Document:

Exhibit 10.1

 

MAC-GRAY
CORPORATION

 

2009
STOCK OPTION AND INCENTIVE PLAN

 

SECTION 1.  GENERAL
PURPOSE OF THE PLAN; DEFINITIONS

 

The name of the plan is the Mac-Gray Corporation 2009 Stock Option and
Incentive Plan (the “Plan”).  The purpose
of the Plan is to encourage and enable the officers, employees, Non-Employee
Directors and other key persons (including consultants and prospective
employees) of Mac-Gray Corporation (the “Company”) and its Subsidiaries upon
whose judgment, initiative and efforts the Company largely depends for the
successful conduct of its business to acquire a proprietary interest in the
Company.  It is anticipated that
providing such persons with a direct stake in the Company’s welfare will assure
a closer identification of their interests with those of the Company and its
stockholders, thereby stimulating their efforts on the Company’s behalf and
strengthening their desire to remain with the Company.

 

The following terms shall be defined as set forth below:

 

“Act” means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.

 

“Administrator” means either the Board or the compensation committee
of the Board or a similar committee performing the functions of the
compensation committee and which is comprised of not less than two Non-Employee
Directors who are independent.

 

“Award” or “Awards,”
except where referring to a particular category of grant under the Plan, shall
include Incentive Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights, Restricted Stock Units, Restricted Stock Awards,
Unrestricted Stock Awards and Dividend Equivalent Rights.

 

“Award Certificate” means a written or electronic document setting forth
the terms and provisions applicable to an Award granted under the Plan.  Each Award Certificate is subject to the
terms and conditions of the Plan.

 

“Board” means the Board of Directors of the
Company.

 

“Code” means the Internal Revenue Code of 1986,
as amended, and any successor Code, and related rules, regulations and
interpretations.

 

“Covered Employee” means an employee who is a “Covered
Employee” within the meaning of Section 162(m) of the Code.

 

“Dividend Equivalent Right” means an Award entitling the grantee to
receive credits based on cash dividends that would have been paid on the shares
of Stock specified in the Dividend Equivalent Right (or other award to which it
relates) if such shares had been issued to and held by the grantee.

 

 

“Effective Date” means the date on which the Plan is
approved by stockholders as set forth in Section 19.

 

“Exchange Act” means the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder.

 

“Fair Market Value” of the Stock on any given date means the
fair market value of the Stock determined in good faith by the Administrator;
provided, however, that if the Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ
Global Market, the New York Stock Exchange or another national securities
exchange, the determination shall be made by reference to market
quotations.  If there are no market
quotations for such date, the determination shall be made by reference to the
last date preceding such date for which there are market quotations.

 

“Incentive Stock Option” means any Stock Option designated and
qualified as an “incentive stock option” as defined in Section 422 of the
Code.

 

“Non-Employee Director” means a member of the Board who is not
also an employee of the Company or any Subsidiary.

 

“Non-Qualified Stock Option” means any Stock Option that is not an
Incentive Stock Option.

 

“Option” or “Stock
Option” means any option to purchase shares of Stock granted
pursuant to Section 5.

 

“Performance-Based Award” means any Restricted Stock Award or
Restricted Stock Units granted to a Covered Employee that is intended to
qualify as “performance-based compensation” under Section 162(m) of
the Code and the regulations promulgated thereunder.

 

“Performance Criteria” means the criteria that the
Administrator selects for purposes of establishing the Performance Goal or
Performance Goals for an individual for a Performance Cycle.  The Performance Criteria (which shall be
applicable to the organizational level specified by the Administrator,
including, but not limited to, the Company or any Subsidiary, a division, an
operating unit or a business segment of the Company or any Subsidiary, or any
combination of the foregoing) that will be used to establish Performance Goals
are limited to the following, any of which may be measured either in absolute
terms or as compared to any prior period, incremental increase or results of a
peer group:  (i) earnings before
interest, taxes, depreciation and amortization, with or without adjustments for
interest expense, capital expenditures and non-recurring, non-operating or
extraordinary items, including on a per share of Stock basis; (ii) return
on equity, assets, capital or investment; (iii) changes in the market
price of the Stock; (iv) economic value-added; (v) total stockholder
returns; (vi) earnings (loss), including on a per share of Stock basis; (vii) revenue
or sales, (viii) cost savings or realization of synergies; (ix) pre-tax
or after-tax profit levels; (x) leverage or other financial ratios, (xi)
market share.

 

“Performance Cycle” means one or more periods of time, which
may be of varying and overlapping durations, as the Administrator may select,
over which the attainment of one or more Performance Criteria will be measured
for the purpose of determining a grantee’s right to and the 

 

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payment of a Restricted Stock Award or Restricted
Stock Units.  Each such period shall not
be less than 12 months.

 

“Performance Goals” means, for a Performance Cycle, the
specific goals established in writing by the Administrator for a Performance
Cycle based upon the Performance Criteria.

 

“Restricted Stock Award” means an Award entitling the recipient
to acquire, at such purchase price (which may be zero) as determined by the
Administrator, shares of Stock subject to such restrictions and conditions as
the Administrator may determine at the time of grant.

 

“Restricted Stock Units” means an Award of phantom stock units to
a grantee.

 

“Sale Event” shall mean (i) the sale of all or substantially
all of the assets of the Company on a consolidated basis to an unrelated person
or entity, (ii) a merger, reorganization or consolidation pursuant to
which the holders of the Company’s outstanding voting securities immediately
prior to such transaction do not own a majority of the outstanding voting
securities of the resulting or successor entity (or its ultimate parent, if
any) immediately upon completion of such transaction, or (iii) the sale of
all of the Stock of the Company to an unrelated person or entity.

 

“Sale Price” means the value as
determined by the Administrator of the consideration payable, or otherwise to
be received by stockholders, per share of Stock pursuant to a Sale Event.

 

“Section 409A” means Section 409A of the Code and the
regulations and other guidance promulgated thereunder.

 

“Stock” means the Common Stock, par value $0.01
per share, of the Company, subject to adjustments pursuant to Section 3.

 

“Stock Appreciation Right” means an Award entitling the recipient
to receive shares of Stock having a value equal to the excess of the Fair
Market Value of the Stock on the date of exercise over the exercise price of
the Stock Appreciation Right multiplied by the number of shares of Stock with
respect to which the Stock Appreciation Right shall have been exercised.

 

“Subsidiary” means any corporation or other entity
(other than the Company) in which the Company has at least a 50 percent
interest, either directly or indirectly.

 

“Ten Percent Owner” means an employee who owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code)
more than 10 percent of the combined voting power of all classes of stock of
the Company or any parent or subsidiary corporation.

 

“Unrestricted Stock Award” means an Award of shares of Stock free
of any restrictions.

 

SECTION 2.  ADMINISTRATION OF PLAN; ADMINISTRATOR
AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS

 

(a)           Administration of
Plan.  The Plan shall be administered
by the Administrator, provided that the amount, timing and terms of the grants
of Awards to Non-Employee Directors 

 

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shall
be determined by the compensation committee or similar committee comprised
solely of Non-Employee Directors.

 

(b)          Powers
of Administrator.  The Administrator
shall have the power and authority to grant Awards consistent with the terms of
the Plan, including the power and authority:

 

(i)            to
select the individuals to whom Awards may from time to time be granted;

 

(ii)           to
determine the time or times of grant, and the extent, if any, of Incentive
Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Restricted Stock Units, Unrestricted Stock Awards and
Dividend Equivalent Rights, or any combination of the foregoing, granted to any
one or more grantees;

 

(iii)          to
determine the number of shares of Stock to be covered by any Award;

 

(iv)          to
determine and modify from time to time the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award, which
terms and conditions may differ among individual Awards and grantees, and to
approve the forms of Award Certificates;

 

(v)           to
accelerate at any time the exercisability or vesting of all or any portion of
any Award provided that the Administrator generally shall not exercise such
discretion to accelerate Awards subject to Sections 7 and 8 except in the event
of the grantee’s death, disability or retirement, or a change in control
(including a Sale Event);

 

(vi)          subject
to the provisions of Section 5(c), to extend at any time the period in
which Stock Options may be exercised; and

 

(vii)         at
any time to adopt, alter and repeal such rules, guidelines and practices for
administration of the Plan and for its own acts and proceedings as it shall
deem advisable; to interpret the terms and provisions of the Plan and any Award
(including related written instruments); to make all determinations it deems
advisable for the administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration of the
Plan.

 

All decisions and interpretations of the Administrator shall be binding
on all persons, including the Company and Plan grantees.

 

(c)           Delegation of
Authority to Grant Awards.  Subject
to applicable law, the Administrator, in its discretion, may delegate to the
Chief Executive Officer of the Company all or part of the Administrator’s
authority and duties with respect to the granting of Awards to individuals who
are (i) not subject to the reporting and other provisions of Section 16
of the Exchange Act and (ii) not Covered Employees.  Any such delegation by the Administrator
shall include a limitation as to the amount of Awards that may be granted
during the period of the delegation and shall contain guidelines as to the
determination of the exercise price and the vesting criteria.  The Administrator may revoke or amend the
terms of a delegation at any time 

 

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but
such action shall not invalidate any prior actions of the Administrator’s
delegate or delegates that were consistent with the terms of the Plan.

 

(d)           Award Certificate.  Awards under the Plan shall be evidenced by
Award Certificates that set forth the terms, conditions and limitations for
each Award which may include, without limitation, the term of an Award and the
provisions applicable in the event employment or service terminates.

 

(e)           Indemnification.  Neither the Board nor the Administrator, nor
any member of either or any delegate thereof, shall be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with the Plan, and the members of the Board and the Administrator
(and any delegate thereof) shall be entitled in all cases to indemnification
and reimbursement by the Company in respect of any claim, loss, damage or
expense (including, without limitation, reasonable attorneys’ fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under the
Company’s articles or bylaws or any directors’ and officers’ liability
insurance coverage which may be in effect from time to time and/or any
indemnification agreement between such individual and the Company.

 

SECTION 3.  STOCK
ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

 

(a)           Stock Issuable.  The maximum number of shares of Stock
reserved and available for issuance under the Plan shall be 1,500,000 shares,
subject to adjustment as provided in this Section 3.  For purposes of this limitation, the shares
of Stock underlying any Awards awarded under this Plan or the Company’s 2005
Stock Option and Incentive Plan that are forfeited, canceled or otherwise
terminated (other than by exercise) shall be added back to the shares of Stock
available for issuance under the Plan. 
Notwithstanding the foregoing, the following shares shall not be added
to the shares authorized for grant under the Plan:  (i) shares tendered or held back upon
exercise of an Option or settlement of an Award to cover the exercise price or
tax withholding, and (ii) shares subject to a Stock Appreciation Right
that are not issued in connection with the stock settlement of the Stock
Appreciation Right upon exercise thereof. 
Subject to such overall limitations, shares of Stock may be issued up to
such maximum number pursuant to any type or types of Award; provided, however,
that Stock Options or Stock Appreciation Rights with respect to no more than
250,000 shares of Stock may be granted to any one individual grantee during any
one calendar year period, and no more than 1,500,000 shares of the Stock may be
issued in the form of Incentive Stock Options. 
The shares available for issuance under the Plan may be authorized but
unissued shares of Stock or shares of Stock reacquired by the Company.

 

(b)           Effect of Awards.  The grant of any full value Award (i.e., an
Award other than an Option or a Stock Appreciation Right) shall be deemed, for
purposes of determining the number of shares of Stock available for issuance
under Section 3(a), as an Award of two shares of Stock for each such share
of Stock actually subject to the Award. 
The grant of an Option or a Stock Appreciation Right shall be deemed,
for purposes of determining the number of shares of Stock available for issuance
under Section 3(a), as an Award for one share of Stock for each such share
of Stock actually subject to the Award. 
Any forfeitures, cancellations or other terminations (other than by
exercise) of such Awards shall be returned to the reserved pool of shares of
Stock under the Plan in the same manner.

 

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(c)           Changes in Stock.  Subject to Section 3(d) hereof, if,
as a result of any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar change in the
Company’s capital stock, the outstanding shares of Stock are increased or
decreased or are exchanged for a different number or kind of shares or other
securities of the Company, or additional shares or new or different shares or
other securities of the Company or other non-cash assets are distributed with
respect to such shares of Stock or other securities, or, if, as a result of any
merger or consolidation, sale of all or substantially all of the assets of the
Company, the outstanding shares of Stock are converted into or exchanged for
securities of the Company or any successor entity (or a parent or subsidiary
thereof), the Administrator shall make an appropriate or proportionate
adjustment in (i) the maximum number of shares reserved for issuance under
the Plan, including the maximum number of shares that may be issued in the form
of Incentive Stock Options, (ii) the number of Stock Options or Stock
Appreciation Rights that can be granted to any one individual grantee and the
maximum number of shares that may be granted under a Performance-Based Award, (iii) the
number and kind of shares or other securities subject to any then outstanding
Awards under the Plan, (iv) the repurchase price, if any, per share
subject to each outstanding Restricted Stock Award, and (v) the exercise
price for each share subject to any then outstanding Stock Options and Stock
Appreciation Rights under the Plan, without changing the aggregate exercise
price (i.e., the exercise price multiplied by the number of Stock Options and
Stock Appreciation Rights) as to which such Stock Options and Stock
Appreciation Rights remain exercisable. 
The Administrator shall also make equitable or proportionate adjustments
in the number of shares subject to outstanding Awards and the exercise price
and the terms of outstanding Awards to take into consideration cash dividends
paid other than in the ordinary course or any other extraordinary corporate
event.  The adjustment by the
Administrator shall be final, binding and conclusive.  No fractional shares of Stock shall be issued
under the Plan resulting from any such adjustment, but the Administrator in its
discretion may make a cash payment in lieu of fractional shares.

 

(d)           Mergers and Other
Transactions.  Except as the
Administrator may otherwise specify with respect to particular Awards in the
relevant Award Certificate, in the case of and subject to the consummation of a
Sale Event, all Options and Stock Appreciation Rights that are not exercisable
immediately prior to the effective time of the Sale Event shall become fully
exercisable as of the effective time of the Sale Event, all other Awards with
time-based vesting, conditions or restrictions shall become fully vested and
nonforfeitable as of the effective time of the Sale Event and all Awards with
conditions and restrictions relating to the attainment of performance goals may
become vested and nonforfeitable in connection with a Sale Event in the
Administrator’s discretion.  Upon the
effective time of the Sale Event, the Plan and all outstanding Awards granted
hereunder shall terminate, unless provision is made in connection with the Sale
Event in the sole discretion of the parties thereto for the assumption or
continuation of Awards theretofore granted by the successor entity, or the
substitution of such Awards with new Awards of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and,
if appropriate, the per share exercise prices, as such parties shall agree
(after taking into account any acceleration hereunder).  In the event of such termination, (i) the
Company shall have the option (in its sole discretion) to make or provide for a
cash payment to the grantees holding Options and Stock Appreciation Rights, in
exchange for the cancellation thereof, in an amount equal to the difference
between (A) the Sale Price multiplied by the number of shares of Stock
subject to outstanding Options and Stock Appreciation Rights (to the extent
then exercisable (after taking into account any acceleration hereunder) at
prices not in 

 

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excess
of the Sale Price) and (B) the aggregate exercise price of all such
outstanding Options and Stock Appreciation Rights; or (ii) each grantee
shall be permitted, within a specified period of time prior to the consummation
of the Sale Event as determined by the Administrator, to exercise all
outstanding Options and Stock Appreciation Rights held by such grantee.

 

(e)           Substitute Awards.  The Administrator may grant Awards under the
Plan in substitution for stock and stock based awards held by employees,
directors or other key persons of another corporation in connection with the
merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation.  The
Administrator may direct that the substitute awards be granted on such terms
and conditions as the Administrator considers appropriate in the circumstances.  Any substitute Awards granted under the Plan
shall not count against the share limitation set forth in Section 3(a).

 

SECTION 4.  ELIGIBILITY

 

Grantees under the Plan will be such full or part-time officers and
other employees, Non-Employee Directors and key persons (including consultants
and prospective employees) of the Company and its Subsidiaries as are selected
from time to time by the Administrator in its sole discretion.

 

SECTION 5.  STOCK OPTIONS

 

Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.

 

Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. 
Incentive Stock Options may be granted only to employees of the Company
or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of
the Code.  To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.

 

(a)           Stock Options.  The Administrator in its discretion may grant
Stock Options to eligible employees, Non-Employee Directors and key persons of
the Company or any Subsidiary.  Stock
Options granted pursuant to this Section 5(a) shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Administrator
shall deem desirable.  If the
Administrator so determines, Stock Options may be granted in lieu of cash
compensation at the optionee’s election, subject to such terms and conditions
as the Administrator may establish.

 

(b)           Exercise Price.  The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5 shall be
determined by the Administrator at the time of grant but shall not be less than
100 percent of the Fair Market Value on the date of grant.  In the case of an Incentive Stock Option that
is granted to a Ten Percent Owner, the option price of such Incentive Stock
Option shall be not less than 110 percent of the Fair Market Value on the grant
date.

 

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(c)                                Option Term. 
The term of each Stock Option shall be fixed by the Administrator, but
no Stock Option shall be exercisable more than ten years after the date the
Stock Option is granted.  In the case of
an Incentive Stock Option that is granted to a Ten Percent Owner, the term of
such Stock Option shall be no more than five years from the date of grant.

 

(d)                               Exercisability; Rights of a Stockholder. 
Stock Options shall become exercisable at such time or times, whether or
not in installments, as shall be determined by the Administrator at or after
the grant date.  The Administrator may at
any time accelerate the exercisability of all or any portion of any Stock
Option.  An optionee shall have the
rights of a stockholder only as to shares acquired upon the exercise of a Stock
Option and not as to unexercised Stock Options.

 

(e)                                Method of Exercise. 
Stock Options may be exercised in whole or in part, by giving written or
electronic notice of exercise to the Company, specifying the number of shares
to be purchased.  Payment of the purchase
price may be made by one or more of the following methods to the extent
provided in the Option Award Certificate:

 

(i)            In cash, by
certified or bank check or other instrument acceptable to the Administrator;

 

(ii)           Through the
delivery (or attestation to the ownership) of shares of Stock that have been
purchased by the optionee on the open market or that have been beneficially owned
by the optionee for at least six months and that are not then subject to
restrictions under any Company plan. 
Such surrendered shares shall be valued at Fair Market Value on the
exercise date;

 

(iii)          By the optionee
delivering to the Company a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company cash or
a check payable and acceptable to the Company for the purchase price; provided
that in the event the optionee chooses to pay the purchase price as so
provided, the optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment procedure; or

 

(iv)          With respect to
Stock Options that are not Incentive Stock Options, by a “net exercise”
arrangement pursuant to which the Company will reduce the number of shares of
Stock issuable upon exercise by the largest whole number of shares with a Fair
Market Value that does not exceed the aggregate exercise price.

 

Payment
instruments will be received subject to collection.  The transfer to the optionee on the records
of the Company or of the transfer agent of the shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from
the optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Company of the full purchase price for
such shares and the fulfillment of any other requirements contained in the
Option Award Certificate or applicable provisions of laws (including the
satisfaction of any withholding taxes that the Company is obligated to withhold
with respect to the optionee).  In the
event an optionee chooses to pay the purchase price by previously-owned shares
of Stock through the attestation method, the number of shares of Stock
transferred to the optionee upon the exercise of the Stock Option shall be net
of the number of attested shares.  In 

 

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the
event that the Company establishes, for itself or using the services of a third
party, an automated system for the exercise of Stock Options, such as a system
using an internet website or interactive voice response, then the paperless exercise
of Stock Options may be permitted through the use of such an automated system.

 

(f)            Annual Limit on Incentive Stock
Options.  To the extent required for “incentive
stock option” treatment under Section 422 of the Code, the aggregate Fair
Market Value (determined as of the time of grant) of the shares of Stock with
respect to which Incentive Stock Options granted under this Plan and any other
plan of the Company or its parent and subsidiary corporations become
exercisable for the first time by an optionee during any calendar year shall
not exceed $100,000.  To the extent that
any Stock Option exceeds this limit, it shall constitute a Non-Qualified Stock
Option.

 

SECTION 6.  STOCK
APPRECIATION RIGHTS

 

(a)           Exercise Price of
Stock Appreciation Rights.  The
exercise price of a Stock Appreciation Right shall not be less than 100 percent
of the Fair Market Value of the Stock on the date of grant.

 

(b)           Grant and
Exercise of Stock Appreciation Rights. 
Stock Appreciation Rights may be granted by the Administrator
independently of any Stock Option granted pursuant to Section 5 of the
Plan.

 

(c)           Terms and
Conditions of Stock Appreciation Rights. 
Stock Appreciation Rights shall be subject to such terms and conditions
as shall be determined from time to time by the Administrator.  The term of a Stock Appreciation Right may
not exceed ten years.

 

SECTION 7.  RESTRICTED
STOCK AWARDS

 

(a)           Nature of
Restricted Stock Awards.  The
Administrator shall determine the restrictions and conditions applicable to
each Restricted Stock Award at the time of grant.  Conditions may be based on continuing
employment (or other service relationship) and/or achievement of
pre-established performance goals and objectives.  The terms and conditions of each such Award
Certificate shall be determined by the Administrator, and such terms and
conditions may differ among individual Awards and grantees.

 

(b)           Rights as a
Stockholder.  Upon the grant of the
Restricted Stock Award and payment of any applicable purchase price, a grantee
shall have the rights of a stockholder with respect to the voting of the
Restricted Stock, subject to such conditions contained in the Restricted Stock
Award Certificate.  Unless the
Administrator shall otherwise determine, (i) uncertificated Restricted
Stock shall be accompanied by a notation on the records of the Company or the
transfer agent to the effect that they are subject to forfeiture until such
Restricted Stock are vested as provided in Section 7(d) below, and (ii) certificated
Restricted Stock shall remain in the possession of the Company until such
Restricted Stock is vested as provided in Section 7(d) below, and the
grantee shall be required, as a condition of the grant, to deliver to the
Company such instruments of transfer as the Administrator may prescribe.

 

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(c)           Restrictions.  Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the Restricted Stock Award Certificate.  Except as may otherwise be provided by the
Administrator either in the Award Certificate or, subject to Section 16
below, in writing after the Award is issued, if a grantee’s employment (or
other service relationship) with the Company and its Subsidiaries terminates
for any reason, any Restricted Stock that has not vested at the time of
termination shall automatically and without any requirement of notice to such
grantee from or other action by or on behalf of, the Company be deemed to have
been reacquired by the Company at its original purchase price (if any) from
such grantee or such grantee’s legal representative simultaneously with such
termination of employment (or other service relationship), and thereafter shall
cease to represent any ownership of the Company by the grantee or rights of the
grantee as a stockholder.  Following such
deemed reacquisition of unvested Restricted Stock that are represented by
physical certificates, a grantee shall surrender such certificates to the
Company upon request without consideration.

 

(d)           Vesting of
Restricted Stock.  The Administrator
at the time of grant shall specify the date or dates and/or the attainment of
pre-established performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company’s right of repurchase
or forfeiture shall lapse. 
Notwithstanding the foregoing, in the event that any such Restricted
Stock granted to employees shall have a performance-based goal, the restriction
period with respect to such shares shall not be less than one year, and in the
event any such Restricted Stock granted to employees shall have a time-based
restriction, the total restriction period with respect to such shares shall not
be less than three years; provided, however, that Restricted Stock with a
time-based restriction may become vested incrementally over such three-year
period.  Subsequent to such date or dates
and/or the attainment of such pre-established performance goals, objectives and
other conditions, the shares on which all restrictions have lapsed shall no
longer be Restricted Stock and shall be deemed “vested.”  Except as may otherwise be provided by the
Administrator either in the Award Certificate or, subject to Section 16
below, in writing after the Award is issued, a grantee’s rights in any shares
of Restricted Stock that have not vested shall automatically terminate upon the
grantee’s termination of employment (or other service relationship) with the
Company and its Subsidiaries and such shares shall be subject to the provisions
of Section 7(c) above.

 

SECTION 8.  RESTRICTED
STOCK UNITS

 

(a)           Nature of
Restricted Stock Units.   The
Administrator shall determine the restrictions and conditions applicable to
each Restricted Stock Unit at the time of grant.  Conditions may be based on continuing employment
(or other service relationship) and/or achievement of pre-established
performance goals and objectives.  The
terms and conditions of each such Award Certificate shall be determined by the
Administrator, and such terms and conditions may differ among individual Awards
and grantees.  Notwithstanding the
foregoing, in the event that any such Restricted Stock Units granted to
employees shall have a performance-based goal, the restriction period with
respect to such Award shall not be less than one year, and in the event any
such Restricted Stock Units granted to employees shall have a time-based
restriction, the total restriction period with respect to such Award shall not
be less than three years; provided, however, that any Restricted Stock Units
with a time-based restriction may become vested incrementally over such
three-year period.  At the end of the
deferral period, the 

 

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Restricted
Stock Units, to the extent vested, shall be settled in the form of shares of
Stock, except that in the case of grants to the Chief Executive Officer, the
Restricted Stock Units may be settled in cash. 
To the extent that an award of Restricted Stock Units is subject to Section 409A,
it may contain such additional terms and conditions as the Administrator shall
determine in its sole discretion in order for such Award to comply with the
requirements of Section 409A.

 

(b)           Election to
Receive Restricted Stock Units in Lieu of Compensation.  The Administrator may, in its sole discretion,
permit a grantee to elect to receive a portion of future cash compensation
otherwise due to such grantee in the form of an award of Restricted Stock
Units.  Any such election shall be made
in writing and shall be delivered to the Company no later than the date
specified by the Administrator and in accordance with Section 409A and
such other rules and procedures established by the Administrator.  Any such future cash compensation that the
grantee elects to defer shall be converted to a fixed number of Restricted
Stock Units based on the Fair Market Value of Stock on the date the
compensation would otherwise have been paid to the grantee if such payment had
not been deferred as provided herein. 
The Administrator shall have the sole right to determine whether and
under what circumstances to permit such elections and to impose such
limitations and other terms and conditions thereon as the Administrator deems
appropriate.  Any Restricted Stock Units
that are elected to be received in lieu of cash compensation shall be fully
vested, unless otherwise provided in the Award Certificate.

 

(c)           Rights as a
Stockholder.  A grantee shall have
the rights as a stockholder only as to shares of Stock acquired by the grantee
upon settlement of Restricted Stock Units; provided, however, that the grantee
may be credited with Dividend Equivalent Rights with respect to the phantom
stock units underlying his Restricted Stock Units, subject to such terms and
conditions as the Administrator may determine.

 

(d)           Termination.  Except as may otherwise be provided by the
Administrator either in the Award Certificate or, subject to Section 16
below, in writing after the Award is issued, a grantee’s right in all
Restricted Stock Units that have not vested shall automatically terminate upon
the grantee’s termination of employment (or cessation of service relationship)
with the Company and its Subsidiaries for any reason.

 

SECTION 9.  UNRESTRICTED
STOCK AWARDS

 

Grant or Sale of Unrestricted Stock.  The Administrator may, in its sole discretion,
grant (or sell at par value or such higher purchase price determined by the
Administrator) an Unrestricted Stock Award under the Plan.  Unrestricted Stock Awards may be granted only
to Non-Employee Directors.

 

SECTION 10.  PERFORMANCE-BASED
AWARDS TO COVERED EMPLOYEES

 

(a)           Performance-Based Awards.  Any employee or other key person providing
services to the Company and who is selected by the Administrator may be granted
one or more Performance-Based Awards in the form of a Restricted Stock Award or
Restricted Stock Units payable upon the attainment of Performance Goals that
are established by the Administrator and relate to one or more of the
Performance Criteria, in each case on a specified date or dates or over any
period or periods determined by the Administrator.  The Administrator shall define in 

 

11

 

an objective
fashion the manner of calculating the Performance Criteria it selects to use
for any Performance Cycle.  Depending on
the Performance Criteria used to establish such Performance Goals, the
Performance Goals may be expressed in terms of overall Company performance or
the performance of a Subsidiary, a division, an operating unit or a business
segment of the Company or any Subsidiary, an individual, or any combination of
the foregoing.  The Administrator, in its
discretion, may adjust or modify the calculation of Performance Goals for such
Performance Cycle in order to prevent the dilution or enlargement of the rights
of an individual (i) in the event of, or in anticipation of, any unusual
or extraordinary corporate item, transaction, event or development, (ii) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or (iii) in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions provided however, that the
Administrator may not exercise such discretion in a manner that would increase
the Performance-Based Award granted to a Covered Employee.  Each Performance-Based Award shall comply
with the provisions set forth below.

 

(b)           Grant of
Performance-Based Awards.  With
respect to each Performance-Based Award granted to a Covered Employee, the
Administrator shall select, within the first 90 days of a Performance Cycle
(or, if shorter, within the maximum period allowed under Section 162(m) of
the Code) the Performance Criteria for such grant, and the Performance Goals
with respect to each Performance Criterion (including a threshold level of
performance below which no amount will become payable with respect to such
Award).  Each Performance-Based Award
will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable performance targets.  The Performance Criteria established by the
Administrator may be (but need not be) different for each Performance Cycle and
different Performance Goals may be applicable to Performance-Based Awards to
different Covered Employees.

 

(c)           Payment of
Performance-Based Awards.  Following
the completion of a Performance Cycle, the Administrator shall meet to review
and certify in writing whether, and to what extent, the Performance Goals for
the Performance Cycle have been achieved and, if so, to also calculate and
certify in writing the amount of the Performance-Based Awards earned for the
Performance Cycle.  The Administrator
shall then determine the actual size of each Covered Employee’s Performance-Based
Award, and, in doing so, may reduce or eliminate the amount of the
Performance-Based Award for a Covered Employee if, in its sole judgment, such
reduction or elimination is appropriate.

 

(d)           Maximum Award
Payable.  The maximum
Performance-Based Award payable to any one Covered Employee under the Plan for
a Performance Cycle is 300,000 shares of Stock (subject to adjustment as
provided in Section 3(c) hereof).

 

SECTION 11.  DIVIDEND
EQUIVALENT RIGHTS

 

(a)           Dividend
Equivalent Rights.  A Dividend
Equivalent Right may be granted hereunder to any grantee as a component of an
award of Restricted Stock Units or Restricted Stock Award or as a freestanding
award.  The terms and conditions of
Dividend Equivalent Rights shall be specified in the Award Certificate.  Dividend equivalents credited to the holder
of a Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in 

 

12

 

additional
shares of Stock, which may thereafter accrue additional equivalents.  Any such reinvestment shall be at Fair Market
Value on the date of reinvestment or such other price as may then apply under a
dividend reinvestment plan sponsored by the Company, if any.  Dividend Equivalent Rights may be settled in
cash or shares of Stock or a combination thereof, in a single installment or
installments.  A Dividend Equivalent
Right granted as a component of an award of Restricted Stock Units or
Restricted Stock Award may provide that such Dividend Equivalent Right shall be
settled upon settlement or payment of, or lapse of restrictions on, such other
Award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other Award.  A Dividend Equivalent Right granted as a component
of a Restricted Stock Units or Restricted Stock Award may also contain terms
and conditions different from such other Award.

 

(b)           Interest
Equivalents.  Any Award under this
Plan that is settled in whole or in part in cash on a deferred basis may provide
in the grant for interest equivalents to be credited with respect to such cash
payment.  Interest equivalents may be
compounded and shall be paid upon such terms and conditions as may be specified
by the grant.

 

(c)           Termination.  Except as may otherwise be provided by the
Administrator either in the Award Certificate or, subject to Section 16
below, in writing after the Award is issued, a grantee’s rights in all Dividend
Equivalent Rights or interest equivalents granted as a component of an award of
Restricted Stock Units or Restricted Stock Award that has not vested shall
automatically terminate upon the grantee’s termination of employment (or
cessation of service relationship) with the Company and its Subsidiaries for
any reason.

 

SECTION 12.  TRANSFERABILITY
OF AWARDS

 

(a)           Transferability.  Except as provided in Section 12(b) below,
during a grantee’s lifetime, his or her Awards shall be exercisable only by the
grantee, or by the grantee’s legal representative or guardian in the event of
the grantee’s incapacity.  No Awards
shall be sold, assigned, transferred or otherwise encumbered or disposed of by
a grantee other than by will or by the laws of descent and distribution or
pursuant to a domestic relations order. 
No Awards shall be subject, in whole or in part, to attachment,
execution, or levy of any kind, and any purported transfer in violation hereof
shall be null and void.

 

(b)           Administrator Action.  Notwithstanding Section 12(a), the
Administrator, in its discretion, may provide either in the Award Certificate
regarding a given Award or by subsequent written approval that the grantee (who
is an employee or director) may transfer his or her Awards (other than any
Incentive Stock Options or Restricted Stock Units) to his or her immediate
family members, to trusts for the benefit of such family members, or to
partnerships in which such family members are the only partners, provided that
the transferee agrees in writing with the Company to be bound by all of the
terms and conditions of this Plan and the applicable Award.  In no event may the Award be transferred by a
grantee for value.

 

(c)           Family Member.  For purposes of Section 12(b), “family
member” shall mean a grantee’s child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the grantee’s

 

13

 

household (other
than a tenant of the grantee), a trust in which these persons (or the grantee)
have more than 50 percent of the beneficial interest, a foundation in which
these persons (or the grantee) control the management of assets, and any other
entity in which these persons (or the grantee) own more than 50 percent of the
voting interests.

 

(d)           Designation of Beneficiary.  Each grantee to whom an Award has been made
under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee’s
death.  Any such designation shall be on
a form provided for that purpose by the Administrator and shall not be
effective until received by the Administrator. 
If no beneficiary has been designated by a deceased grantee, or if the
designated beneficiaries have predeceased the grantee, the beneficiary shall be
the grantee’s estate.

 

SECTION 13.  TAX
WITHHOLDING

 

(a)           Payment by
Grantee.  Each grantee shall, no
later than the date as of which the value of an Award or of any Stock or other
amounts received thereunder first becomes includable in the gross income of the
grantee for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld by
the Company with respect to such income. 
The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the grantee.  The Company’s
obligation to deliver evidence of book entry (or stock certificates) to any
grantee is subject to and conditioned on tax withholding obligations being
satisfied by the grantee.

 

(b)           Payment in Stock.  Subject to approval by the Administrator, a
grantee may elect to have the Company’s minimum required tax withholding
obligation satisfied, in whole or in part, by authorizing the Company to
withhold from shares of Stock to be issued pursuant to any Award a number of
shares with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the withholding amount due.

 

SECTION 14.  SECTION 409A
AWARDS

 

To the extent that any Award is determined to constitute “nonqualified
deferred compensation” within the meaning of Section 409A (a “409A Award”),
the Award shall be subject to such additional rules and requirements as
specified by the Administrator from time to time in order to comply with Section 409A.  In this regard, if any amount under a 409A
Award is payable upon a “separation from service” (within the meaning of Section 409A)
to a grantee who is then considered a “specified employee” (within the meaning
of Section 409A), then no such payment shall be made prior to the date that
is the earlier of (i) six months and one day after the grantee’s
separation from service, or (ii) the grantee’s death, but only to the
extent such delay is necessary to prevent such payment from being subject to
interest, penalties and/or additional tax imposed pursuant to Section 409A.  Further, the settlement of any such Award may
not be accelerated except to the extent permitted by Section 409A.

 

14

 

SECTION 15.  TRANSFER,
LEAVE OF ABSENCE, ETC.

 

For purposes of the Plan, the following events shall not be deemed a
termination of employment:

 

(a)           a transfer to the
employment of the Company from a Subsidiary or from the Company to a
Subsidiary, or from one Subsidiary to another; or

 

(b)           an approved leave of
absence for military service or sickness, or for any other purpose approved by
the Company, if the employee’s right to re-employment is guaranteed either by a
statute or by contract or under the policy pursuant to which the leave of
absence was granted or if the Administrator otherwise so provides in writing.

 

SECTION 16.  AMENDMENTS
AND TERMINATION

 

The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder’s consent.  Except as provided
in Section 3(c) or 3(d), without prior stockholder approval, in no
event may the Administrator exercise its discretion to reduce the exercise
price of outstanding Stock Options or Stock Appreciation Rights, effect
repricing through cancellation and re-grants or cancellation of Stock Options
or Stock Appreciation Rights in exchange for cash.  To the extent required under the rules of
any securities exchange or market system on which the Stock is listed, to the
extent determined by the Administrator to be required by the Code to ensure
that Incentive Stock Options granted under the Plan are qualified under Section 422
of the Code, or to ensure that compensation earned under Awards qualifies as
performance-based compensation under Section 162(m) of the Code, Plan
amendments shall be subject to approval by the Company stockholders entitled to
vote at a meeting of stockholders. 
Nothing in this Section 16 shall limit the Administrator’s
authority to take any action permitted pursuant to Section 3(c) or
3(d).

 

SECTION 17.  STATUS OF
PLAN

 

With respect to the portion of any Award that has not been exercised
and any payments in cash, Stock or other consideration not received by a
grantee, a grantee shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards.  In its sole discretion, the Administrator may
authorize the creation of trusts or other arrangements to meet the Company’s
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

 

SECTION 18.  GENERAL
PROVISIONS

 

(a)           No Distribution.  The Administrator may require each person
acquiring Stock pursuant to an Award to represent to and agree with the Company
in writing that such person is acquiring the shares without a view to
distribution thereof.

 

15

 

(b)           Delivery of Stock
Certificates.  Stock certificates to
grantees under this Plan shall be deemed delivered for all purposes when the
Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the grantee, at the
grantee’s last known address on file with the Company.  Uncertificated Stock shall be deemed
delivered for all purposes when the Company or a Stock transfer agent of the
Company shall have given to the grantee by electronic mail (with proof of
receipt) or by United States mail, addressed to the grantee, at the grantee’s
last known address on file with the Company, notice of issuance and recorded
the issuance in its records (which may include electronic “book entry”
records).  Notwithstanding anything
herein to the contrary, the Company shall not be required to issue or deliver any
certificates evidencing shares of Stock pursuant to the exercise of any Award,
unless and until the Administrator has determined, with advice of counsel (to
the extent the Administrator deems such advice necessary or advisable), that
the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authorities and, if applicable,
the requirements of any exchange on which the shares of Stock are listed,
quoted or traded.  All Stock certificates
delivered pursuant to the Plan shall be subject to any stop-transfer orders and
other restrictions as the Administrator deems necessary or advisable to comply
with federal, state or foreign jurisdiction, securities or other laws, rules and
quotation system on which the Stock is listed, quoted or traded.  The Administrator may place legends on any
Stock certificate to reference restrictions applicable to the Stock.  In addition to the terms and conditions
provided herein, the Administrator may require that an individual make such
reasonable covenants, agreements, and representations as the Administrator, in
its discretion, deems necessary or advisable in order to comply with any such
laws, regulations, or requirements.  The
Administrator shall have the right to require any individual to comply with any
timing or other restrictions with respect to the settlement or exercise of any
Award, including a window-period limitation, as may be imposed in the
discretion of the Administrator.

 

(c)           Stockholder Rights.  Until Stock is deemed delivered in accordance
with Section 18(b), no right to vote or receive dividends or any other
rights of a stockholder will exist with respect to shares of Stock to be issued
in connection with an Award, notwithstanding the exercise of a Stock Option or
any other action by the grantee with respect to an Award.

 

(d)           Other
Compensation Arrangements; No Employment Rights.  Nothing contained in this Plan shall prevent
the Board from adopting other or additional compensation arrangements,
including trusts, and such arrangements may be either generally applicable or
applicable only in specific cases.  The
adoption of this Plan and the grant of Awards do not confer upon any employee
any right to continued employment with the Company or any Subsidiary.

 

(e)           Trading Policy
Restrictions.  Option exercises and
other Awards under the Plan shall be subject to the Company’s insider trading
policies and procedures, as in effect from time to time.

 

(f)            Forfeiture of
Awards under Sarbanes-Oxley Act.  If
the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, then any grantee who
is one of the individuals subject to automatic forfeiture under Section 304
of the 

 

16

 

Sarbanes-Oxley
Act of 2002 shall reimburse the Company for the amount of any Award received by
such individual under the Plan during the 12-month period following the first
public issuance or filing with the United States Securities and Exchange
Commission, as the case may be, of the financial document embodying such
financial reporting requirement.

 

SECTION 19.  EFFECTIVE
DATE OF PLAN

 

This Plan shall become effective upon stockholder approval in
accordance with applicable state law, the Company’s bylaws and articles of
incorporation, and applicable stock exchange rules.  No grants of Stock Options and other Awards
may be made hereunder after the tenth anniversary of the Effective Date and no
grants of Incentive Stock Options may be made hereunder after the tenth
anniversary of the date the Plan is approved by the Board.

 

SECTION 20.  GOVERNING
LAW

 

This Plan and all Awards and actions taken thereunder
shall be governed by, and construed in accordance with, the laws of the State
of Delaware, applied without regard to conflict of law principles.

 

DATE APPROVED BY BOARD OF DIRECTORS:      APRIL
2, 2009

 

DATE APPROVED BY STOCKHOLDERS:      MAY 18,
2009

 

17EXHIBIT 10.62(c)

 

CONFIDENTIAL TREATMENT

REQUESTED PURSUANT TO RULE 24b-2

 

Certain
portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934.  The omitted materials have been
filed separately with the Securities and Exchange Commission.

 

EXECUTION VERSION

 

AMENDMENT NO. 1 TO AIRLINE
SERVICES AGREEMENT

 

This Amendment No. 1, dated as of May 15,
2009 (this “Amendment”), to the Airline
Services Agreement dated as of September 3, 2008 (the “Agreement”) is among Midwest
Airlines, Inc. (“Midwest”),
Republic Airline, Inc. (“RAI”),
Midwest Air Group, Inc. (“Midwest Holdings”)
and Republic Airways Holdings Inc. (“RAI Holdings”).

 

WHEREAS, Midwest, RAI, Midwest Holdings and RAI Holdings
are parties to the Agreement; and

 

WHEREAS, the parties desire to amend the Agreement to
include two Embraer EMB 190 aircraft as Covered Aircraft to be operated by RAI
pursuant to the terms of the Agreement;

 

NOW, THEREFORE, for and in consideration of the mutual
undertakings set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Midwest, RAI, Midwest
Holdings and RAI Holdings hereby agree as follows:

 

1.                                       Defined
Terms.  All
capitalized terms used herein shall have the meanings given to such terms in
the Agreement.

 

2.                                       Amendments.

 

The
Agreement is hereby amended as follows:

 

(a)                                  Section 10.18
is amended by (i) adding the letter “(a)”, immediately before first
sentence thereof and adding the following paragraph (b) at the end of such
section:

 

“(b)                           In addition to
any amounts payable by Midwest pursuant to paragraph (a) hereof (but
without limiting any express obligations of RAI thereunder), any payments made or
costs incurred by RAI during the term of this Agreement for or on account of
any LLPs for any Covered Aircraft shall be for the account of Midwest and
payable as a pass through cost pursuant to Section 3.01.”

 

(b)                                 Exhibit A
is hereby amended by adding each of the following definitions in the
appropriate alphabetical location:

 

““E190
Aircraft” means each Embraer model EMB190 Aircraft that is a Covered
Aircraft.”

 

 

““First
Amendment” means Amendment No. 1 to this Agreement, dated as of May 15,
2009, among Midwest, RAI, RAI Holdings and Midwest Holdings.”

 

(c)                                  Exhibit B
of the Agreement shall be deleted and replaced with Schedule 1 hereto.

 

(d)                                 Appendix 1 to Exhibit D
of the Agreement shall be deleted and replaced with Schedule 2 hereto.

 

3.                                       Conditions
Precedent.  This
Amendment shall become effective only upon the occurrence of each of the
following:

 

(a)                                  the execution
and delivery of this Amendment by each of the parties hereto; and

 

(b)                                 execution of
lease agreements in respect of two Embraer EMB 190 aircraft between Republic
and GECAS.

 

4.                                       Miscellaneous.

 

(a)                                  This Amendment
shall be governed by the law of the State of New York (including without
limitation Section 5-1401 of the New York General Obligations Law).

 

(b)                                 This Amendment
may be executed in separate counterparts by the parties hereto, and each
counterpart shall when executed and delivered be an original document, but all
counterparts shall together constitute one and the same instrument.

 

(c)                                  Except as
otherwise amended by this Amendment, the Agreement shall remain in full force
and effect.

 

2

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
Airline Services Agreement to be duly executed and delivered as of the date and
year first written above.

 

	
  MIDWEST AIRLINES, INC.

  	
   

  	
  REPUBLIC AIRLINE INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Curtis E. Sawyer

  	
   

  	
  By

  	
  /s/ Bryan Bedford

  
	
   

  	
  Curtis E. Sawyer, Senior
  Vice President

  	
   

  	
   

  	
  Bryan Bedford, President

  
	
   

  	
  and Chief Financial
  Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MIDWEST
  AIR GROUP, INC.

  	
   

  	
  REPUBLIC
  AIRWAYS HOLDINGS INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By
  

  	
  /s/
  Curtis E. Sawyer

  	
   

  	
  By

  	
  /s/
  Bryan Bedford

  
	
   

  	
  Curtis
  E. Sawyer, Senior Vice President

  	
   

  	
   

  	
  Bryan
  Bedford, President

  
	
   

  	
  and
  Chief Financial Officer

  	
   

  	
   

  	
   

  

 

3

 

SCHEDULE 1

 

EXHIBIT B

Covered Aircraft &
In-Service Schedule

 

	
  Number

  	
   

  	
  Aircraft Type

  	
   

  	
  Scheduled In-Service Day

  
	
  1.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  2.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  3.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  4.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  5.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  6.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  7.*

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  8.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  9.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  10.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  11.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  12.

  	
   

  	
  EMB 170

  	
   

  	
  [*]

  
	
  13.

  	
   

  	
  EMB 190

  	
   

  	
  [*]

  
	
  14.

  	
   

  	
  EMB 190

  	
   

  	
  [*]

  

 

*Aircraft
number 7 shall be the Spare Aircraft

 

*Confidential

 

 

SCHEDULE 2

 

Base Compensation Rates for EMB170
Aircraft

 

	
   

  	
   

  	
  COST

  	
   

  	
  SUBJECT

  	
   

  	
  UNIT OF

  	
   

  	
   

  	
   

  	
  PERIODIC

  
	
   

  	
   

  	
  ELEMENT

  	
   

  	
  TO ESCALATION

  	
   

  	
  MEASURE

  	
   

  	
  RATE(1)

  	
   

  	
  ADJUSTMENT

  
	
  FIXED
  COSTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VARIABLE
  COSTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
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  PASS-THRU
  COSTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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*Confidential

 

(1)  Costs expressed
in January 2008 economics

 

 

Costs and Rates
applicable to training flights operated per Section 8.02(d)(ii).

 

	
   

  	
   

  	
  COST

  	
   

  	
  SUBJECT

  	
   

  	
  UNIT OF

  	
   

  	
   

  	
   

  	
  PERIODIC

  
	
   

  	
   

  	
  ELEMENT

  	
   

  	
  TO ESCALATION

  	
   

  	
  MEASURE

  	
   

  	
  RATE(1)

  	
   

  	
  ADJUSTMENT

  
	
  FIXED
  COSTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VARIABLE
  COSTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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[*]

 

*Confidential

 

 

Base Compensation Rates for EMB190
Aircraft

 

	
   

  	
   

  	
  COST

  	
   

  	
  SUBJECT

  	
   

  	
  UNIT OF

  	
   

  	
   

  	
   

  	
  PERIODIC

  
	
   

  	
   

  	
  ELEMENT

  	
   

  	
  TO ESCALATION

  	
   

  	
  MEASURE

  	
   

  	
  RATE(1)

  	
   

  	
  ADJUSTMENT

  
	
  FIXED
  COSTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
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  VARIABLE
  COSTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  PASS-THRU
  COSTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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*Confidential

 

(1)  Costs expressed
in January 2009 economics

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}]]