7,415 
               
               
                 Interest Expense @ 6% Stockholder Stock Loans 
                   
                   
                   
                   
                 3,008 
                 4,148 
               
               
                 Total Uses of Funds 
                 1,539 
                 1,448 
                 1,357 
                 78,392 
                 46,005 
                 58,183 
               
               
                 Ending Cash Balance 
                 3,181 
                 7,123 
                 12,091 
                 0 
                 0 
                 0 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 8,205 
                 9,719 
                 11,512 
                 13,636 
                 16,152 
                 88,633 
               
               
                 Interest Reimbursement 
                 5,511 
                 7,146 
                 9,116 
                 11,489 
                 14,310 
                 55,737 
               
               
                 Stockholder Stock Loans 
                 37,686 
                 47,021 
                 58,451 
                 71,757 
                 86,155 
                 405,347 
               
               
                 Pre - Tax Dividend Income 
                 10,428 
                 14,196 
                 18,898 
                 24,743 
                 31,919 
                 116,863 
               
               
                 After Tax Dividend Income 
                 11,616 
                 14,416 
                 18,017 
                 21,525 
                 23,190 
                 115,816 
               
               
                 Interest Income @ 6% 
                 0 
                 0 
                 0 
                 0 
                 0 
                 1,344 
               
               
                 Total Sources of Funds 
                 73,445 
                 92,499 
                 115,994 
                 143,150 
                 171,726 
                 783,739 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 57,232 
                 70,819 
                 87,567 
                 106,415 
                 124,888 
                 608,252 
               
               
                 Administration @ 2% 
                 274 
                 337 
                 413 
                 503 
                 609 
                 2,887 
               
               
                 Initial Stock Purchase 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 Interest On Initial Stock Purchase 
                   
                   
                   
                   
                   
                 1,009 
               
               
                 Loan Repayment Over 10 Years Stockholder Stock Loans 
                 10,428 
                 14,196 
                 18,898 
                 24,743 
                 31,919 
                 112,613 
               
               
                 Interest Expense @ 6% Stockholder Stock Loans 
                 5,511 
                 7,146 
                 9,116 
                 11,489 
                 14,310 
                 54,728 
               
               
                 Total Uses of Funds 
                 73,445 
                 92,499 
                 115,994 
                 143,150 
                 171,726 
                 783,739 
               
               
                 Ending Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 21 
               
               
                 ESOP PURCHASE SCHEDULE 
               
               
                 15% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 YEAR 4 
                   
                 YEAR 5 
                   
                 YEAR 6 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 25% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 25.00%  
                 77,125 
                 20,296 
                   
                 18.42% 
                 69,646 
                 9,949 
                   
                 15.79% 
                 73,260 
                 12,210 
               
               
                 Leasing Company 
                 5.00% 
                 15,425 
                 4,059 
                   
                  3.68% 
                 13,929 
                 1,990 
                   
                  3.16% 
                 14,652 
                 2,442 
               
               
                 Airline Investors 
                 60.00%  
                 185,100 
                 48,711 
                   
                 44.21% 
                 167,151 
                 23,879 
                   
                 37.89% 
                 175,824 
                 29,304 
               
               
                 ESOP Education 
                 5.00% 
                 15,425 
                 4,059 
                   
                  3.68% 
                 13,929 
                 1,990 
                   
                  3.16% 
                 14,652 
                 2,442 
               
               
                 ESOP 
                 5.00% 
                 15,425 
                 0 
                   
                 30.00% 
                 113,424 
                 0 
                   
                 40.00% 
                 185,592 
                 0 
               
               
                 Total 
                  100% 
                 308,500 
                 77,125 
                   
                   100% 
                 378,080 
                 37,808 
                   
                   100% 
                 463,980 
                 46,398 
               
               
                   
               
             
          
           
               
                   
                 YEAR 7 
                   
                 YEAR 8 
                   
                 YEAR 9 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 13.16% 
                 75,305 
                 15,061 
                   
                 10.53% 
                 74,546 
                 18,637 
                   
                 7.89% 
                 69,132 
                 23,044 
               
               
                 Leasing Company 
                  2.63% 
                 15,061 
                 3,012 
                   
                  2.11% 
                 14,909 
                 3,727 
                   
                 1.58% 
                 13,826 
                 4,609 
               
               
                 Airline Investors 
                 31.58% 
                 180,733 
                 36,147 
                   
                 25.26% 
                 178,911 
                 44,728 
                   
                 18.95%  
                 165,916 
                 55,305 
               
               
                 ESOP Education 
                  2.63% 
                 15,061 
                 3,012 
                   
                  2.11% 
                 14,909 
                 3,727 
                   
                 1.58% 
                 13,826 
                 4,609 
               
               
                 ESOP 
                 50.00% 
                 286,160 
                 0 
                   
                 60.00% 
                 424,914 
                 0 
                   
                 70.00%  
                 612,969 
                 0 
               
               
                 Total 
                   100% 
                 572,320 
                 57,232 
                   
                   100% 
                 708,190 
                 70,819 
                   
                  100% 
                 875,670 
                 87,567 
               
               
                   
               
             
          
           
               
                   
                 YEAR 10 
                   
                 YEAR 11 
                   
                 SUMMARY 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Ending 
                 Equity 
                 Total 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 5.26% 
                 56,008 
                 28,004 
                   
                 2.63% 
                 32,865 
                 32,865 
                   
                 0.00% 
                 0 
                 160,066 
               
               
                 Leasing Company 
                 1.05% 
                 11,202 
                 5,601 
                   
                 0.53% 
                 6,573 
                 6,573 
                   
                 0.00% 
                 0 
                 32,013 
               
               
                 Airline Investors 
                 12.63%  
                 134,419 
                 67,209 
                   
                 6.32% 
                 78,877 
                 78,877 
                   
                 0.00% 
                 0 
                 384,159 
               
               
                 ESOP Education 
                 1.05% 
                 11,202 
                 6,601 
                   
                 0.53% 
                 6,573 
                 6,573 
                   
                 0.00% 
                 0 
                 32,013 
               
               
                 ESOP 
                 80.00%  
                 851,320 
                 0 
                   
                 90.00%  
                 1,123,992 
                 0 
                   
                 100.00%  
                 1,248,880 
                 0 
               
               
                 Total 
                  100% 
                 1,064,150 
                 106,415 
                   
                  100% 
                 1,248,880 
                 124,888 
                   
                  100% 
                 1,248,880 
                 608,252 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 22 
               
               
                 FUEL TRUST PARTICIPATION FOR STOCK 
               
               
                 15% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $ 000 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 ESOP Purchases @ 25% 
                 20,296 
                 9,949 
                 12,210 
                 15,061 
                 18,637 
                 23,044 
                 28,004 
                 32,865 
                 160,066 
               
               
                 Fuel for Stock @ 50% 
                 32,438 
                 10,853 
                 12,481 
                 14,353 
                 16,506 
                 18,982 
                 21,829 
                 25,103 
                 152,544 
               
               
                 Profit on Stock 
                 −12,142 
                 −903 
                 −271 
                 708 
                 2,131 
                 4,062 
                 6,175 
                 7,762 
                 7,522 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 23 
               
               
                 FUEL TRUST RETURN ON INVESTMENT 
               
               
                 15% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 Stock 
                 Beginning 
                 Less: 
                 Add: Int @ 
                 Add: Stock 
                 Ending 
                   
               
               
                 In $000 
                 Share 
                 Balance 
                 Fuel Cost 
                 6.00% 
                 Purchases 
                 Balance 
               
               
                   
               
             
          
           
               
                 Beginning of Trust 
                 25% 
                 32,438 
                   
                   
                   
                 32,438 
                 −32,438 
               
               
                 Year 1 
                   
                 32,438 
                 5,936 
                 1,768 
                   
                 28,270 
                 1768.220354 
               
               
                 Year 2 
                   
                 28,270 
                 7,931 
                 1,458 
                   
                 21,797 
                 1458.280728 
               
               
                 Year 3 
                   
                 21,797 
                 8,807 
                 1,044 
                   
                 14,033 
                 1043.608593 
               
               
                 Year 4 
                   
                 14,033 
                 9,763 
                 549 
                 20,296 
                 25,115 
                 20845.15601 
               
               
                 Year 5 
                   
                 25,115 
                 10,853 
                 1,181 
                 9,949 
                 25,393 
                 278 
               
               
                 Year 6 
                   
                 25,393 
                 12,481 
                 1,149 
                 12,210 
                 26,272 
                 878 
               
               
                 Year 7 
                   
                 26,272 
                 14,353 
                 1,146 
                 15,061 
                 28,126 
                 1,854 
               
               
                 Year 8 
                   
                 28,126 
                 16,506 
                 1,192 
                 18,637 
                 31,449 
                 3,323 
               
               
                 Year 9 
                   
                 31,449 
                 18,982 
                 1,317 
                 23,044 
                 26,829 
                 5,380 
               
               
                 Year 10 
                   
                 36,829 
                 21,829 
                 1,555 
                 28,004 
                 44,559 
                 7,730 
               
               
                 Year 11 
                   
                 44,559 
                 25,103 
                 1,920 
                 32,865 
                 54,241 
                 9,683 
               
               
                 Net to Trust 
                   
                 32,438 
                 152,544 
                 14,281 
                 160,066 
                 54,241 
                 54,241 
               
               
                 Internal Rate of Return 
                   
                   
                   
                   
                   
                 8.34% 
                 8.35% 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 24 
               
               
                 EQUITY INVESTOR&#39;S RETURN ON INVESTMENT 
               
               
                 15% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                   
                 Begin- 
                   
                   
                   
                   
               
               
                   
                 Stock 
                 ning 
                   
                 Stock 
                 Ending 
               
               
                 In $ 000 
                 Share 
                 Balance 
                   
                 Purchases 
                 Balance 
               
               
                   
               
             
          
           
               
                 Begin- 
                 5% 
                 5,000 
                   
                   
                   
                   
                 −5.000 
               
               
                 ning 
               
               
                 Balance 
               
               
                 Year 1 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 2 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 3 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 4 
                   
                 0 
                   
                   
                 4,059 
                 4,059 
                 4059.20526 
               
               
                 Year 5 
                   
                 4,059 
                   
                   
                 1,990 
                 6,049 
                 1,990 
               
               
                 Year 6 
                   
                 6,049 
                   
                   
                 2,442 
                 8,491 
                 2,442 
               
               
                 Year 7 
                   
                 8,491 
                   
                   
                 3,012 
                 11,503 
                 3,012 
               
               
                 Year 8 
                   
                 11,503 
                   
                   
                 3,727 
                 15,231 
                 3,727 
               
               
                 Year 9 
                   
                 15,231 
                   
                   
                 4,609 
                 19,839 
                 4,609 
               
               
                 Year 10 
                   
                 19,839 
                   
                   
                 5,601 
                 25,440 
                 5,601 
               
               
                 Year 11 
                   
                 25,440 
                   
                   
                 6,573 
                 32,013 
                 6,573 
               
               
                 Net to 
                   
                 5,000 
                 0 
                 0 
                 32,013 
                 37,013 
                 32,013 
               
               
                 Trust 
               
               
                 Net to 
                   
                   
                   
                   
                   
                 28.41% 
                 28.41% 
               
               
                 Investor 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 25 
               
               
                 PROJECTED BALANCE SHEET 
               
               
                 10% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
               
               
                   
               
             
          
           
               
                 Assets 
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
               
               
                 Cash 
                 3,040 
                 18,550 
                 32,527 
                 42,086 
                 50,606 
                 59,833 
                 69,869 
                 80,660 
                 92,277 
                 104,888 
                 119,578 
               
               
                 Amounts Receiv- 
                 2,951 
                 4,575 
                 5,063 
                 5,623 
                 6,246 
                 6,869 
                 7,557 
                 8,319 
                 9,162 
                 10,095 
                 11,129 
               
               
                 able 
               
               
                 Stock Loans 
                 3,188 
                 2,125 
                 1,063 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Receivable 
               
               
                 Deposits &amp; Other 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
               
               
                 Assets 
               
               
                 Fixed Assets 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
               
               
                 Depredation &amp; 
                   (286) 
                   (776) 
                 (1,125) 
                 (1,375) 
                 (1,554) 
                 (1,732) 
                 (1,911) 
                 (2,000) 
                 (2,000) 
                 (2,000) 
                 (2,000) 
               
               
                 Amortization 
               
               
                 Total Assets 
                 13,893 
                 29,475 
                 42,527 
                 51,334 
                 60,299 
                 69,969 
                 80,516 
                 91,979 
                 104,438 
                 117,983 
                 133,707 
               
               
                 Liabilities &amp; 
               
               
                 Equity 
               
               
                 Amounts Payable 
                 3,184 
                 4,183 
                 4,499 
                 4,859 
                 5,326 
                 5,756 
                 6,257 
                 6,799 
                 7,387 
                 8,026 
                 8,721 
               
               
                 Loans Payable 
                 9,000 
                 8,000 
                 7,000 
                 6,000 
                 5,000 
                 4,000 
                 3,000 
                 2,000 
                 1,000 
                 0 
                 0 
               
               
                 Capital 
                 15,186 
                 23,118 
                 31,542 
                 40,475 
                 49,973 
                 60,213 
                 71,259 
                 83,179 
                 96,051 
                 109,957 
                 124,986 
               
               
                 Retained Earnings 
                 (13,477) 
                 (5,826) 
                   (514) 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Total Liabilities 
                 13,893 
                 29,475 
                 42,527 
                 51,334 
                 60,299 
                 69,969 
                 80,516 
                 91,979 
                 104,438 
                 117,983 
                 133,707 
               
               
                 &amp; Equity 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 26 
               
               
                 PROJECTED INCOME &amp; CASH FLOW STATEMENT 
               
               
                 10% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Revenue 
               
               
                 Passenger 
                 67,951 
                 105,355 
                 116,593 
                 129,477 
                 143,842 
                 158,183 
               
               
                 Cargo 
                 2,718 
                 4,214 
                 4,664 
                 5,179 
                 5,754 
                 6,327 
               
               
                 Other 
                 162 
                 240 
                 254 
                 291 
                 320 
                 345 
               
               
                 Total Revenue 
                 70,832 
                 109,809 
                 121,521 
                 134,948 
                 149,918 
                 154,855 
               
               
                 Expenses 
               
               
                 Payroll 
                 13,017 
                 15,334 
                 17,029 
                 18,848 
                 20,472 
                 22,734 
               
               
                 Benefits &amp; Taxes 
                 3,429 
                 4,032 
                 4,428 
                 4,848 
                 5,323 
                 5,911 
               
               
                 Flight Operations 
                 3,487 
                 4,238 
                 3,760 
                 4,037 
                 4,349 
                 4,888 
               
               
                 Fuel 
                 12,335 
                 18,481 
                 17,508 
                 18,561 
                 19,738 
                 21,278 
               
               
                 Maintenance 
                 7,885 
                 10,834 
                 11,853 
                 12,945 
                 14,177 
                 15,285 
               
               
                 Aircraft Rental 
                 10,920 
                 14,040 
                 14,820 
                 14,820 
                 18,380 
                 17,160 
               
               
                 Inflight 
                 2,750 
                 4,099 
                 4,628 
                 5,225 
                 5,901 
                 6,382 
               
               
                 Customer Service 
                 10,108 
                 13,640 
                 14,958 
                 16,379 
                 17,982 
                 19,387 
               
               
                 Reservations 
                 709 
                 1,050 
                 1,187 
                 1,384 
                 1,518 
                 1,636 
               
               
                 Marketing 
                 9,007 
                 13,890 
                 15,384 
                 17,094 
                 19,004 
                 20,458 
               
               
                 Administration 
                 2,970 
                 2,961 
                 2,660 
                 2,937 
                 3,246 
                 3,499 
               
               
                 Total Expenses 
                 76,597 
                 100,619 
                 108,212 
                 116,857 
                 128,086 
                 138,426 
               
               
                 Operating Profit 
                 (5,766) 
                 9,190 
                 13,309 
                 18,089 
                 21,830 
                 26,426 
               
               
                 Less Expenses paid by others 
               
               
                 Fuel Trust 
                 5,936 
                 7,931 
                 8,425 
                 8,933 
                 9,498 
                 10,240 
               
               
                 State Quality Jobs Credit 1.0% 
                 551 
                 767 
                 851 
                 932 
                 1,024 
                 1,137 
               
               
                 State Jobs Training Program 
                 191 
                 238 
                 245 
                 253 
                 261 
                 274 
               
               
                 Net Operating Profit 
                 1,012 
                 18,126 
                 22,630 
                 29,201 
                 32,512 
                 35,229 
               
               
                 B&amp;I Loan Interest Expense @ 0.5% 
                   (914) 
                   (819) 
                   (724) 
                   (829) 
                   (534) 
                   (439) 
               
               
                 Pre-Start Expendetures (Net) 
                 (3,036) 
               
               
                 Depreciation/Amortization 
                   (286) 
                   (490) 
                   (350) 
                   (250) 
                   (179) 
                   (178) 
               
               
                 ESOP Stock Loan Interest Income 6.0% 
                 404 
                 303 
                 202 
                 101 
               
               
                 Interest Income @ 6.0% 
                 0 
                 91 
                 556 
                 954 
                 1,221 
                 1,258 
               
               
                 Pre-Contribution Earnings 
                 (2,820) 
                 17,211 
                 22,514 
                 28,383 
                 33,120 
                 38,717 
               
               
                 Fuel Trust Contribution 
                 (5,936) 
                 (7,931) 
                 (8,425) 
                 (8,933) 
                 (9,496) 
                 (10,240)  
               
               
                 ESOP PWR Contribution 25.0% 
                 (3,254) 
                 (3,833) 
                 (4,257) 
                 (4,662) 
                 (5,118) 
                 (5,683) 
               
               
                 ESOP Interest Deduction 
                   (404) 
                   (303) 
                   (202) 
                   (101) 
                 (2,762) 
                 (3,781) 
               
               
                 ESOP Principal Deduction 
                 (1,063) 
                 (1,063) 
                 (1,063) 
                 (1,063) 
                 (4,603) 
                 (6,728) 
               
               
                 Taxable Income 
                 (13,477)  
                 4,081 
                 8,568 
                 13,625 
                 11,139 
                 12,304 
               
               
                 Income Taxes @ 38.0% 
                 0 
                 3,571 
                 (3,256) 
                 (5,1768) 
                 (4,733) 
                 (4,676) 
               
               
                 Net After Tax Income 
                 (13,477)  
                 7,651 
                 5,312 
                 8,448 
                 6,906 
                 7,629 
               
               
                 Accounts Receivable 
                 (2,951) 
                 (1,624) 
                   (488) 
                   (559) 
                   (624) 
                   (822) 
               
               
                 B&amp;I Loan 
                 10,000 
               
               
                 B&amp;I Loan Repayment 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                 (1,000) 
               
               
                 Capital Contribution 
                 5,000 
               
               
                 Fuel Trust Contribution 
                 5,936 
                 7,931 
                 8,425 
                 8,933 
                 9,498 
                 10,240 
               
               
                 ESOP Capital Contribution 
                 4,250 
               
               
                 ESOP Stock Loan 
                 (4,250) 
               
               
                 ESOP Stock Loan Repayment 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
               
               
                 Deposits &amp; Other Assets 
                 (3,000) 
               
               
                 Other Assets 
                 (2,000) 
                   
                 0 
               
               
                 Depreciation/Amortization 
                 286 
                 490 
                 350 
                 250 
                 179 
                 178 
               
               
                 Accounts Payable 
                 3,184 
                 999 
                 316 
                 350 
                 468 
                 430 
               
               
                 ESOP After Tax Dividends 
                 0 
                 0 
                 0 
                 (7,934) 
                 (6,908) 
                 (7,629) 
               
               
                 Cash Flow 
                 3,040 
                 15,510 
                 13,977 
                 9,559 
                 8,520 
                 9,226 
               
               
                 Cumulative Cash Flow 
                 3,040 
                 18,550 
                 32,527 
                 42,086 
                 50,606 
                 59,833 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Revenue 
               
               
                 Passenger 
                 174,041 
                 191,587 
                 211,008 
                 232,513 
                 256,337 
                 1,786,687 
               
               
                 Cargo 
                 6,962 
                 7,663 
                 8,440 
                 9,301 
                 10,253 
                 71,475 
               
               
                 Other 
                 372 
                 401 
                 433 
                 488 
                 506 
                 3,802 
               
               
                 Total Revenue 
                 181,375 
                 199,652 
                 219,881 
                 242,282 
                 267,096 
                 1,862,165 
               
               
                 Expenses 
               
               
                 Payroll 
                 25,258 
                 28,077 
                 31,256 
                 34,748 
                 38,682 
                 265,220 
               
               
                 Benefits &amp; Taxes 
                 6,567 
                 7,300 
                 8,119 
                 9,034 
                 10,057 
                 69,047 
               
               
                 Flight Operations 
                 5,057 
                 5,458 
                 5,893 
                 6,367 
                 6,881 
                 54,196 
               
               
                 Fuel 
                 22,952 
                 24,770 
                 26,748 
                 28,895 
                 31,230 
                 240,491 
               
               
                 Maintenance 
                 16,487 
                 17,794 
                 19,213 
                 20,756 
                 22,434 
                 189,863 
               
               
                 Aircraft Rental 
                 18,720 
                 20,280 
                 21,840 
                 23,400 
                 24,960 
                 197,340 
               
               
                 Inflight 
                 5,863 
                 7,408 
                 7,997 
                 8,640 
                 9,338 
                 59,708 
               
               
                 Customer Service 
                 20,912 
                 22,589 
                 24,389 
                 26,326 
                 28,456 
                 215,084 
               
               
                 Reservations 
                 1,765 
                 1,905 
                 2,057 
                 2,222 
                 2,402 
                 17,816 
               
               
                 Marketing 
                 22,100 
                 23,851 
                 25,754 
                 27,822 
                 30,072 
                 224,486 
               
               
                 Administration 
                 3,775 
                 4,074 
                 4,300 
                 4,752 
                 5,136 
                 40,425 
               
               
                 Total Expenses 
                 150,457 
                 163,484 
                 177,614 
                 192,960 
                 209,647 
                 1,582,962 
               
               
                 Operating Profit 
                 30,918 
                 36,167 
                 42,267 
                 49,322 
                 57,449 
                 299,203 
               
               
                 Less Expenses paid by others 
               
               
                 Fuel Trust 
                 11,046 
                 11,921 
                 12,872 
                 13,905 
                 15,030 
                 115,736 
               
               
                 State Quality Jobs Credit 1.0% 
                 1,263 
                 1,404 
                 1,581 
                 1,737 
                   
                 11,327 
               
               
                 State Jobs Training Program 
                 257 
                 302 
                 317 
                 333 
                 345 
                 3,047 
               
               
                 Net Operating Profit 
                 13,514 
                 49,794 
                 57,017 
                 65,297 
                 17,528 
                 429,313 
               
               
                 B&amp;I Loan Interest Expense @ 0.5% 
                   (344) 
                   (249) 
                   (154) 
                   (59) 
                   
                  (4,869) 
               
               
                 Pre-Start Expendetures (Net) 
                   
                   
                   
                   
                   
                  (3,036) 
               
               
                 Depreciation/Amortization 
                   (179) 
                   (89) 
                   
                   
                   
                  (2,000) 
               
               
                 ESOP Stock Loan Interest Income 6.0% 
                   
                   
                   
                   
                   
                 1,009 
               
               
                 Interest Income @ 6.0% 
                 1,295 
                 1,334 
                 1,374 
                 1,416 
                 1,458 
                 10,958 
               
               
                 Pre-Contribution Earnings 
                 44,256 
                 50,789 
                 58,237 
                 66,654 
                 74,286 
                 431,376 
               
               
                 Fuel Trust Contribution 
                 (11,046)  
                 (11,921)  
                 (12,872)  
                 (13,905)  
                 (15,030)  
                 (115,736)  
               
               
                 ESOP PWR Contribution 25.0% 
                 (6,315) 
                 (7,019) 
                 (7,807) 
                 (8,687) 
                 (9,670) 
                 (56,305) 
               
               
                 ESOP Interest Deduction 
                 (4,893) 
                 (8,153) 
                 (7,558) 
                 (9,124) 
                 (10,568)  
                 (46,126) 
               
               
                 ESOP Principal Deduction 
                 (9,288) 
                 (12,317)  
                 (15,891)  
                 (20,090)  
                 (25,001)  
                 (98,167) 
               
               
                 Taxable Income 
                 12,748 
                 13,380 
                 14,110 
                 14,848 
                 13,218 
                 105,042 
               
               
                 Income Taxes @ 38.0% 
                 (4,844) 
                 (5,084) 
                 (5,382) 
                 (5,642) 
                 (5,213) 
                 (39,016) 
               
               
                 Net After Tax Income 
                 7,903 
                 8,295 
                 8,748 
                 9,206 
                 8,505 
                 65,126 
               
               
                 Accounts Receivable 
                   (568) 
                   (782) 
                   (843) 
                   (933) 
                 (1,034) 
                 (11,129) 
               
               
                 B&amp;I Loan 
                   
                   
                   
                   
                   
                 10,000 
               
               
                 B&amp;I Loan Repayment 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                   
                 (10,000) 
               
               
                 Capital Contribution 
                   
                   
                   
                   
                   
                 5,000 
               
               
                 Fuel Trust Contribution 
                 11,048 
                 11,921 
                 12,872 
                 13,905 
                 15,030 
                 115,738 
               
               
                 ESOP Capital Contribution 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 ESOP Stock Loan 
                   
                   
                   
                   
                   
                 (4,250) 
               
               
                 ESOP Stock Loan Repayment 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 Deposits &amp; Other Assets 
                   
                   
                   
                   
                   
                 (3,000) 
               
               
                 Other Assets 
                   
                   
                   
                   
                   
                 (2,000) 
               
               
                 Depreciation/Amortization 
                 179 
                 89 
                   
                   
                   
                 2,000 
               
               
                 Accounts Payable 
                 501 
                 542 
                 568 
                 639 
                 595 
                 6,721 
               
               
                 ESOP After Tax Dividends 
                 (7,903) 
                 (8,295) 
                 (8,748) 
                 (9,206) 
                 (8,505) 
                 (65,125)  
               
               
                 Cash Flow 
                 10,037 
                 10,791 
                 11,517 
                 12,611 
                 14,690 
                 119,578 
               
               
                 Cumulative Cash Flow 
                 69,869 
                 80,660 
                 92,277 
                 104,888 
                 119,578 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 27 
               
               
                 PROJECTED FUEL SAVINGS 
               
               
                 10% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Gallons (000) 
               
               
                 Boeing 737 
                 15,419 
                 20,601 
                 21,882 
                 23,202 
                 24,670 
                 26,597 
               
               
                 Total 
                 15,419 
                 20,601 
                 21,882 
                 23,202 
                 24,670 
                 26,597 
               
               
                 Price Per Gallon 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
               
               
                 Handling Cost 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
               
               
                 Total 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
               
               
                 Fuel Purchases 
                 12,335 
                 16,481 
                 17,506 
                 18,561 
                 19,736 
                 21,278 
               
               
                 Fuel by Component 
               
               
                 Fuel Cost 
                 11,873 
                 15,863 
                 16,849 
                 17,865 
                 18,996 
                 20,480 
               
               
                 Handling Cost 
                 463 
                 618 
                 656 
                 696 
                 740 
                 798 
               
               
                 Total 
                 12,335 
                 16,481 
                 17,506 
                 18,561 
                 19,736 
                 21,278 
               
               
                 Savings by Year 
                 5,936 
                 7,931 
                 8,425 
                 8,933 
                 9,498 
                 10,240 
               
               
                 Cumulative Savings 
                 5,936 
                 13,868 
                 22,292 
                 31,225 
                 40,723 
                 50,963 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Gallons (000) 
               
               
                 Boeing 737 
                 28,690 
                 30,963 
                 33,433 
                 36,118 
                 39,038 
                 300,613 
               
               
                 Total 
                 28,690 
                 30,963 
                 33,433 
                 36,118 
                 39,038 
                 300,613 
               
               
                 Price Per Gallon 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
               
               
                 Handling Cost 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
                 $0.0300 
               
               
                 Total 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
               
               
                 Fuel Purchases 
                 22,952 
                 24,770 
                 26,746 
                 28,895 
                 31,230 
                 240,491 
               
               
                 Fuel by Component 
               
               
                 Fuel Cost 
                 22,091 
                 23,842 
                 25,743 
                 27,811 
                 30,059 
                 231,472 
               
               
                 Handling Cost 
                 861 
                 929 
                 1,003 
                 1,084 
                 1,171 
                 9,018 
               
               
                 Total 
                 22,952 
                 24,770 
                 26,746 
                 28,895 
                 31,230 
                 240,491 
               
               
                 Savings by Year 
                 11,046 
                 11,921 
                 12,872 
                 13,905 
                 15,030 
                 115,736 
               
               
                 Cumulative Savings 
                 62,009 
                 73,929 
                 86,801 
                 100,707 
                 115,736 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 28 
               
               
                 PROJECTED ESOP INCOME &amp; CASH FLOW STATEMENT 
               
               
                 10% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 3,181 
                 7,123 
                 11,718 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 3,254 
                 3,833 
                 4,257 
                 4,662 
                 5,118 
                 5,683 
               
               
                 Interest Reimbursement 
                 404 
                 303 
                 202 
                 101 
                 2,762 
                 3,761 
               
               
                 Stockholder Stock Loans 
                 0 
                 0 
                 0 
                 46,029 
                 21,253 
                 25,594 
               
               
                 Pre - Tax Dividend Income 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
                 4,603 
                 6,728 
               
               
                 After Tax Dividend Income 
                 0 
                 0 
                 0 
                 7,934 
                 6,906 
                 7,629 
               
               
                 Interest Income @ 6% 
                 0 
                 191 
                 427 
                 703 
                 0 
                 0 
               
               
                 Total Sources of Funds 
                 4,721 
                 5,390 
                 5,949 
                 60,491 
                 40,642 
                 49,395 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 0 
                 0 
                 0 
                 70,950 
                 33,120 
                 38,717 
               
               
                 Administration @ 2% 
                 73 
                 83 
                 89 
                 95 
                 158 
                 189 
               
               
                 Initial Stock Purchase 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
               
               
                 Interest On Initial Stock Purchase 
                 404 
                 303 
                 202 
                 101 
               
               
                 Loan Repayment Over 10 Years Stockholder Stock Loans 
                   
                   
                   
                   
                 4,603 
                 6,728 
               
               
                 Interest Expense @ 6% Sockholder Stock Loans 
                   
                   
                   
                   
                 2,762 
                 3,761 
               
               
                 Total Uses of Funds 
                 1,539 
                 1,448 
                 1,354 
                 72.209 
                 40,642 
                 49,395 
               
               
                 Ending Cash Balance 
                 3,181 
                 7,123 
                 11,718 
                 0 
                 0 
                 0 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 6,315 
                 7,019 
                 7,807 
                 8,687 
                 9,670 
                 66,305 
               
               
                 Interest Reimbursement 
                 4,893 
                 6,153 
                 7,558 
                 9,124 
                 10,866 
                 46,126 
               
               
                 Stockholder Stock Loans 
                 30,293 
                 35,738 
                 41,990 
                 49,118 
                 56,521 
                 306,535 
               
               
                 Pre - Tax Dividend Income 
                 9,288 
                 12,317 
                 15,891 
                 20,090 
                 25,001 
                 98,167 
               
               
                 After Tax Dividend Income 
                 7,903 
                 8,295 
                 8,748 
                 9,206 
                 8,505 
                 65,126 
               
               
                 Interest Income @ 6% 
                 0 
                 0 
                 0 
                 0 
                 0 
                 1,321 
               
               
                 Total Sources of Funds 
                 58,690 
                 69,522 
                 81,993 
                 96,224 
                 110,564 
                 583,581 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 44,286 
                 50,789 
                 58,237 
                 66,654 
                 74,286 
                 437,039 
               
               
                 Administration @ 2% 
                 224 
                 263 
                 307 
                 356 
                 411 
                 2,249 
               
               
                 Initial Stock Purchase 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 Interest On Initial Stock Purchase 
                   
                   
                   
                   
                   
                 1,009 
               
               
                 Loan Repayment Over 10 Years Stockholder Stock Loans 
                 9,288 
                 12,317 
                 15,891 
                 20,090 
                 25,001 
                 93,917 
               
               
                 Interest Expense @ 6% Sockholder Stock Loans 
                 4,893 
                 6,153 
                 7,558 
                 9,124 
                 10,866 
                 45,116 
               
               
                 Total Uses of Funds 
                 58,690 
                 69,522 
                 81,993 
                 96,224 
                 110,564 
                 583,581 
               
               
                 Ending Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 29 
               
               
                 ESOP PURCHASE SCHEDULE 
               
               
                 10% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 YEAR 4 
                   
                 YEAR 5 
                   
                 YEAR 6 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 25% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 25.00%  
                 70,950 
                 18,671 
                   
                 18.42% 
                 61,011 
                 8,716 
                   
                 15.79% 
                 61,132 
                 10,189 
               
               
                 Leasing Company 
                 5.00% 
                 14,190 
                 3,734 
                   
                  3.68% 
                 12,202 
                 1,743 
                   
                  3.16% 
                 12,226 
                 2,038 
               
               
                 Airline Investors 
                 60.00%  
                 170,280 
                 44,811 
                   
                 44.21% 
                 146,425 
                 20,918 
                   
                 37.89% 
                 146,717 
                 24,453 
               
               
                 ESOP Education 
                 5.00% 
                 14,190 
                 3,734 
                   
                  3.68% 
                 12,202 
                 1,743 
                   
                  3.16% 
                 12,226 
                 2,038 
               
               
                 ESOP 
                 5.00% 
                 14,190 
                 0 
                   
                 30.00% 
                 99,360 
                 0 
                   
                 40.00% 
                 154,868 
                 0 
               
               
                 Total 
                  100% 
                 283,800 
                 70,950 
                   
                   100% 
                 331,200 
                 33,120 
                   
                   100% 
                 387,170 
                 38,717 
               
               
                   
               
             
          
           
               
                   
                 YEAR 7 
                   
                 YEAR 8 
                   
                 YEAR 9 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 13.16% 
                 58,271 
                 11,654 
                   
                 10.53% 
                 53,462 
                 13,766 
                   
                 7.89% 
                 45,977 
                 15,326 
               
               
                 Leasing Company 
                  2.63% 
                 11,654 
                 2,331 
                   
                  2.11% 
                 10,692 
                 2,673 
                   
                 1.58% 
                 9,195 
                 3,065 
               
               
                 Airline Investors 
                 31.58% 
                 139,851 
                 27,970 
                   
                 25.26% 
                 128,309 
                 32,077 
                   
                 18.95%  
                 110,344 
                 36,781 
               
               
                 ESOP Education 
                  2.63% 
                 11,654 
                 2,331 
                   
                  2.11% 
                 10,692 
                 2,673 
                   
                 1.56% 
                 9,195 
                 3,065 
               
               
                 ESOP 
                 50.00% 
                 221,430 
                 0 
                   
                 60.00% 
                 304,734 
                 0 
                   
                 70.00%  
                 407,659 
                 0 
               
               
                 Total 
                   100% 
                 442,960 
                 44,286 
                   
                   100% 
                 507,890 
                 50,789 
                   
                  100% 
                 582,370 
                 58,237 
               
               
                   
               
             
          
           
               
                   
                 YEAR 10 
                   
                 YEAR 11 
                   
                 SUMMARY 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Ending 
                 Equity 
                 Total 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 5.26% 
                 35,081 
                 17,541 
                   
                 2.63% 
                 19,549 
                 19,549 
                   
                 0.00% 
                 0 
                 115,010 
               
               
                 Leasing Company 
                 1.05% 
                 7,016 
                 3,508 
                   
                 0.53% 
                 3,910 
                 3,910 
                   
                 0.00% 
                 0 
                 23,002 
               
               
                 Airline Investors 
                 12.63%  
                 84,195 
                 42,097 
                   
                 8.32% 
                 46,917 
                 46,917 
                   
                 0.00% 
                 0 
                 276,025 
               
               
                 ESOP Education 
                 1.05% 
                 7,016 
                 3,508 
                   
                 0.53% 
                 3,910 
                 3,910 
                   
                 0.00% 
                 0 
                 23,002 
               
               
                 ESOP 
                 80.00%  
                 533,232 
                 0 
                   
                 90.00%  
                 668,574 
                 0 
                   
                 100.00%  
                 742,860 
                 0 
               
               
                 Total 
                  100% 
                 666,540 
                 66,654 
                   
                  100% 
                 742,860 
                 74,286 
                   
                  100% 
                 742,860 
                 437,039 
               
               
                   
               
               
                 Equity Value Equals 10 Times Earnings Before Income Taxes and Corporate ESOP Contributions.  
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 30 
               
               
                 FUEL TRUST RETURN ON INVESTMENT 
               
               
                 10% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 Stock 
                 Beginning 
                 Less: 
                 Add: Int @ 
                 Add: Stock 
                 Ending 
                   
               
               
                 In $000 
                 Share 
                 Balance 
                 Fuel Cost 
                 6.00% 
                 Purchases 
                 Balance 
               
               
                   
               
             
          
           
               
                 Beginning of Trust 
                 25% 
                 31,225 
                   
                   
                   
                 31,225 
                 −31,225 
               
               
                 Year 1 
                   
                 31,225 
                 5,936 
                 1,695 
                   
                 26,984 
                 1695.41306 
               
               
                 Year 2 
                   
                 26,984 
                 7,931 
                 1,381 
                   
                 20,434 
                 1381.104996 
               
               
                 Year 3 
                   
                 20,434 
                 8,425 
                 973 
                   
                 12,983 
                 973.2903579 
               
               
                 Year 4 
                   
                 12,983 
                 8,933 
                 511 
                 18,671 
                 23,232 
                 19182.02233 
               
               
                 Year 5 
                   
                 23,232 
                 9,498 
                 1,109 
                 8,716 
                 23,559 
                 327 
               
               
                 Year 6 
                   
                 23,559 
                 10,240 
                 1,106 
                 10,189 
                 24,614 
                 1,055 
               
               
                 Year 7 
                   
                 24,614 
                 11,046 
                 1,145 
                 11,654 
                 26,368 
                 1,754 
               
               
                 Year 8 
                   
                 26,368 
                 11,921 
                 1,224 
                 13.366 
                 29,037 
                 2,669 
               
               
                 Year 9 
                   
                 29,037 
                 12,872 
                 1,356 
                 15,326 
                 32,847 
                 3,810 
               
               
                 Year 10 
                   
                 32,847 
                 13,905 
                 1,554 
                 17,541 
                 38,036 
                 5,189 
               
               
                 Year 11 
                   
                 38,036 
                 15,030 
                 1,831 
                 19,549 
                 44,386 
                 6,351 
               
               
                 Net to Trust 
                   
                 31,225 
                 115,736 
                 13,887 
                 115,010 
                 44,386 
                 44,386 
               
               
                 Internal Rate of Return 
                   
                   
                   
                   
                   
                 5.97% 
                 5.97% 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 31 
               
               
                 FUEL TRUST RETURN ON INVESTMENT 
               
               
                 10% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 Stock 
                 Beginning 
                 Less: 
                 Add: Int @ 
                 Add: Stock 
                 Ending 
                   
               
               
                 In $000 
                 Share 
                 Balance 
                 Fuel Cost 
                 6.00% 
                 Purchases 
                 Balance 
               
               
                   
               
             
          
           
               
                 Beginning of Trust 
                 25% 
                 31,225 
                   
                   
                   
                 31,225 
                 −31,225 
               
               
                 Year 1 
                   
                 31,225 
                 5,936 
                 1,695 
                   
                 26,984 
                 1695.41306 
               
               
                 Year 2 
                   
                 26,984 
                 7,931 
                 1,381 
                   
                 20,434 
                 1381.104996 
               
               
                 Year 3 
                   
                 20,434 
                 8,425 
                 973 
                   
                 12,983 
                 973.2903579 
               
               
                 Year 4 
                   
                 12,983 
                 8,933 
                 511 
                 18,671 
                 23,232 
                 19182.02233 
               
               
                 Year 5 
                   
                 23,232 
                 9,498 
                 1,109 
                 8,716 
                 23,559 
                 327 
               
               
                 Year 6 
                   
                 23,559 
                 10,240 
                 1,106 
                 10,189 
                 24,614 
                 1,055 
               
               
                 Year 7 
                   
                 24,614 
                 11,046 
                 1,145 
                 11,654 
                 26,368 
                 1,754 
               
               
                 Year 8 
                   
                 26,368 
                 11,921 
                 1,224 
                 13,366 
                 29,037 
                 2,669 
               
               
                 Year 9 
                   
                 29,037 
                 12,872 
                 1,356 
                 15,326 
                 32,847 
                 3,810 
               
               
                 Year 10 
                   
                 32,847 
                 13,905 
                 1,554 
                 17,541 
                 38,036 
                 5,189 
               
               
                 Year 11 
                   
                 38,036 
                 15,030 
                 1,831 
                 19,549 
                 44,386 
                 6,351 
               
               
                 Net to Trust 
                   
                 31,225 
                 115,736 
                 13,887 
                 115.010 
                 44,386 
                 44,386 
               
               
                 Internal Rate of Return 
                   
                   
                   
                   
                   
                 5.97% 
                 5.97% 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 31 
               
               
                 EQUITY INVESTOR&#39;S RETURN ON INVESTMENT 
               
               
                 10% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                   
                 Begin- 
                   
                   
                   
                   
               
               
                   
                 Stock 
                 ning 
                   
                 Stock 
                 Ending 
               
               
                 In $ 000 
                 Share 
                 Balance 
                 Purchases 
                 Balance 
               
               
                   
               
             
          
           
               
                 Begin- 
                 5% 
                 5,000 
                   
                   
                   
                   
                 −5,000 
               
               
                 ning 
               
               
                 Balance 
               
               
                 Year 1 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 2 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 3 
                   
                 0 
                   
                   
                   
                   
                 0 
               
               
                 Year 4 
                   
                 0 
                   
                   
                 3,734 
                 3,734 
                 3734.210526 
               
               
                 Year 5 
                   
                 3,734 
                   
                   
                 1,743 
                 5,477 
                 1,743 
               
               
                 Year 6 
                   
                 5,477 
                   
                   
                 2,038 
                 7,515 
                 2,038 
               
               
                 Year 7 
                   
                 7,515 
                   
                   
                 2,331 
                 9,846 
                 2,331 
               
               
                 Year 8 
                   
                 9,846 
                   
                   
                 2,673 
                 12,519 
                 2,673 
               
               
                 Year 9 
                   
                 12,519 
                   
                   
                 3,065 
                 15,584 
                 3,065 
               
               
                 Year 10 
                   
                 15,584 
                   
                   
                 3,508 
                 19,092 
                 3,508 
               
               
                 Year 11 
                   
                 19,092 
                   
                   
                 3,910 
                 23,002 
                 3,910 
               
               
                 Net to 
                   
                 5,000 
                 0 
                 0 
                 23,002 
                 28,002 
                 23,002 
               
               
                 Trust 
               
               
                 Net to 
                   
                   
                   
                   
                   
                 23.80% 
                 23.80% 
               
               
                 Investor 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 32 
               
               
                 PROJECTED BALANCE SHEET 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
               
               
                   
               
             
          
           
               
                 Assets 
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
               
               
                 Cash 
                 3,040 
                 18,550 
                 31,799 
                 40,704 
                 47,702 
                 55,122 
                 62,883 
                 71,043 
                 79,493 
                 88,474 
                 98,878 
               
               
                 Accounts Receiv- 
                 2,951 
                 4,575 
                 4,767 
                 4,993 
                 5,216 
                 5,586 
                 5,983 
                 6,407 
                 6,862 
                 7,349 
                 7,870 
               
               
                 able 
               
               
                 Stock Loans 
                 3,188 
                 2,125 
                 1,063 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Receivable 
               
               
                 Deposits &amp; Other 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
                 3,000 
               
               
                 Assets 
               
               
                 Fixed Assets 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
                 2,000 
               
               
                 Depreciation &amp; 
                   (286) 
                   (776) 
                 (1,125) 
                 (1,375) 
                 (1,554) 
                 (1,732) 
                 (1,911) 
                 (2,000) 
                 (2,000) 
                 (2,000) 
                 (2,000) 
               
               
                 Amortization 
               
               
                 Total Assets 
                 13,893 
                 29.475 
                 41,504 
                 49,321 
                 56,364 
                 63,976 
                 71,955 
                 80,451 
                 89,355 
                 98,823 
                 109,749 
               
               
                 Liabilities &amp; 
               
               
                 Equity 
               
               
                 Accounts Payable 
                 3,184 
                 4,183 
                 4,230 
                 4,341 
                 4,452 
                 4,736 
                 4,971 
                 5,284 
                 5,548 
                 5,893 
                 6,190 
               
               
                 Loans Payable 
                 9,000 
                 8,000 
                 7,000 
                 6,000 
                 5,000 
                 4,000 
                 3,000 
                 2,000 
                 1,000 
                 0 
                 0 
               
               
                 Capital 
                 15,186 
                 23,118 
                 31,049 
                 38,981 
                 46,912 
                 55,240 
                 63,985 
                 73,166 
                 82,807 
                 92,930 
                 103,559 
               
               
                 Retained Earnings 
                 (13,477) 
                 (5,826) 
                   (775) 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Liabilities &amp; 
                 13,893 
                 29,475 
                 41,504 
                 49,321 
                 56,364 
                 63,976 
                 71,955 
                 80,451 
                 89,355 
                 98,823 
                 109,749 
               
               
                 Equity 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 33 
               
               
                 PROJECTED INCOME &amp; CASH FLOW STATEMENT 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Revenue 
               
               
                 Passenger 
                 67,951 
                 105,355 
                 109,769 
                 114,964 
                 120,120 
                 128,548 
               
               
                 Cargo 
                 2,718 
                 4,214 
                 4,391 
                 4,599 
                 4,805 
                 5,146 
               
               
                 Other 
                 162 
                 240 
                 249 
                 258 
                 267 
                 280 
               
               
                 Total Revenue 
                 70,832 
                 109,809 
                 114,408 
                 119,821 
                 125,192 
                 134,075 
               
               
                 Expenses 
               
               
                 Payroll 
                 13,017 
                 15,334 
                 15,832 
                 16,351 
                 16,884 
                 18,260 
               
               
                 Benefits &amp; Taxes 
                 3,429 
                 4,032 
                 4,164 
                 4,300 
                 4,440 
                 4,748 
               
               
                 Flight Operations 
                 3,467 
                 4,238 
                 3,540 
                 3,585 
                 3,631 
                 3,813 
               
               
                 Fuel 
                 12,335 
                 16,481 
                 16,481 
                 16,481 
                 16,481 
                 17,305 
               
               
                 Maintenance 
                 7,885 
                 10,834 
                 11,159 
                 11,494 
                 11,839 
                 12,431 
               
               
                 Aircraft Rental 
                 10,920 
                 14,040 
                 14,040 
                 14,040 
                 14,040 
                 15,600 
               
               
                 Inflight 
                 2,750 
                 4,099 
                 4,357 
                 4,639 
                 4,928 
                 5,174 
               
               
                 Customer Service 
                 10,108 
                 13,640 
                 14,083 
                 14,543 
                 15,018 
                 15.767 
               
               
                 Reservations 
                 709 
                 1,050 
                 1,118 
                 1,212 
                 1,267 
                 1,331 
               
               
                 Marketing 
                 9,007 
                 13,890 
                 14,483 
                 15,178 
                 15,869 
                 16,663 
               
               
                 Administration 
                 2,970 
                 2,981 
                 2,585 
                 2,608 
                 2,710 
                 2,846 
               
               
                 Total Expenses 
                 78,597 
                 100,619 
                 101,761 
                 104.430 
                 107,107 
                 113,938 
               
               
                 Operating Profit 
                 (5,766) 
                 9,190 
                 12,647 
                 15,391 
                 18,085 
                 20,137 
               
               
                 Less Expenses paid by others 
               
               
                 Fuel Trust Contribution 
                 5,936 
                 7,931 
                 7,931 
                 7,931 
                 7,931 
                 8,328 
               
               
                 State Quality Job Credit 5.00% 
                 651 
                 767 
                 792 
                 818 
                 844 
                 913 
               
               
                 State Jobs Training Program 
                 191 
                 238 
                 245 
                 253 
                 261 
                 274 
               
               
                 Net Operating Profit 
                 1,012 
                 18,126 
                 21,615 
                 24,393 
                 27,121 
                 29,651 
               
               
                 B&amp;I Loan Interest Expense @ 9.5% 
                   (914) 
                   (819) 
                   (724) 
                   (629) 
                   (534) 
                   (439) 
               
               
                 Pre-Start Expenditures (Net) 
                 (3.036) 
               
               
                 Depreciation/Amortization 
                   (286) 
                   (490) 
                   (350) 
                   (250) 
                   (179) 
                   (178) 
               
               
                 ESOP Loan Interest Income @ 6.0% 
                 255 
                 191 
                 128 
                 64 
               
               
                 Interest Income @ 6.0% 
                 0 
                 91 
                 556 
                 954 
                 1,221 
                 1,431 
               
               
                 Pre-Contribution Earnings 
                 (2,969) 
                 17,099 
                 21,225 
                 24,531 
                 27,629 
                 30,465 
               
               
                 Fuel Trust Contribution 
                 (5,936) 
                 (7,931) 
                 (7,931) 
                 (7,931) 
                 (7,931) 
                 (8,328) 
               
               
                 ESOP P/R Contribution 25.0% 
                 (3,254) 
                 (3,833) 
                 (3,958) 
                 (4,088) 
                 (4,221) 
                 (4,565) 
               
               
                 ESOP Interest Deduction 
                   (255) 
                   (191) 
                   (128) 
                   (64) 
                 (2,335) 
                 (3,170) 
               
               
                 ESOP Principal Deduction 
                 (1,063) 
                 (1,063) 
                 (1,063) 
                 (1,063) 
                 (3,892) 
                 (5,672) 
               
               
                 Taxable Income 
                 (13,477)  
                 4,081 
                 8,145 
                 11,386 
                 9,250 
                 8,729 
               
               
                 Income Taxes @ 38.0% 
                 0 
                 3,571 
                 (3,095) 
                 (4,327) 
                 (3,515) 
                 (3,317) 
               
               
                 Net After Tax Income 
                 (13,477)  
                 7,651 
                 5.050 
                 7,059 
                 5,735 
                 5,412 
               
               
                 Accounts Receivable 
                 (2,951) 
                 (1,624) 
                   (192) 
                   (226) 
                   (224) 
                   (370) 
               
               
                 B&amp;I Loan 
                 10,000 
               
               
                 B&amp;I Loan Repayment 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                 (1,000) 
               
               
                 Capital Contribution 
                 5,000 
               
               
                 Fuel Trust Corporation 
                 5,936 
                 7,931 
                 7,931 
                 7,931 
                 7,931 
                 8,328 
               
               
                 ESOP Capital Contribution 
                 4,250 
               
               
                 ESOP Stock Loan 
                 (4,250) 
               
               
                 ESOP Stock Loan Repayment 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
               
               
                 Deposits &amp; Other Assets 
                 (3,000) 
               
               
                 Fixed Assets 
                 (2,000) 
               
               
                 Depreciation/Amortization 
                 286 
                 490 
                 350 
                 250 
                 179 
                 178 
               
               
                 Accounts Payable 
                 3,184 
                 999 
                 47 
                 111 
                 111 
                 284 
               
               
                 ESOP After Tax Dividends 
                 0 
                 0 
                 0 
                 (6,284) 
                 (5,735) 
                 (5,412) 
               
               
                 Cash Flow 
                 3,040 
                 15,510 
                 13,250 
                 8,906 
                 6,997 
                 7,420 
               
               
                 Cumulative Cash Flow 
                 3,040 
                 18,550 
                 31,799 
                 40,704 
                 47,702 
                 55,122 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Revenue 
               
               
                 Passenger 
                 137,782 
                 147,565 
                 158,042 
                 169,263 
                 181,281 
                 1,440,739 
               
               
                 Cargo 
                 5,511 
                 5,903 
                 6,322 
                 6,771 
                 7,251 
                 57,630 
               
               
                 Other 
                 294 
                 308 
                 325 
                 341 
                 358 
                 3.083 
               
               
                 Total Revenue 
                 143,588 
                 153,776 
                 164,688 
                 176,374 
                 188,890 
                 1,501,452 
               
               
                 Expenses 
               
               
                 Payroll 
                 19,748 
                 21,358 
                 23,099 
                 24,981 
                 27,017 
                 211,881 
               
               
                 Benefits &amp; Taxes 
                 5,135 
                 5,553 
                 6,006 
                 6,495 
                 7,024 
                 55,325 
               
               
                 Flight Operations 
                 4,004 
                 4,204 
                 4,414 
                 4,635 
                 4,866 
                 44,397 
               
               
                 Fuel 
                 18,170 
                 19,079 
                 20,033 
                 21,034 
                 22,086 
                 195,966 
               
               
                 Maintenance 
                 13,052 
                 13,705 
                 14,390 
                 15,110 
                 15,865 
                 137,766 
               
               
                 Aircraft Rental 
                 15,600 
                 17,160 
                 17,160 
                 18,720 
                 18,720 
                 170,040 
               
               
                 Inflight 
                 5,433 
                 5,705 
                 5,990 
                 6,289 
                 6,604 
                 55,967 
               
               
                 Customer Service 
                 16,555 
                 17,383 
                 18,252 
                 29,165 
                 20,123 
                 174,635 
               
               
                 Reservations 
                 1,397 
                 1,467 
                 1,541 
                 1,618 
                 1,699 
                 14,408 
               
               
                 Marketing 
                 17,496 
                 18,371 
                 19,289 
                 20,254 
                 21,267 
                 181,767 
               
               
                 Administration 
                 2,988 
                 3,138 
                 3,295 
                 3,459 
                 3,632 
                 33,132 
               
               
                 Total Expenses 
                 119,579 
                 127,122 
                 133,468 
                 141,760 
                 148,904 
                 1,275,285 
               
               
                 Operating Profit 
                 24,009 
                 26,654 
                 31,220 
                 34,614 
                 39,986 
                 226,167 
               
               
                 Less Expenses paid by others 
               
               
                 Fuel Trust Contribution 
                 8,744 
                 9,182 
                 9,641 
                 10,123 
                 10,629 
                 94,309 
               
               
                 State Quality Job Credit 5.00% 
                 987 
                 1,068 
                 1,155 
                 1,249 
                   
                 9,243 
               
               
                 State Jobs Training Program 
                 287 
                 302 
                 317 
                 333 
                 349 
                 3,047 
               
               
                 Net Operating Profit 
                 34,028 
                 37,205 
                 42,333 
                 46,318 
                 50,964 
                 332,766 
               
               
                 B&amp;I Loan Interest Expense @ 9.5% 
                   (344) 
                   (249) 
                   (154) 
                 10  (59) 
                   
                 (4,869) 
               
               
                 Pre-Start Expenditures (Net) 
                   
                   
                   
                   
                   
                 (3,036) 
               
               
                 Depreciation/Amortization 
                   (179) 
                   (89) 
                   
                   
                   
                 (2,000) 
               
               
                 ESOP Loan Interest Income @ 6.0% 
                   
                   
                   
                   
                   
                 638 
               
               
                 Interest Income @ 6.0% 
                 1,654 
                 1,886 
                 2,131 
                 2,385 
                 2,654 
                 14,964 
               
               
                 Pre-Contribution Earnings 
                 35,158 
                 38,753 
                 44,309 
                 48,644 
                 53,618 
                 338,464 
               
               
                 Fuel Trust Contribution 
                 (8,744) 
                 (9,582) 
                 (9,641) 
                 (10,123)  
                 (10,629)  
                 (94,309)  
               
               
                 ESOP P/R Contribution 25.0% 
                 (4,937) 
                 (5,339) 
                 (5,775) 
                 (6,245) 
                 (6,754) 
                 (52,970)  
               
               
                 ESOP Interest Deduction 
                 (4,068) 
                 (5,068) 
                 (6,140) 
                 (7,324) 
                 (8,586) 
                 (37,329)  
               
               
                 ESOP Principal Deduction 
                 (7,737) 
                 (10,177)  
                 (12,982)  
                 (16,253)  
                 (19,981)  
                 (80,944)  
               
               
                 Taxable Income 
                 9,672 
                 8,987 
                 9,772 
                 8,698 
                 7,868 
                 72,911 
               
               
                 Income Taxes @ 38.0% 
                 (3,675) 
                 (3,415) 
                 (3,713) 
                 (3,305) 
                 (2,914) 
                 (27,706)  
               
               
                 Net After Tax Income 
                 5,997 
                 5,572 
                 6,058 
                 5,393 
                 4,754 
                 45,205 
               
               
                 Accounts Receivable 
                   (396) 
                   (425) 
                   (455) 
                   (487) 
                   (521) 
                 (7,870) 
               
               
                 B&amp;I Loan 
                   
                   
                   
                   
                   
                 10,000 
               
               
                 B&amp;I Loan Repayment 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                 (1,000) 
                   
                 (10.000)  
               
               
                 Capital Contribution 
                   
                   
                   
                   
                   
                 5.000 
               
               
                 Fuel Trust Corporation 
                 8,744 
                 9,182 
                 9,641 
                 10,123 
                 10,629 
                 94,309 
               
               
                 ESOP Capital Contribution 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 ESOP Stock Loan 
                   
                   
                   
                   
                   
                 (4,250) 
               
               
                 ESOP Stock Loan Repayment 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 Deposits &amp; Other Assets 
                   
                   
                   
                   
                   
                 (3,000) 
               
               
                 Fixed Assets 
                   
                   
                   
                   
                   
                 (2,000) 
               
               
                 Depreciation/Amortization 
                 179 
                 89 
                   
                   
                   
                 2,000 
               
               
                 Accounts Payable 
                 234 
                 314 
                 264 
                 345 
                 297 
                 6,190 
               
               
                 ESOP After Tax Dividends 
                 (5,997) 
                 (5,572) 
                 (6,058) 
                 (5,393) 
                 (4,754) 
                 (45,205) 
               
               
                 Cash Flow 
                 7,761 
                 8,160 
                 8,450 
                 8,981 
                 10,404 
                 98,878 
               
               
                 Cumulative Cash Flow 
                 62,883 
                 71,043 
                 79,493 
                 88,474 
                 98,878 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 34 
               
               
                 PROJECTED FUEL SAVINGS 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Gallons (000) 
               
               
                 Boeing 737 
                 15,419 
                 20,601 
                 20,601 
                 20,601 
                 20,601 
                 21,631 
               
               
                 Total 
                 15,419 
                 20,601 
                 20.601 
                 20,601 
                 20.601 
                 21,631 
               
               
                 Price Per Gallon 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
               
               
                 Handling Cost 
                  0.0300 
                  0.0300 
                  0.0300 
                  0.0300 
                  0.0300 
                  0.0300 
               
               
                 Total 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
               
               
                 Fuel Purchases 
                 12,335 
                 16,481 
                 16,481 
                 16,481 
                 16,481 
                 17,305 
               
               
                 Fuel by Component 
               
               
                 Fuel Cost 
                 11,873 
                 15,863 
                 15,863 
                 15,863 
                 15,863 
                 16,656 
               
               
                 Handling Coat 
                 463 
                 618 
                 618 
                 618 
                 618 
                 649 
               
               
                 Total 
                 12,335 
                 16,481 
                 16,481 
                 16,481 
                 16.481 
                 17,305 
               
               
                 Savings by Year 
                 5,936 
                 7,931 
                 7,931 
                 7,931 
                 7,931 
                 8,328 
               
               
                 Cumulative Savings 
                 5,936 
                 13,868 
                 21,799 
                 29,731 
                 37,662 
                 45,990 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Gallons (000) 
               
               
                 Boeing 737 
                 22,713 
                 23,848 
                 25,041 
                 26,293 
                 27,608 
                 244,958 
               
               
                 Total 
                 22,713 
                 23,848 
                 25,041 
                 26,293 
                 27,608 
                 244,958 
               
               
                 Price Per Gallon 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
                 $0.7700 
               
               
                 Handling Cost 
                  0.0300 
                  0.0300 
                  0.0300 
                  0.0300 
                  0.0300 
               
               
                 Total 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
                 $0.8000 
               
               
                 Fuel Purchases 
                 18,170 
                 19,079 
                 20,033 
                 21,034 
                 22,086 
                 195,966 
               
               
                 Fuel by Component 
               
               
                 Fuel Cost 
                 17,489 
                 18,363 
                 19,281 
                 20,246 
                 21,258 
                 188,618 
               
               
                 Handling Coat 
                 681 
                 715 
                 751 
                 789 
                 828 
                 7,349 
               
               
                 Total 
                 18,170 
                 19,079 
                 20,033 
                 21,034 
                 22,086 
                 195.966 
               
               
                 Savings by Year 
                 8,744 
                 9,182 
                 9,641 
                 10,123 
                 10,629 
                 94,309 
               
               
                 Cumulative Savings 
                 54,735 
                 63,916 
                 73,557 
                 83,680 
                 94,309 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 35 
               
               
                 PROJECTED ESOP INCOME &amp; CASH FLOW STATEMENT 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 1 
                 YEAR 2 
                 YEAR 3 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 3,184 
                 7,128 
                 11,432 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 3,254 
                 3,833 
                 3,958 
                 4,088 
                 4,221 
                 4,565 
               
               
                 Interest Reimbursement 
                 255 
                 191 
                 128 
                 64 
                 2,335 
                 3,170 
               
               
                 Stockholder Stock Loans 
                 0 
                 0 
                 0 
                 38,919 
                 17,804 
                 20,642 
               
               
                 Pre - Tax Dividend Income 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
                 3,892 
                 5,672 
               
               
                 Atter Tax Dividend lncome 
                 0 
                 0 
                 0 
                 6,284 
                 5,735 
                 5,412 
               
               
                 Interst Income @ 6% 
                 0 
                 191 
                 428 
                 686 
                 0 
                 0 
               
               
                 Total Sources of Funds 
                 4,572 
                 5,278 
                 5,576 
                 51,102 
                 33,987 
                 39,462 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 0 
                 0 
                 0 
                 61,325 
                 27,629 
                 30,465 
               
               
                 Administration @ 2% 
                 70 
                 80 
                 82 
                 83 
                 131 
                 155 
               
               
                 Initial Stock Purchase 
                 1,063 
                 1,063 
                 1,063 
                 1,063 
               
               
                 Interest On Initial Stock Purchase 
                 255 
                 191 
                 128 
                 64 
               
               
                 Loan Repayment Over 10 Years Stockholder Stock Loans 
                   
                   
                   
                   
                 3,892 
                 5,672 
               
               
                 Interest Expense @ 6% Stockholder Stock Loans 
                   
                   
                   
                   
                 2,335 
                 3,170 
               
               
                 Total Use of Funds 
                 1,388 
                 1,334 
                 1,272 
                 62,534 
                 33,987 
                 39,462 
               
               
                 Ending Cash Balance 
                 3,164 
                 7,128 
                 11,432 
                 0 
                 0 
                 0 
               
               
                   
               
               
                 In $000 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
               
                 Beginning Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                 Sources of Funds 
               
               
                 Corporate Payroll Contributions 
                 4,937 
                 5,339 
                 5,775 
                 6,245 
                 6,754 
                 52,970 
               
               
                 Interest Reimbursement 
                 4,068 
                 5,068 
                 6,140 
                 7,324 
                 8,586 
                 37,329 
               
               
                 Stockholder Stock Loans 
                 24,404 
                 28,050 
                 32,714 
                 37,277 
                 42,416 
                 242,227 
               
               
                 Pre - Tax Dividend Income 
                 7,737 
                 10,177 
                 12,982 
                 16,253 
                 19,981 
                 80,944 
               
               
                 Atter Tax Dividend lncome 
                 5,997 
                 5,572 
                 6,058 
                 5,393 
                 4,754 
                 45,205 
               
               
                 Interst Income @ 6% 
                 0 
                 0 
                 0 
                 0 
                 0 
                 1,305 
               
               
                 Total Sources of Funds 
                 47,143 
                 54,206 
                 63,670 
                 72,493 
                 82,492 
                 459,980 
               
               
                 Uses of Funds 
               
               
                 Stock Purchases 
                 35,158 
                 38,753 
                 44,309 
                 48,644 
                 53,618 
                 339,901 
               
               
                 Administration @ 2% 
                 180 
                 208 
                 238 
                 271 
                 307 
                 1,806 
               
               
                 Initial Stock Purchase 
                   
                   
                   
                   
                   
                 4,250 
               
               
                 Interest On Initial Stock Purchase 
                   
                   
                   
                   
                   
                 638 
               
               
                 Loan Repayment Over 10 Years Stockholder Stock Loans 
                 7,737 
                 10,177 
                 12,982 
                 16,253 
                 19,981 
                 76,694 
               
               
                 Interest Expense @ 6% Stockholder Stock Loans 
                 4,068 
                 5,068 
                 6,140 
                 7,324 
                 8,588 
                 36,692 
               
               
                 Total Use of Funds 
                 47,143 
                 54,206 
                 63,670 
                 72,493 
                 82,492 
                 459,980 
               
               
                 Ending Cash Balance 
                 0 
                 0 
                 0 
                 0 
                 0 
                 0 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
             
             
               
                 Specimen 36 
               
               
                 ESOP PURCHASE SCHEDULE 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                 YEAR 4 
                   
                 YEAR 5 
                   
                 YEAR 6 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 25% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 25.00%  
                 61,325 
                 16,138 
                   
                 18.42% 
                 50,896 
                 7,271 
                   
                 15.79% 
                 48,103 
                 8,017 
               
               
                 Leasing Company 
                 5.00% 
                 12,265 
                 3,228 
                   
                  3.68% 
                 10,179 
                 1,454 
                   
                  3.16% 
                 9,621 
                 1,603 
               
               
                 Airline Investors 
                 60.00%  
                 147,180 
                 38,732 
                   
                 44.21% 
                 122,149 
                 17,450 
                   
                 37.89% 
                 115,446 
                 19,241 
               
               
                 ESOP Education 
                 5.00% 
                 12,265 
                 3,228 
                   
                  3.68% 
                 10,179 
                 1,454 
                   
                  3.16% 
                 9,621 
                 1,603 
               
               
                 ESOP 
                 5.00% 
                 12,265 
                 0 
                   
                 30.00% 
                 82,887 
                 0 
                   
                 40.00% 
                 121,860 
                 0 
               
               
                 Total 
                  100% 
                 245,300 
                 61,325 
                   
                   100% 
                 276,290 
                 27,629 
                   
                   100% 
                 304,650 
                 30,465 
               
               
                   
               
             
          
           
               
                   
                 YEAR 7 
                   
                 YEAR 8 
                   
                 YEAR 9 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 13.16% 
                 46,261 
                 9,252 
                   
                 10.53% 
                 40,793 
                 10,198 
                   
                 7.89% 
                 34,981 
                 11,660 
               
               
                 Leasing Company 
                  2.63% 
                 9,252 
                 1,850 
                   
                  2.11% 
                 8,159 
                 2,040 
                   
                 1.58% 
                 6,996 
                 2,332 
               
               
                 Airline Investors 
                 31.58% 
                 111,025 
                 22,205 
                   
                 25.26% 
                 97,902 
                 24,476 
                   
                 18.95%  
                 83,954 
                 27,995 
               
               
                 ESOP Education 
                  2.63% 
                 9,252 
                 1,850 
                   
                  2.11% 
                 8,159 
                 2,040 
                   
                 1.58% 
                 6,996 
                 2,332 
               
               
                 ESOP 
                 50.00% 
                 175,790 
                 0 
                   
                 60.00% 
                 232,518 
                 0 
                   
                 70.00%  
                 310,163 
                 0 
               
               
                 Total 
                   100% 
                 351,580 
                 35,158 
                   
                   100% 
                 387,530 
                 38,753 
                   
                  100% 
                 443,090 
                 44,309 
               
               
                   
               
             
          
           
               
                   
                 YEAR 10 
                   
                 YEAR 11 
                   
                 SUMMARY 
               
             
          
           
               
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Beginning 
                 Equity 
                 10% 
                   
                 Ending 
                 Equity 
                 Total 
               
               
                 In $000 
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
                   
                 Ownership 
                 Value 
                 Purchases 
               
               
                   
               
               
                 Fuel Trust Investors 
                 5.26% 
                 25,602 
                 12,801 
                   
                 2.63% 
                 14,110 
                 14,110 
                   
                 0.00% 
                 0 
                 89,448 
               
               
                 Leasing Company 
                 1.05% 
                 5,120 
                 2,560 
                   
                 0.53% 
                 2,822 
                 2,822 
                   
                 0.00% 
                 0 
                 17,890 
               
               
                 Airline Investors 
                 12.63%  
                 61,445 
                 30,723 
                   
                 6.32% 
                 33,864 
                 33,864 
                   
                 0.00% 
                 0 
                 214,674 
               
               
                 ESOP Education 
                 1.05% 
                 5,120 
                 2,560 
                   
                 0.53% 
                 2,822 
                 2,822 
                   
                 0.00% 
                 0 
                 17,890 
               
               
                 ESOP 
                 80.00%  
                 389,152 
                 0 
                   
                 90.00%  
                 482,562 
                 0 
                   
                 100.00%  
                 536,180 
                 0 
               
               
                 Total 
                  100% 
                 486,440 
                 48,644 
                   
                  100% 
                 536,180 
                 53,618 
                   
                  100% 
                 536,180 
                 339,901 
               
               
                   
               
               
                 Equity Value Equals 10 Times Earnings Before Income Taxes and Corporate ESOP Contributions.  
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 38 
               
               
                 FUEL TRUST PARTICIPATION FOR STOCK 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                 In $000 
                 YEAR 4 
                 YEAR 5 
                 YEAR 6 
                 YEAR 7 
                 YEAR 8 
                 YEAR 9 
                 YEAR 10 
                 YEAR 11 
                 TOTAL 
               
               
                   
               
             
          
           
               
                 ESOP Purchases @ 25% 
                 16,138 
                 7,271 
                 8,017 
                 9,252 
                 10,198 
                 11,660 
                 12,801 
                 14,110 
                 89,448 
               
               
                 Fuel for Stock @ 50% 
                 29,731 
                 7,931 
                 8,328 
                 8,744 
                 9,182 
                 9,641 
                 10,123 
                 10,629 
                 94,309 
               
               
                 Prolit on Stock 
                 −13,593 
                 −661 
                 −311 
                 508 
                 1,016 
                 2,020 
                 2,678 
                 3,481 
                 −4,861 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 39 
               
               
                 FUEL TRUST RETURN ON INVESTMENT 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                   
                 Begin- 
                 Less: 
                 Add: 
                 Add: 
                   
               
               
                   
                 Stock 
                 ning 
                 Fuel 
                 Int @ 
                 Stock 
                 Ending 
               
               
                 In $ 000 
                 Share 
                 Balance 
                 Cost 
                 6.00% 
                 Purchases 
                 Balance 
               
               
                   
               
             
          
           
               
                 Begin- 
                 25% 
                 29,731 
                   
                   
                   
                 29,731 
               
               
                 ning of 
               
               
                 Trust 
               
               
                 Year 1 
                   
                 29,731 
                 5,936 
                 1,606 
                   
                 25,400 
               
               
                 Year 2 
                   
                 25,400 
                 7,931 
                 1,286 
                   
                 18,755 
               
               
                 Year 3 
                   
                 18,755 
                 7,931 
                 887 
                   
                 11,711 
               
               
                 Year 4 
                   
                 11,711 
                 7,931 
                 465 
                 16,138 
                 20,382 
               
               
                 Year 5 
                   
                 20,382 
                 7,931 
                 985 
                  7,271 
                 20,706 
               
               
                 Year 6 
                   
                 20,706 
                 8,328 
                 993 
                  8,017 
                 21,388 
               
               
                 Year 7 
                   
                 21,388 
                 8,744 
                 1,021 
                  9,252 
                 22,917 
               
               
                 Year 8 
                   
                 22,917 
                 9,182 
                 1,100 
                 10,198 
                 25,033 
               
               
                 Year 9 
                   
                 25,033 
                 9,641 
                 1,213 
                 11,660 
                 28,265 
               
               
                 Year 10 
                   
                 28,265 
                 10,123 
                 1,392 
                 12,801 
                 32,335 
               
               
                 Year 11 
                   
                 32,335 
                 10,629 
                 1,621 
                 14,110 
                 37,438 
               
               
                 Net to 
                   
                 29,731 
                 94,309 
                 12,568 
                 89,448 
                 37,438 
               
               
                 Trust 
               
               
                 Internal 
                   
                   
                   
                   
                   
                 3.90% 
               
               
                 Rate of 
               
               
                 Return 
               
               
                   
               
             
          
         
       
     
     
       
         
               
             
               
               
               
               
               
               
               
             
               
               
               
               
               
               
               
               
             
           
               
                   
               
               
                 Specimen 40 
               
               
                 EQUITY INVESTOR&#39;S RETURN ON INVESTMENT 
               
               
                 5% GROWTH 50% FUEL PARTICIPATION 
               
             
          
           
               
                   
                   
                 Stock 
                 Beginning 
                   
                 Stock 
                 Ending 
               
               
                   
                 In $ 000 
                 Share 
                 Balance 
                   
                 Purchases 
                 Balance 
               
               
                   
                   
               
             
          
           
               
                   
                 Beginning 
                 5% 
                 5,000 
                   
                   
                   
                   
               
               
                   
                 Balance 
               
               
                   
                 Year 1 
                   
                 0 
               
               
                   
                 Year 2 
                   
                 0 
               
               
                   
                 Year 3 
                   
                 0 
               
               
                   
                 Year 4 
                   
                 0 
                   
                   
                 3,228 
                 3,228 
               
               
                   
                 Year 5 
                   
                 3,228 
                   
                   
                 1,454 
                 4,682 
               
               
                   
                 Year 6 
                   
                 4,682 
                   
                   
                 1,603 
                 6,285 
               
               
                   
                 Year 7 
                   
                 6,285 
                   
                   
                 1,850 
                 8,136 
               
               
                   
                 Year 8 
                   
                 8,136 
                   
                   
                 2,040 
                 10,175 
               
               
                   
                 Year 9 
                   
                 10,175 
                   
                   
                 2,332 
                 12,507 
               
               
                   
                 Year 10 
                   
                 12,507 
                   
                   
                 2,560 
                 15,068 
               
               
                   
                 Year 11 
                   
                 15,068 
                   
                   
                 2,822 
                 17,890 
               
               
                   
                 Net to 
                   
                 5,000 
                 0 
                 0 
                 17,890  
                 22,890 
               
               
                   
                 Investor 
               
               
                   
                 Internal 
                   
                   
                   
                   
                   
                 19.68% 
               
               
                   
                 Rate of 
               
               
                   
                 Return 
               
               
                   
                   
               
             
          
         
       
     
     Whereas, the present invention has been described in relation to the drawings attached hereto, it should be understood that other and further modifications, apart from those shown or suggested herein, may be made within the spirit and scope of this invention.