Document:

Exhibit 10.8

 

PINNACLE AIRLINES CORP.

2003 STOCK INCENTIVE PLAN

 

1.                                      Purpose of the Plan

 

The
purpose of the Plan is to aid the Company and its Affiliates in recruiting and
retaining key employees and directors of outstanding ability and to motivate
such employees and directors to exert their best efforts on behalf of the
Company and its Affiliates by providing incentives through the granting of
Awards.  The Company expects that it
will benefit from the added interest which such key employees, directors will
have in the welfare of the Company as a result of their proprietary interest in
the Company’s success.

 

2.                                      Definitions

 

The
following capitalized terms used in the Plan have the respective meanings set
forth in this Section:

 

(a)                                  Act:  The Securities Exchange Act of 1934, as
amended, or any successor thereto.

 

(b)                                 Affiliate:  With respect to the Company, any entity
directly or indirectly controlling, controlled by, or under common control
with, the Company or any other entity designated by the Board in which the
Company or an Affiliate has an interest.

 

(c)                                  Award:  An Option, Stock Appreciation Right or Other
Stock-Based Award granted pursuant to the Plan.

 

(d)                                 Beneficial
Owner: 
A “beneficial owner”, as such term is defined in Rule 13d-3 under the
Act (or any successor rule thereto).

 

(e)                                  Board:  The Board of Directors of the Company.

 

(f)                                    Change
in Control:  The occurrence of any of the following
events:

 

(i)                                     the
sale or disposition, in one or a series of related transactions, of all or
substantially all, of the assets of the Company to any “person” or “group” (as
such terms are defined in Sections 13(d)(3) or 14(d)(2) of the Act) other than
the Permitted Holders;

 

(ii)                                  any
person or group, other than the Permitted Holders, is or becomes the Beneficial
Owner (except that a person shall be deemed to have “beneficial ownership” of
all shares that any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total voting power of the voting stock of
the Company (or any entity which controls the Company), including by way of
merger, consolidation, tender or exchange offer or otherwise; or

 

 

(iii)                               during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board (together with any new directors whose election by
such Board or whose nomination for election by the shareholders of the Company
was approved by a vote of a majority of the directors of the Company, then
still in office, who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board, then in office.

 

(g)                                 Code:  The Internal Revenue Code of 1986, as
amended, or any successor thereto.

 

(h)                                 Committee:  The Compensation Committee of the Board.

 

(i)                                     Company:  Pinnacle Airlines Corp., a Delaware
corporation.

 

(j)                                     Effective
Date: 
The date the Board approves the Plan, or such later date as is
designated by the Board.

 

(k)                                  Fair
Market Value:  On a given date, (i) if there should be a
public market for the Shares on such date, the arithmetic mean of the high and
low prices of the Shares as reported on such date on the Composite Tape of the
principal national securities exchange on which such Shares are listed or
admitted to trading, or, if the Shares are not listed or admitted on any
national securities exchange, the arithmetic mean of the per Share closing bid
price and per Share closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System (or such market in
which such prices are regularly quoted)(the “NASDAQ”), or, if no sale of
Shares shall have been reported on the Composite Tape of any national
securities exchange or quoted on the NASDAQ on such date, then the immediately
preceding date on which sales of the Shares have been so reported or quoted
shall be used, and (ii) if there should not be a public market for the Shares on
such date, the Fair Market Value shall be the value established by the
Committee in good faith.  Fair Market
Value shall be determined without regard to any restriction other than a
restriction which, by its terms, will never lapse.

 

(l)                                     ISO:  An Option that is also an incentive stock
option granted pursuant to Section 6(c) of the Plan.

 

(m)                               LSAR:  A limited stock appreciation right granted
pursuant to Section 7(d) of the Plan.

 

(n)                                 Other
Stock-Based Awards:  Awards granted pursuant to Section 8 of the
Plan.

 

(o)                                 Option:  A stock option granted pursuant to Section 6
of the Plan.

 

2

 

(p)                                 Option
Price: 
The purchase price per Share of an Option, as determined pursuant to
Section 6(a) of the Plan.

 

(q)                                 Participant:  An employee, director who is selected by the
Committee to participate in the Plan.

 

(r)                                    Permitted
Holder means, as of the date of determination,
any employee benefit plan (or trust forming a part thereof) maintained by (A)
the Company or (B) any corporation or other Person of which a majority of its
voting power of its voting equity securities or equity interest is owned,
directly or indirectly, by the Company.

 

(s)                                  Performance-Based
Awards: 
Certain Other Stock-Based Awards granted pursuant to Section 8(b) of the
Plan.

 

(t)                                    Person:  A “person”, as such term is used for
purposes of Section 13(d) or 14(d) of the Act (or any successor section
thereto).

 

(u)                                 Plan:  The Pinnacle Airlines Corp. 2003 Stock
Incentive Plan.

 

(v)                                 Shares:  Shares of common stock of the Company.

 

(w)                               Stock
Appreciation Right:  A stock appreciation right granted pursuant
to Section 7 of the Plan.

 

(x)                                   Subsidiary:  A subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section thereto).

 

3.                                      Shares Subject to the Plan

 

The
total number of Shares which may be issued under the Plan is 1,152,000.  The employees, or class of employees,
eligible to receive Options shall include officers, employee-directors and
managers.  The Shares may consist, in
whole or in part, of unissued Shares or treasury Shares.  The issuance of Shares or the payment of
cash upon the exercise of an Award or in consideration of the cancellation or
termination of an Award shall reduce the total number of Shares available under
the Plan, as applicable.  Shares which
are subject to Awards which terminate or lapse without the payment of
consideration may be granted again under the Plan.

 

4.                                      Administration

 

The
Plan shall be administered by the Committee, which may delegate its duties and
powers in whole or in part to any subcommittee thereof consisting solely of at
least two individuals who are intended to qualify as “Non-Employee Directors”
within the meaning of Rule 16b-3 under the Act (or any successor rule thereto)
and “outside directors” within the meaning of Section 162(m) of the Code (or
any successor section thereto).  Awards
may, in the discretion of the Committee, be made under the Plan in assumption
of, or in substitution for, outstanding awards previously granted by the
Company or its affiliates or a company acquired by

 

3

 

the
Company or with which the Company combines. 
The number of Shares underlying such substitute awards shall be counted
against the aggregate number of Shares available for Awards under the
Plan.  The Committee is authorized to
interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan.  The Committee may correct any defect or
supply any omission or reconcile any inconsistency in the Plan in the manner
and to the extent the Committee deems necessary or desirable.  Any decision of the Committee in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors). 
The Committee shall have the full power and authority to establish the
terms and conditions of any Award consistent with the provisions of the Plan
and to waive any such terms and conditions at any time (including, without
limitation, accelerating or waiving any vesting conditions).  The Committee shall require payment of any
amount it may determine to be necessary to withhold for federal, state, local
or other taxes as a result of the exercise of an Award.

 

5.                                      Limitations

 

No
Award may be granted under the Plan after the tenth anniversary of the earlier
of the date the Plan is adopted by the Company or the date the Plan is approved
by the shareholders of the Company, but Awards theretofore granted may extend
beyond that date; provided, however, that no ISO may be exercisable for a
period greater than ten years from the date the ISO is granted. No option may
be granted at an exercise price which is less than the Fair Market Value of a
Share on the date the Option is granted.

 

6.                                      Terms and Conditions of Options

 

Options
granted under the Plan shall be, as determined by the Committee, non-qualified
or incentive stock options for federal income tax purposes, as evidenced by the
related Award agreements, and shall be subject to the foregoing and the
following terms and conditions and to such other terms and conditions, not
inconsistent therewith, as the Committee shall determine:

 

(a)                                  Option
Price; Exercisability.  Options granted under the Plan shall have a
Option Price, and shall be exercisable at such time and upon such terms and
conditions, as may be determined by the Committee. No option may be granted at
an exercise price which is less than the Fair Market Value of a Share on the
date the Option is granted.

 

(b)                                 Exercise
of Options.  Except as otherwise provided in the Plan or
in an Award agreement, an Option may be exercised for all, or from time to time
any part, of the Shares for which it is then exercisable.  For purposes of Section 6 of the Plan, the
exercise date of an Option shall be the later of the date a notice of exercise
is received by the Company and, if applicable, the date payment is received by
the Company pursuant to clauses (i), (ii) or (iii) in the following
sentence.  The purchase price for the
Shares as to which an Option is exercised shall be paid to the Company in full
at the time of exercise at the election of the Participant (i) in cash or its
equivalent (e.g., by check), (ii) to the extent permitted by the Committee, in
Shares having a Fair Market Value equal to the aggregate Option

 

4

 

Price for the Shares being purchased and
satisfying such other requirements as may be imposed by the Committee;
provided, that such Shares have been held by the Participant for no less than
six months (or such other period as established from time to time by the
Committee in order to avoid adverse accounting treatment applying generally
accepted accounting principles), (iii) partly in cash and, to the extent
permitted by the Committee, partly in such Shares or (iv) through the delivery
of irrevocable instructions to a broker to sell Shares obtained upon the
exercise of the Option and to deliver promptly to the Company an amount out of
the proceeds of such Sale equal to the aggregate option price for the Shares being
purchased.  No Participant shall have
any rights to dividends or other rights of a stockholder with respect to Shares
subject to an Option until the Participant has given written notice of exercise
of the Option, paid in full for such Shares and, if applicable, has satisfied
any other conditions imposed by the Committee pursuant to the Plan.

 

(c)                                  ISOs.  The Committee may grant Options under the
Plan that are intended to be ISOs.  Such
ISOs shall comply with the requirements of Section 422 of the Code (or any
successor section thereto).  No ISO may
be granted to any individual who is not, at the time of grant, an employee of
the Company or a parent or subsidiary of the Company within the contemplation
of Section 422(b) of the Code.  No ISO
may be granted at an Option Price which is less than the Fair Market Value of a
Share on the date the ISO is granted. 
No ISO may be granted to the extent that the aggregate Fair Market Value
at grant of the stock with respect to which the ISO is first exercisable in any
calendar year (under all plans of the Company or any parent or subsidiary
thereof) exceeds $100,000  (for this
purpose, Options shall be taken into account in the order granted).  No ISO may be granted to any Participant who
at the time of such grant, owns more than ten percent of the total combined
voting power of all classes of stock of the Company or of any Subsidiary,
unless (i) the Option Price for such ISO is at least 110% of the Fair Market
Value of a Share on the date the ISO is granted and (ii) the date on which such
ISO terminates is a date not later than the day preceding the fifth anniversary
of the date on which the ISO is granted. 
No ISO may be granted under the terms of which the Option is transferable
other than by will or the laws of descent and distribution, nor which is
exercisable during his lifetime other than by him.  No ISO will be granted unless, by its terms, it is to be treated
as an ISO.  No ISO may be granted unless
the Plan is approved by the shareholders of the Company within twelve months
before or after the Plan is adopted.  No
ISO may be granted after an amendment to the Plan which increases the number of
shares which may be issued under Options or which changes the employees or classes
of employees eligible to receive Options unless such amendment is approved by
the shareholders of the Company.  Any
Participant who disposes of Shares acquired upon the exercise of an ISO either
(i) within two years after the date of grant of such ISO or (ii) within one
year after the transfer of such Shares to the Participant, shall notify the
Company of such disposition and of the amount realized upon such
disposition.  All Options granted under
the Plan are intended to be

 

5

 

nonqualified stock options, unless the
applicable Award Agreement expressly states that the Option is intended to be
an ISO.  If an Option is intended to be
an ISO, and if for any reason such Option (or portion thereof) shall not qualify
as an ISO, then, to the extent of such nonqualification, such Option (or
portion thereof) shall be regarded as a nonqualified stock option granted under
the Plan; provided that such Option (or potion thereof) otherwise
complies with the Plan’s requirements relating to nonqualified stock options.  In no event shall any member of the
Committee, the Company or any of its Affiliates (or their respective employees,
officers or directors) have any liability to any Participant (or any other
Person) due to the failure of an Option to qualify for any reason as an ISO.

 

(d)                                 Attestation.  Wherever in this Plan or any agreement
evidencing an Award a Participant is permitted to pay the exercise price of an
Option or taxes relating to the exercise of an Option by delivering Shares, the
Participant may, subject to procedures satisfactory to the Committee, satisfy
such delivery requirement by presenting proof of beneficial ownership of such
Shares, in which case the Company shall treat the Option as exercised without
further payment and shall withhold such number of Shares from the Shares
acquired by the exercise of the Option.

 

7.                                      Terms and Conditions of Stock Appreciation Rights

 

(a)                                  Grants.  The Committee also may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock Appreciation Right
in connection with an Option, or a portion thereof.  A Stock Appreciation Right granted pursuant to clause (ii) of the
preceding sentence (A) may be granted at the time the related Option is granted
or at any time prior to the exercise or cancellation of the related Option, (B)
shall cover the same number of Shares covered by an Option (or such lesser
number of Shares as the Committee may determine) and (C) shall be subject to
the same terms and conditions as such Option except for such additional limitations
as are contemplated by this Section 7 (or such additional limitations as may be
included in an Award agreement).

 

(b)                                 Terms.  The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee.  Each Stock Appreciation Right granted
independent of an Option shall entitle a Participant upon exercise to an amount
equal to (i) the excess of (A) the Fair Market Value on the exercise date of
one Share over (B) the exercise price per Share, times (ii) the number of Shares
covered by the Stock Appreciation Right. 
Each Stock Appreciation Right granted in conjunction with an Option, or
a portion thereof, shall entitle a Participant to surrender to the Company the
unexercised Option, or any portion thereof, and to receive from the Company in
exchange therefore an amount equal to (i) the excess of (A) the Fair Market
Value on the exercise date of one Share over (B) the Option Price per Share,
times (ii) the number of Shares covered by the Option, or portion thereof,
which is surrendered.  The date a notice
of exercise is received by

 

6

 

the Company shall be the exercise date.  Payment shall be made in Shares or in cash,
or partly in Shares and partly in cash (any such Shares valued at such Fair
Market Value), all as shall be determined by the Committee.  Stock Appreciation Rights may be exercised
from time to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares with respect to which the Stock
Appreciation Right is being exercised. 
No fractional Shares will be issued in payment for Stock Appreciation
Rights, but instead cash will be paid for a fraction or, if the Committee
should so determine, the number of Shares will be rounded downward to the next
whole Share.

 

(c)                                  Limitations.  The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability of Stock
Appreciation Rights as it may deem fit.

 

(d)                                 Limited
Stock Appreciation Rights.  The Committee may grant LSARs that are
exercisable upon the occurrence of specified contingent events.  Such LSARs may provide for a different
method of determining appreciation, may specify that payment will be made only
in cash and may provide that any related Awards are not exercisable while such
LSARs are exercisable.  Unless the
context otherwise requires, whenever the term “Stock Appreciation Right”
is used in the Plan, such term shall include LSARs.

 

8.                                      Other Stock-Based Awards

 

(a)                                  Generally.  The Committee, in its sole discretion, may
grant or sell Awards of Shares, Awards of restricted Shares and Awards that are
valued in whole or in part by reference to, or are otherwise based on the Fair
Market Value of, Shares (“Other Stock-Based Awards”).  Such Other Stock-Based Awards shall be in
such form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive, or vest with respect to,
one or more Shares (or the equivalent cash value of such Shares) upon the
completion of a specified period of service, the occurrence of an event and/or
the attainment of performance objectives. 
Other Stock-Based Awards may be granted alone or in addition to any
other Awards granted under the Plan. 
Subject to the provisions of the Plan, the Committee shall determine:
(i) to whom and when Other Stock-Based Awards will be made; (ii) the number of
Shares to be awarded under (or otherwise related to) such Other Stock-Based
Awards; (iii) whether such Other Stock-Based Awards shall be settled in cash,
Shares or a combination of cash and Shares; and (iv) all other terms and
conditions of such Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all Shares so awarded and
issued shall be fully paid and non-assessable).

 

(b)                                 Performance-Based
Awards. 
Notwithstanding anything to the contrary herein, certain Other
Stock-Based Awards granted under this Section 8 may be granted in a manner
which is deductible by the Company under Section 162(m) of the Code (or any
successor section thereto) (“Performance-Based Awards”).  A

 

7

 

Participant’s Performance-Based Award shall be
determined based on the attainment of written performance goals approved by the
Committee for a performance period established by the Committee (i) while the
outcome for that performance period is substantially uncertain and (ii) no more
than 90 days after the commencement of the performance period to which the
performance goal relates or, if less, the number of days which is equal to 25
percent of the relevant performance period. 
The performance goals, which must be objective, shall be based upon one
or more of the following criteria: (i) consolidated earnings before or after
taxes (including earnings before interest, taxes, depreciation and
amortization); (ii) net income; (iii) operating income; (iv) earnings per
Share; (v) book value per Share; (vi) return on shareholders’ equity; (vii)
expense management; (viii) return on investment; (ix) improvements in capital
structure; (x) profitability of an identifiable business unit or product; (xi)
maintenance or improvement of profit margins; (xii) stock price; (xiii) market
share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow; (xvii) working
capital and (xviii) return on assets. 
The foregoing criteria may relate to the Company, one or more of its
Subsidiaries or one or more of its divisions or units, or any combination of
the foregoing, and may be applied on an absolute basis and/or be relative to
one or more peer group companies or indices, or any combination thereof, all as
the Committee shall determine.  In
addition, to the degree consistent with Section 162(m) of the Code (or any
successor section thereto), the performance goals may be calculated without
regard to extraordinary items.  The
Committee shall determine whether, with respect to a performance period, the
applicable performance goals have been met with respect to a given Participant
and, if they have, to so certify and ascertain the amount of the applicable
Performance-Based Award.  No
Performance-Based Awards will be paid for such performance period until such
certification is made by the Committee. 
The amount of the Performance-Based Award actually paid to a given Participant
may be less than the amount determined by the applicable performance goal
formula, at the discretion of the Committee. 
The amount of the Performance-Based Award determined by the Committee
for a performance period shall be paid to the Participant at such time as
determined by the Committee in its sole discretion after the end of such
performance period; provided, however, that a Participant may, if and to the
extent permitted by the Committee and consistent with the provisions of Section
162(m) of the Code, elect to defer payment of a Performance-Based Award.

 

9.                                      Adjustments Upon Certain Events

 

Notwithstanding
any other provisions in the Plan to the contrary, the following provisions
shall apply to all Awards granted under the Plan:

 

(a)                                  Generally.  In the event of any change in the
outstanding Shares after the Effective Date by reason of any Share dividend or
split, reorganization, recapitalization, merger, consolidation, spin-off,
combination or transaction or

 

8

 

exchange of Shares or other corporate exchange,
or any distribution to shareholders of Shares other than regular cash dividends
or any transaction similar to the foregoing, the Committee in its sole
discretion and without liability to any person may make such substitution or
adjustment, if any, as it deems to be equitable, as to (i) the number or kind
of Shares or other securities issued or reserved for issuance pursuant to the
Plan or pursuant to outstanding Awards, (ii) the maximum number of Shares for
which Options or Stock Appreciation Rights may be granted during a calendar
year to any Participant, (iii) the maximum amount of a Performance-Based Award
that may be granted during a calendar year to any Participant, (iv) the Option
Price or exercise price of any Stock Appreciation Right and/or (v) any other
affected terms of such Awards.

 

(b)                                 Change
in Control. In the event
of a Change of Control after the Effective Date, the Committee may, but shall
not be obligated to, (A) cancel such Awards for fair value (as determined in
the sole discretion of the Committee) which, in the case of Options and Stock
Appreciation Rights, may equal the excess, if any, of the Fair Market Value of
the Shares subject to such Options or Stock Appreciation Rights over the
aggregate exercise price of such Options or Stock Appreciation Rights or (B)
provide for the issuance of substitute Awards that will substantially preserve
the otherwise applicable terms of any affected Awards previously granted
hereunder as determined by the Committee in its sole discretion.

 

10.                               No Right to Employment or Awards

 

The
granting of an Award under the Plan shall impose no obligation on the Company
or any Affiliate to continue the employment of, or service relationship with, a
Participant and shall not lessen or affect the Company’s or Affiliate’s right
to terminate the employment of, or service relationship with such
Participant.  No Participant or other
Person shall have any claim to be granted any Award, and there is no obligation
for uniformity of treatment of Participants, or holders or beneficiaries of
Awards.  The terms and conditions of
Awards and the Committee’s determinations and interpretations with respect
thereto need not be the same with respect to each Participant (whether or not
such Participants are similarly situated).

 

11.                               Successors and Assigns

 

The
Plan shall be binding on all successors and assigns of the Company and a
Participant, including without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant’s creditors.

 

12.                               Nontransferability of Awards

 

Unless
otherwise determined by the Committee, an Award shall not be transferable or
assignable by the Participant otherwise than by will or by the laws of descent
and

 

9

 

distribution.  An Award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.

 

13.                               Amendments or Termination

 

The
Board may amend, alter or discontinue the Plan, but no amendment, alteration or
discontinuation shall be made which, (a) without the approval of the
shareholders of the Company, would (except as is provided in Section 9 of the
Plan), increase the total number of Shares reserved for the purposes of the
Plan or change the maximum number of Shares for which Awards may be granted to
any Participant or (b) without the consent of a Participant, would diminish any
of the rights of the Participant under any Award theretofore granted to such
Participant under the Plan; provided, however, that the Committee may amend the
Plan in such manner as it deems necessary to permit the granting of Awards meeting
the requirements of the Code or other applicable laws.

 

14.                               International Participants

 

With
respect to Participants who reside or work outside the United States of America
and who are not (and who are not expected to be) “covered employees” within the
meaning of Section 162(m) of the Code, the Committee may, in its sole
discretion, amend the terms of the Plan or Awards with respect to such
Participants in order to conform such terms with the provisions of local law,
and the Committee may, where appropriate, establish one or more sub-plans to
reflect such amended or varied provisions.

 

15.                               Choice of Law

 

The
Plan shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to conflicts of laws.

 

16.                               Effectiveness of the Plan

 

The
Plan shall be effective as of the Effective Date, subject to the approval of
the shareholders of the Company.

 

10EXHIBIT 10.9

 

 

PINNACLE AIRLINES CORP.

2003 STOCK INCENTIVE PLAN

 

INCENTIVE
STOCK OPTION AGREEMENT

 

THIS AGREEMENT (the “Agreement”), is made effective as of the _____th
day of _____________, 2003, (the “Date of Grant”), between Pinnacle Airlines
Corp., a Delaware corporation (the “Company”), and ___________________ (the
“Participant”):

 

 

R E C I T A L S:

 

WHEREAS, the Company has adopted the Pinnacle Airlines Corp. 2003 Stock
Incentive Plan (the “Plan”), which Plan is incorporated herein by reference and
made a part of this Agreement. 
Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan; and

 

WHEREAS, the Committee has determined that it would be in the best
interests of the Company and its stockholders to grant the option provided for
herein to the Participant pursuant to the Plan and the terms set forth herein.

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties agree as follows:

 

1.   The total number of Shares subject to this option is
_____________________ (________). 
Subject to the limitations contained herein, this option shall vest and
be exercisable with respect to each portion of the shares subject to this
Option as provided in Appendix A hereto.The Option is intended to be a
qualified stock option which complies with Section 422 of the Internal Revenue
Code of 1986, as amended.

 

2. Payment of the exercise
price per share is due in full in cash (including check) upon exercise of all
or any part of each installment which has vested.

 

3.   The minimum number of shares with respect to which this option
may be exercised at any one time is ________________________ (______________),
except:

 

(a)           as to an installment subject to
exercise, as set forth in Appendix A, which amounts to fewer than such number
of Shares, in which case, as to the exercise of that installment, the number of
shares in such installment shall be the minimum number of shares, and

 

(b)           with respect to the final exercise of
this option this minimum shall not apply. 
In no event may this option be exercised for any number of shares which
would require the issuance of anything other than whole shares.

 

  The term of this option commences on the
date hereof and, unless sooner 

 

 

 

 

 

 

terminated
as set forth below or in the Plan, terminates in its entirety on
____________________ (which date shall be no more than                        (       
) years from date this option is granted).

 

4.   Subject to the provisions of the Plan and this Agreement, the
Participant may exercise all or any part of the vested portion of the Option at
any time prior to the earliest to occur of:

 

(a)  the
tenth anniversary of the date of grant;

 

(b) one year following the date of the Participant’s
termination of employment as a result of death or Disability;

 

(c) ninety days following the date of the
Participant’s termination of employment by the Company without Cause (other
than as a result of death or Disability) or by the Participant for any reason;
and

 

(d) the date of the Participant’s termination of
employment by the Company for Cause.

 

For purposes of this Agreement:

 

“Cause” shall mean with respect to the termination
of a Participant’s employment with the Company or any affiliate (i) an act or
acts of personal dishonesty by the Participant intended to result in
substantial personal enrichment of the Participant at the expense of the
Company or an affiliate; (ii) an act or acts of personal dishonesty by the
Participant intended to cause substantial injury to the Company or an affiliate;
(iii) material breach (other than as a result of a Disability) by the
Participant of the Participant’s obligations under the terms and conditions of
the Participant’s employment, which action was (A) undertaken without a
reasonable belief that the action was in the best interest of the Company or an
affiliate and (B) not remedied within a reasonable period of time after receipt
of written notice from the Company or an affiliate specifying the alleged
breach, or (iv) the conviction of the Participant of a felony.

 

“Disability” shall mean the Participant’s physical
or mental condition which prevents continued performance of his or her duties
and for which the Participant establishes by medical evidence that such
condition will be permanent and continuous during the remainder of the
Participant’s life or is likely to be of at least three (3) years’ duration.

 

5.   By exercising this option you agree that:

 

(a)  the Company may require you to enter into an
arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company relating to this Option or Shares issued
thereunder;

 

(b)  you will notify the Company in writing
within fifteen (15) days after the date of any disposition of any of the Shares
issued upon exercise of this Option that

 

 

 

2

 

 

 occurs within two (2) years after the date of
this option grant or within one (1) year after such Shares are transferred upon
exercise of this Option;

 

6.   This option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you.

 

7.   This option is not an employment contract and nothing in this
option shall be deemed to create in any way whatsoever any obligation on your
part to continue in the employ of the Company, or of the Company to continue
your employment with the Company.

 

8.   Any notices provided for in this option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.

 

9.   This Option is subject to all the provisions of the Plan, a copy
of which is attached hereto and its provisions are hereby made a part of this
Option, and is further subject to all interpretations and amendments which may
from time to time be promulgated and adopted pursuant to the Plan.  In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the Plan
shall control.

 

10.   If the Participant’s employment with the
Company is terminated for any reason, the Option shall, to the extent not then
vested, be canceled by the Company without consideration and the vested portion
of the Option shall remain exercisable for the period set forth in Appendix A,
as provided in Section 1.

 

11.  The vested portion of the Option may be
exercised by delivering to the Company at its principal office or its designee
written notice of intent to so exercise; provided  that, the
Option may be exercised with respect to whole Shares only.  Such notice shall specify the number of
Shares for which the Option is being exercised and shall be accompanied by
payment in full of the Option Price. 
The payment of the Option Price shall be made (i) in cash or its
equivalent (e.g., by check), (ii) to the extent permitted by the
Committee, in Shares having a Fair Market Value equal to the aggregate Option
Price for the Shares being purchased and satisfying such other requirements as
may be imposed by the Committee; provided, that such Shares have been held by
the Participant for no less than six months (or such other period as established
from time to time by the Committee in order to avoid adverse accounting
treatment applying generally accepted accounting principles), (iii) partly
in cash and, to the extent permitted by the Committee, partly in such
Shares or (iv) through the delivery of irrevocable instructions to a
broker to sell Shares obtained upon the exercise of the Option and to deliver
promptly to the Company an amount out of the proceeds of such Sale equal to the
aggregate Option Price for the Shares being purchased.  Upon the Company’s determination that the
Option has been validly exercised as to any of the Shares, the Company shall
issue certificates in the Participant’s name for such Shares.  However, the Company shall not be liable to
the Participant for damages relating to any delays in issuing the certificates
to him, any loss of the certificates, or any mistakes or errors in the issuance
of the certificates or in the certificates themselves.  In the event of the Participant’s death, the
Vested Portion of the Option shall remain exercisable by the Participant’s
executor or administrator, or the person or persons to whom the 

 

 

3

 

Participant’s rights under
this Agreement shall pass by will or by the laws of descent and distribution as
the case may be, to the extent set forth in Section 4(b).  Any heir or legatee of the Participant shall
take rights herein granted subject to the terms and conditions hereof.

 

12.   Any Shares purchased by exercise of the
Option shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock
exchange upon which such Shares are listed, and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be put on any
certificates representing such Shares to make appropriate reference to such
restrictions.

 

13.   Except as otherwise provided in the Plan,
the Option may not be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant otherwise than by will or by the
laws of descent and distribution, and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate.  Except as otherwise provided in the Plan, during the
Participant’s lifetime, the Option is exercisable only by the Participant.

 

14. Any notice necessary
under this Agreement shall be addressed to the Company in care of its Secretary
at the principal executive office of the Company and to the Participant at the
address appearing in the personnel records of the Company for the Participant
or to either party at such other address as either party hereto may hereafter
designate in writing to the other.  Any
such notice shall be deemed effective upon receipt thereof by the addressee.

 

15.  Choice of Law.  THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

16.  Signature in Counterparts.  This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

 

 

4

 

 

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement.

 

 

	
  PINNACLE AIRLINES CORP.

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
   

  

 

 

	
  Agreed and acknowledged as

  	
   

  
	
  of the date first above
  written:

  	
   

  
	
   

  	
   

  
	
   

  

 

 

 

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]