Document:

ex10-64.htm

    Exhibit
10.64

     

    AIRTRAN
HOLDINGS, INC.

     

    WARRANTS
TO PURCHASE

    SHARES
OF COMMON STOCK

     

    REGISTRATION
RIGHTS AGREEMENT

     

     

    October
31, 2008

     

    Bank of
Utah, as trustee

    200 East
South Temple

    Suite
210

    Salt Lake
City, Utah   84111

    Attention:  Corporate
Trust Department

     

    Ladies
and Gentlemen:

     

    Pursuant to (i) an Amended
and Restated Revolving Line of Credit and Reimbursement Agreement (the
“Credit
Agreement”)
dated October 31, 2008 by and among AirTran Airways, Inc. (“Airways”), AirTran Holdings, Inc.
(the “Issuer”) and Bank of Utah, not
in its individual capacity but as trustee (the “Trustee”) under that certain
Trust Agreement dated October 30, 2008, the Issuer is issuing to the
Trustee in such trust capacity as the initial holder (the “Initial Holder”), 4,700,886 warrants
(the “Warrants”) to
purchase an aggregate of Four Million Seven Hundred
Thousand Eight Hundred Eighty-Six (4,700,886) shares
of the Issuer’s common stock, par value $0.001 per share (the “Common Stock”).  As
an inducement to the Initial Holder to enter into the Credit Agreement, the
Issuer agrees with the Initial Holder, for the equal and ratable benefit of the
Holders of the Warrants as follows:

     

    1. Definitions

     

    Capitalized
terms not otherwise defined herein shall have the respective meanings ascribed
to them in the Warrant Agreement.  As used in this Agreement, the
following terms shall have the following
meanings:

     

    Agreement:
This Registration Rights Agreement, dated as of the Closing Date, among
the Issuer and the Initial Holder.

     

    Business
Day: A day that is not a Saturday, a Sunday or a day on which banking
institutions in the City of New York are authorized or required by law or
executive order to be closed.

     

    Closing Date: October 31, 2008.

     

    Common
Stock: See the first introductory paragraph to this
Agreement.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Credit
Agreement: See the first introductory paragraph to this
Agreement.

     

    Day:
Unless otherwise expressly provided, a calendar day.

     

    Effectiveness
Date: The 240th day after the Closing Date.

     

    Effectiveness Period: See Section
2(a).

     

    Exchange
Act: The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

     

    Exercise
Date: The date on which the Warrants are first exercisable.

     

    Filing
Date: The 180th day after the Closing Date.

     

    Holder:
A registered holder of Registrable Securities.

     

    Indemnified Party: See Section
4(c).

     

    Indemnifying Party: See Section
4(c).

     

    Initial
Holder: See the first introductory paragraph to this
Agreement.

     

    Issuer:
See the first introductory paragraph to this Agreement.

     

    NASD:
National Association of Securities Dealers, Inc.

     

    Person:
An individual, trustee, corporation, partnership, limited liability
company, joint stock company, trust, unincorporated association, union, business
association, firm, government or agency or political subdivision thereof, or
other legal entity.

     

    Piggy-Back Registration: See Section
2(b).

     

    Prospectus:
The prospectus included in any Registration Statement with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as such prospectus may be amended or supplemented,
including, without limitation, as such prospectus may be amended pursuant to
Rule 424(b) promulgated under the Securities Act.

     

    Registrable
Securities: Any of (i) the Warrant Shares (whether or not the related
Warrants have been exercised), or (ii) any other securities issued or issuable
with respect to any Warrant Shares by way of stock dividends or stock splits or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise.  As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) such securities shall have been disposed of by the holder
thereof pursuant to a Registration Statement that has been declared effective

     

     

     

    
      
        
        

      

      
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    under the
Securities Act, (ii) such securities are eligible for sale to the public by
non-affiliates of the Issuer pursuant to Rule 144 by the holder thereof without
being subject to volume limitations, or (iii) such securities shall have
otherwise been transferred by the holder thereof in compliance with the
Securities Act and any applicable state securities laws and new certificates for
such securities not bearing a legend restricting further transfer shall have
been delivered by the Issuer or its transfer agent or direct registration or
other book entry registration of such securities without reference to any
restriction restricting further transfer shall have been effected by the Issuer
or its transfer agent.  For the avoidance of doubt, if at any time
after the Warrants comply with clause (ii) above, if at such time there are no
outstanding Warrant Shares which were exercised other than by the cashless
exercise feature of such Warrants, then the parties agree that the provisions of
clause (ii) shall be satisfied if such Warrant Shares issuable upon the future
exercise of such Warrants pursuant to such cashless exercise provision would
then otherwise meet the requirements for sale by non-affiliates pursuant to Rule
144 without volume limits.

     

    Registrable
Shares: Any of (i) the Warrant Shares (whether or not the related
Warrants have been exercised), and (ii) any other securities issued or issuable
with respect to any Warrant Shares by way of stock dividends or stock splits or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise.  As to any
particular Registrable Shares, such securities shall cease to be Registrable
Shares when (i) such securities shall have been disposed of by the holder
thereof pursuant to a Registration Statement that has been declared effective
under the Securities Act, (ii) such securities are eligible for sale to the
public by non-affiliates of the Issuer pursuant to Rule 144 by the holder
thereof without being subject to volume limitations, or (iii) such securities
shall have otherwise been transferred by the holder thereof in compliance with
the Securities Act and any applicable state securities laws and new certificates
for such securities not bearing a legend restricting further transfer shall have
been delivered by the Issuer or its transfer agent or direct registration or
other book entry registration of such securities without reference to any
restriction restricting further transfer shall have been effected by the Issuer
or its transfer agent.

     

    Registration Expenses: See Section
3.

     

    Registration
Statement: Any registration statement filed under the Securities Act
covering the Registrable Securities.

     

    Rule
144: Rule 144 promulgated under the Securities Act, as such rule may be
amended from time to time.

     

    Rule
415: Rule 415 promulgated under the Securities Act, as such rule may be
amended from time to time.

     

    SEC:
The United States Securities and Exchange Commission.

     

    Securities:
The Warrants and the Warrant Shares.

     

     

     

    
      
        
        

      

      
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    Securities
Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

     

    Selling
Holder: A Holder of Registrable Securities who is selling Registrable
Securities in accordance with Section 2
hereof.

     

    Underwritten
Registration or Underwritten Offering: A registration in which securities
of the Issuer are sold to an underwriter for reoffering to the
public.

     

    Warrant
Agreement: The Warrant Agreement, dated as of the Closing Date, between
the Issuer and Bank of Utah, as Trustee.

     

    Warrant
Shares: The shares of Common Stock issuable upon exercise of the
Warrants.

     

    Warrants:
See the first introductory paragraph to this Agreement.

     

    2. Registration
of Registrable Securities

     

    (a) Shelf Registration of
Registrable Securities.

     

    (i) The Issuer shall (x)
prepare and file with the SEC promptly after the date hereof, but in no event
later than the Filing Date, a “shelf” Registration Statement pursuant to Rule
415 (the “Shelf
Registration Statement”) covering resales of the Registrable Securities
(the “Registration”),
(y) use its best efforts to cause such Shelf Registration Statement to be
declared effective under the Securities Act as promptly as practicable after the
filing thereof, but in no event later than the Effectiveness Date and (z) use
its best efforts to keep the Shelf Registration Statement effective until
October 31,
2013 or such
shorter period that will terminate when (I) all of the Registrable Securities
have been sold pursuant to a Registration Statement or (II) all the outstanding
Securities cease to be Registrable Securities (the “Effectiveness
Period”).  Notwithstanding an early termination pursuant to
Section 2(a)(i)(z)(II), the Issuer’s registration obligations under this Section
2(a)(i) shall be immediately reinstated if at any time during the term of this
Agreement Warrants or Warrant Shares once again become Registrable Securities,
because they are no longer eligible for sale to the public by non-affilates of
the Issuer pursuant to Rule 144 by the holder thereof without being subject to
volume limitations, provided that in the case of any reinstated registration
obligation Issuer shall have 30 days to file and have declared effective any
such Registration Statement, before the failure to file and maintain a
Registration Statement shall be a Registration Default.  The Issuer
shall provide to each Holder of Registrable Securities copies of the Prospectus
that is a part of the Shelf Registration Statement, notify each such Holder of
Registrable Securities when the Shelf Registration Statement has become
effective and take such other actions as are required to permit unrestricted
resales of the Registrable Securities.  The Issuer shall require a
Selling Holder that sells Registrable Securities pursuant to the Shelf
Registration Statement to be named as a Selling Holder in the related prospectus
and to deliver a prospectus to purchasers, and any such Selling Holder shall be
bound by the provisions of this Agreement that are applicable to such Selling
Holder (including certain indemnification rights and
obligations).  Each Selling Holder shall deliver information to be
used in connection with the Shelf Registration Statement within the time period
set forth in this Agreement in order to have its Registrable Securities included
in the Shelf Registration Statement.

     

    

    
      
        
        

      

      
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    (ii) If the Registration, or
any Subsequent Registration (as defined below) ceases to be effective for any
time during the Effectiveness Period, the Issuer shall use its commercially
reasonable efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 30 days of
such cessation of effectiveness amend such Registration Statement if and to the
extent such amendment can be reasonably expected to obtain the withdrawal of the
order suspending the effectiveness thereof, or the Issuer shall use its best
efforts to file an additional “shelf” Registration Statement (a “Subsequent Registration
Statement”) pursuant to Rule 415 covering all of the Registrable
Securities (a “Subsequent
Registration”) on or prior to 90 days after such cessation of
effectiveness and to cause the Subsequent Registration Statement to be declared
effective on or prior to 180 days after such cessation of
effectiveness.  Upon a Subsequent Registration Statement being
declared effective, the Issuer shall use its best efforts to keep such
Subsequent Registration Statement continuously effective for a period equal to
the number of days in the Effectiveness Period less the aggregate number of days
during which the Registration Statement, and any Subsequent Registration, was
previously effective.

     

    (b) Piggy-Back Registration of
Registrable Warrant Shares.

     

    (i) If at any
time after the Closing Date and prior to the Filing Date the Issuer proposes to
file a registration statement under the Securities Act with respect to an
offering by the Issuer for its own account or for the account of any holders of
its Common Stock (other than (x) a registration statement on Form S-4 or Form
S-8 (or any substitute form that may be adopted by the SEC) or (y) a
registration statement filed in connection with an exchange offer or offering of
securities solely to the Issuer's existing security holders), then the Issuer
shall give written notice of such proposed filing to the Holders of Registrable
Shares as soon as practicable (but in no event fewer than 30 days before the
anticipated filing date), and such notice shall offer such Holders the
opportunity to register such number of Registrable Shares as each Holder of
Registrable Shares may request in writing within 20 days after receipt of such
written notice from the Issuer (which request shall specify the Registrable
Shares intended to be disposed of by such Selling Holder and the intended method
of distribution thereof) (a “Piggy-Back
Registration”).  The Issuer shall use its reasonable best
efforts to keep such Piggy-Back Registration continuously effective under the
Securities Act until at least the earlier of (x) the end of the Effectiveness
Period or (y) the consummation of the distribution by the Selling Holders of all
of the Registrable Shares covered thereby.  The Issuer shall use its
reasonable efforts to cause the managing underwriter or underwriters, if any, of
such proposed offering to permit the Registrable Shares requested to be included
in a Piggy-Back Registration to be included on the same terms and conditions as
any similar securities of the Issuer or any other security holder included
therein and to permit the sale or other disposition of such Registrable Shares
in accordance with the intended method of distribution thereof.

     

     

     

    
      
        
        

      

      
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    (ii) Priority in Piggy-Back
Registration.  In a registration pursuant to this Section 2(b)
involving an underwritten offering, if the managing underwriter or underwriters
of such underwritten offering have informed, in writing, the Issuer and the
Selling Holders requesting inclusion in such offering that in such
underwriter's or underwriters’ opinion the total number of securities which the
Issuer, the Selling Holders and any other Persons desiring to participate in
such registration intend to include in such offering is such as to adversely
affect the success of such offering, including the price at which such
securities can be sold, then the Issuer will be required to include in such
registration only the amount of securities which it is so advised should be
included in such registration.  In such event: (x) in cases initially
involving the registration for sale of securities for the Issuer’s own account,
securities shall be registered in such offering in the following order of
priority: (i) first, the securities which the Issuer proposes to register, (ii)
second, provided that no securities proposed to be registered by the Issuer have
been excluded from such registration, the securities that have been requested to
be included in such registration by the Selling Holders, and (iii) third,
provided that no securities sought to be included by the Selling Holders have
been excluded from such registration, the securities of other Persons entitled
to exercise “piggy-back” registration rights pursuant to contractual commitments
of the Issuer (pro rata based on the amount of securities sought to be
registered by such Persons); and (y) in cases not initially involving the
registration for sale of securities for the Issuer’s own account, securities
shall be registered in such offering in the following order of priority: (i)
first, the securities of any Person whose exercise of a “demand” registration
right pursuant to a contractual commitment of the Issuer is the basis for the
registration, (ii) second, provided that no securities of any Person whose
exercise of a “demand” registration right pursuant to a contractual commitment
of the Issuer is the basis for such registration have been excluded from such
registration, the securities requested to be included in such registration by
the Selling Holders pursuant to this Agreement, (iii) third, provided that no
securities sought to be included by the Selling Holders or such Persons have
been excluded from such registration, securities of other Persons entitled to
exercise “piggy-back” registration rights pursuant to contractual commitments of
the Issuer (pro rata based on the amount of securities sought be registered by
such Persons) and (iv) fourth, provided that no securities sought to be included
by other Persons entitled to exercise “piggy-back” registration rights pursuant
to such contractual commitments have been excluded from such registration, any
securities which the Issuer proposes to register.

     

    (iii) Suspension of Sales,
etc.  During any consecutive 365-day period, the Issuer shall
be entitled to suspend the availability of the Piggy-Back Registration for up to
two 45 consecutive-day periods (except during the 45 consecutive-day period
immediately prior to the Filing Date) if the Board of Directors of the Issuer
determines in good faith that the effectiveness of, or sales pursuant to, such
Piggy-Back Registration would materially impede, delay or interfere with any
significant financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction involving the Issuer or any of
its affiliates.  If the Issuer shall so postpone the effectiveness of,
or suspend the rights of any Selling Holders to make sales pursuant to, a
Piggy-Back Registration, it shall, as promptly as possible, notify any Selling
Holders of such determination, and the Selling Holders shall (y) have the right,
in the case of a postponement of the effectiveness of a Piggy-Back Registration,
upon the affirmative vote of Selling Holders of not less than a majority of the
Registrable Warrant Shares to be included in such Piggy-Back Registration, to
withdraw the request for registration by giving written notice to the Issuer
within 20 days after receipt of such notice or (z) in the case of a suspension
of the right to make sales, receive an extension of the registration period
referred to in Section
2(a) hereof equal to the number of days of the suspension.

     

     

    
      
        
        

      

      
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    (iv) Any
Selling Holder shall have the right to withdraw its request for inclusion of its
Registrable Shares in any Piggy-Back Registration pursuant to this Section 2(b) by
giving written notice to the Issuer of its request to withdraw at any time prior
to the filing of such Piggy-Back Registration with the SEC.  The
Issuer will pay all Registration Expenses in connection with each registration
of Registrable Shares requested pursuant to this Section 2(b), and
each Holder of Registrable Shares shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
the Registrable Shares of such Holder of Registrable Shares pursuant to a
Piggy-Back Registration effected pursuant to this Section
2(b).

     

    (v) Exclusion of Registrable
Shares.  The Issuer shall not be required by this Section 2(b) to
include Registrable Shares in a Piggy-Back Registration if (i) in the written
opinion of outside counsel to the Issuer, addressed to the holders of
Registrable Shares and delivered to them, the Holders of such Registrable Shares
seeking registration would be free to sell all such Registrable Shares within
the current calendar quarter, without registration, under Rule 144, which
opinion may be based in part upon the representation by the Holders of such
Registrable Shares seeking registration, which representation shall not be
unreasonably withheld, conditioned or delayed that each such Holder is not an
affiliate of the Issuer within the meaning of the Securities Act, and (ii) all
requirements under the Securities Act for effecting such sales are satisfied at
such time.

     

    (vi) No Special
Audit.  The Issuer shall not be obligated to cause any special
audit to be undertaken in connection with any Piggy-Back Registration unless (x)
such special audit is requested by the underwriters with respect to such
Piggy-Back Registration or (y), if such Piggy-Back Registration does not involve
an underwritten offering, such special audit is requested by the Selling Holders
of not less than a majority of the Registrable Shares.

     

    (c) Obligations
of Selling Holders.  The Issuer’s
obligations under this Section
2 shall be
subject to the obligations of the Selling Holders, which the Selling Holders
hereby acknowledge, to furnish all information and materials and to take
any and all actions as may be required under applicable requirements of the SEC
and to obtain an acceleration of the effective date of a Registration
Statement.

     

    3. Registration
Expenses.  Except as set forth in Section 2(b)(iv), all
fees and expenses incident to the performance of or compliance with this
Agreement (the “Registration Expenses”) shall be borne by the Issuer, whether or
not a Registration Statement is filed or becomes effective, including, without
limitation, (i) all registration and filing fees, including, without limitation,
(A) fees with respect to filings required to be made with the NASD in connection
with any underwritten offering and (B) fees and expenses of compliance with
state securities or Blue Sky laws, (ii) printing expenses, including, without
limitation, expenses of printing Prospectuses if the printing of Prospectuses is
requested by the managing underwriter or underwriters, if any, (iii) messenger,
telephone and delivery expenses incurred in connection with the performance of
its obligations hereunder, (iv) fees and disbursements of counsel for the
Issuer, (v) rating agency fees, (vi) Securities Act liability insurance, if the
Issuer desires such insurance, (vii) fees and expenses of all other Persons
retained by the Issuers, (viii) internal expenses of 

     

     

    
      
        
        

      

      
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    the
Issuer (including, without limitation, all salaries and expenses of officers and
employees of the Issuer performing legal or accounting duties), (ix) the expense
of any annual audit, (x) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange and (xi)
the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, securities sales agreements,
indentures and any other documents necessary in order to comply with this
Agreement; provided,
however, that in the case of any underwritten offering, in no event shall
the Issuer be responsible for any underwriting discounts and commissions of any
Selling Holder.

     

    4. Indemnification

     

    (a) Indemnification by the
Issuer.  The Issuer shall without limitation as to time,
indemnify and hold harmless each Holder of Registrable Securities, each Person,
if any, who controls each such Holder (within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) and the officers, directors
and partners of each such Holder and controlling person, to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and reasonable
attorneys’ fees and disbursements as provided in this Section 4) and
expenses (including, without limitation, costs and expenses incurred in
connection with investigating, preparing, pursuing or defending against any of
the foregoing) (collectively, “Losses”), as incurred,
directly or indirectly caused by, related to, based upon, arising out of or in
connection with any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus, any issuer free writing
prospectus or in any amendment or supplement thereto, or in any preliminary
prospectus, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
insofar as such Losses are solely based upon information relating to such Holder
and furnished in writing to the Issuer by such Holder or its counsel expressly
for use therein.  The Issuer shall also indemnify underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers, directors, agents and
employees and each Person who controls such Persons (within the meaning of
Section 5 of the Securities Act or Section 20(a) of the Exchange Act) to the
same extent as provided above with respect to the indemnification of the
Holders.

     

    (b) Indemnification
by Holders.  In connection
with any Registration Statement, Prospectus, any issuer free writing prospectus,
any amendment or supplement thereto, or any preliminary prospectus in
which a Holder is participating, such Holder shall furnish to the Issuer in
writing such information as the Issuer reasonably requests for use in connection
with any Registration Statement, Prospectus, any amendment or supplement
thereto, or any preliminary prospectus and shall, without limitation as to time,
indemnify and hold harmless the Issuer, its directors and each Person, if any,
who controls the Issuer (within the meaning of Section 15 of the Securities Act
and Section 20(a) of the Exchange Act), and the directors, officers, employees,
agents, and partners of such controlling
persons, to the fullest extent lawful, from and against all Losses arising out
of or based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus, any issuer free writing
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading to the
extent (but only to the extent) that such Losses are finally judicially
determined by a court of competent jurisdiction (which determination is not
subject to appeal) to have resulted solely from an untrue statement or alleged
untrue statement of a material fact or omission or alleged omission of a
material fact contained in or omitted from any information so furnished in
writing by such Holder to the Issuer expressly for use
therein.  Notwithstanding the foregoing, in no event shall the
liability of any selling Holder be greater in amount than the dollar amount of
the proceeds (net of payment of all expenses) received by such Holder upon the
sale of the Registrable Securities giving rise to such indemnification
obligation.

     

     

    
      
        
        

      

      
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    (c) Conduct of Indemnification
Proceedings.  If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the party or parties from which such
indemnity is sought (an “Indemnifying Party”) in
writing; provided, that
the failure to so notify the Indemnifying Parties shall not relieve the
Indemnifying Parties from any obligation or liability except to the extent (but
only to the extent) that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal) that the
Indemnifying Parties have been prejudiced materially by such
failure.

     

    The
Indemnifying Party shall have the right, exercisable by giving written notice to
an Indemnified Party, within 20 Business Days after receipt of written notice
from such Indemnified Party of such Proceeding, to assume, at its expense, the
defense of any such Proceeding, provided, that an
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or parties
unless: (1) the Indemnifying Party has agreed to pay such fees and expenses; or
(2) the Indemnifying Party shall have failed promptly to assume the defense of
such Proceeding or shall have failed to employ counsel reasonably satisfactory
to such Indemnified Party; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party or any of its affiliates or controlling persons, and such
Indemnified Party shall have been advised by counsel that there may be one or
more defenses available to such Indemnified Party that are in addition to, or in
conflict with, those defenses available to the Indemnifying Party or such
affiliate or controlling person (in which case, if such Indemnified Party
notifies the Indemnifying Parties in writing that it elects to employ separate
counsel at the expense of the Indemnifying Parties, the Indemnifying Parties
shall not have the right to assume the defense and the reasonable fees and
expenses of such counsel shall be at the expense of the Indemnifying Party; it
being understood, however, that, the Indemnifying Party shall not, in connection
with any one such Proceeding or separate but substantially similar or related
Proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses or more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such Indemnified Party).

     

     

    
      
        
        

      

      
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    No
Indemnifying Party shall be liable for any settlement of any such Proceeding
effected without its written consent, which shall not be unreasonably withheld,
but if settled with its written consent, or if there be a final judgment for the
plaintiff in any such Proceeding, each Indemnifying Party jointly and severally
agrees, subject to the exceptions and limitations set forth above, to indemnify
and hold harmless each Indemnified Party from and against any and all Losses by
reason of such settlement or judgment.  The Indemnifying Party shall
not consent to the entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to each Indemnified Party of a release, in form and substance
satisfactory to the Indemnified Party, from all liability in respect of such
Proceeding for which such Indemnified Party would be entitled to indemnification
hereunder (whether or not any Indemnified Party is a party
thereto).

     

    (d) Contribution.  If
the indemnification provided for in this Section 4 is
unavailable to an Indemnified Party or is insufficient to hold such Indemnified
Party harmless for any Losses in respect of which this Section 4 would
otherwise apply by its terms (other than by reason of exceptions provided in
this Section
4), then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall have a joint and several obligation to contribute to
the amount paid or payable by such Indemnified Party as a result of such Losses,
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party, on the one hand, and such Indemnified Party, on the other
hand, in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party, on the
one hand, and Indemnified Party, on the other hand, shall be determined by
reference to, among other things, whether any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such Indemnifying Party or Indemnified Party,
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent any such statement or omission.  The
amount paid or payable by an Indemnified Party as a result of any Losses shall
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any Proceeding, to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
Section 4(a) or
4(b) was
available to such party.

     

    The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4(d) were
determined by pro rata allocation or by other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph.  Notwithstanding the provisions of this Section 4(d), a
Selling Holder shall not be required to contribute, in the aggregate, any amount
in excess of such Holder’s Maximum Contribution Amount.  A selling
Holder’s “Maximum Contribution
Amount” shall equal the excess of (i) the aggregate net proceeds received
by such Holder pursuant to the sale of such Registrable Securities over (ii) the
aggregate amount of damages that such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    The
indemnity and contribution agreements contained in this Section 4 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

     

    5. Liquidated
Damages

     

    (a) The
Issuer acknowledges and agrees that the Holders of Registrable Securities will
suffer damages, and that it would not be feasible to ascertain the extent of
such damages with precision, if the Issuer fails to fulfill its obligation
hereunder.  Accordingly, in the event of such failure, the Issuer
agrees to pay liquidated damages to each Holder of Registrable Securities under
the circumstances and to the extent set forth below:

     

    

     

    (i) if the
Issuer fails to file any required Registration Statement on or prior to the
Filing Date; or

     

    (ii) if any
required Registration Statement is not declared effective by the SEC on or prior
to the Effectiveness Date;

     

    (iii) if a
Registration Statement is filed and declared effective by the SEC but thereafter
ceases to be effective or usable in connection with the resale of the
Registrable Securities without being (x) amended by an amendment which is both
filed and declared effective within 30 days of such cessation or unusability or
(y) succeeded by a Subsequent Registration Statement which is both filed and
declared effective within such 30 day period.

     

    (each of
the foregoing a “Registration
Default”).

     

    Upon
occurrence of any Registration Default, the Issuer shall pay, or cause to be
paid to each Holder of Registrable Securities $0.033 per Warrant Share for each
90-day period (or portion thereof) after the occurrence of a Registration
Default as liquidated damages, and not as a penalty, for each Registrable
Security owned by such Holder.

     

    (b) Notwithstanding
Section 5(a) of
this Agreement, the Issuer shall not be required to pay Liquidated Damages to a
Holder of Registrable Securities with respect to the Registrable Securities held
by such Holder (i) to the extent such Registrable Securities are comprised of
any securities (other than Common Stock) issued or issuable with respect to any
Warrant Shares by way of stock dividends or stock splits or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise or (ii) if the Registration Default arises by reason
of the failure of such Holder to provide information that (x) the Issuer may
reasonably request, with reasonable prior notice, for use in the Registration
Statement or any prospectus included therein to the extent the Issuer reasonably
determines that such information is required to be included therein by
applicable law or (y) the SEC may request in connection with such Registration
Statement (but only to the extent that such compliance is necessary for the
Registration Statement to be declared effective).

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    6. Miscellaneous

     

    (a) No Inconsistent
Agreements.  The Issuer has not entered, as of the date hereof,
and the Issuer shall not enter, after the date of this Agreement, into any
agreement with respect to any of its securities that is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof.  Except as set forth
on Schedule
6(a) attached hereto, the Issuer has not entered into any agreement with
respect to any of its securities which will grant to any Person piggy-back
rights with respect to a Registration Statement.  The Issuer will not
enter into any agreement with respect to any of its securities which will grant
to any Person piggy-back rights that are senior to the rights granted to the
Holders under this Agreement with respect to a Registration
Statement.

     

    (b) Adjustments Affecting
Registrable Securities.  The Issuer shall not, directly or
indirectly, take any action with respect to the Registrable Securities that
would adversely affect the ability of the Holders to include such Registrable
Securities in a registration undertaken pursuant to this Agreement.

     

    (c) Amendments and
Waivers.  The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, otherwise than with the prior written
consent of, in circumstances that would adversely affect all Holders, the
Holders of a majority of the Registrable Securities (treating as outstanding for
this purpose Warrant Shares issuable on exercise of unexercised Warrants); provided, however, that Section 4 and this
Section 6(c)
may not be amended, modified or supplemented without the prior written consent
of each Holder of Registrable Securities and further provided that in
calculating whether the consent of “the Holders of a majority of Registrable
Securities” has been obtained, Registrable Securities which have been disposed
of pursuant to any Registration Statement shall be included in the calculation
of outstanding Registrable Securities to the extent such that the rights of the
Holders of such disposed Registrable Securities under Section 4 or this
Section 6(c)
would be adversely affected by any proposed amendment to Section 4 or this
Section 6(c)
and such former Holder shall have the right to provide or withhold their
consents as if such former Holders were still Holders.

     

    (d) Notices.  All
notices and other communications provided for or permitted hereunder shall be
made in writing by hand-delivery, registered first-class mail, next-day air
courier or telecopier or electronic mail as set forth in Schedule
A.

     

    All such
notices and communications shall be deemed to have been duly given: when
delivered by hand, if personally delivered; five Business Days after being
deposited in the United States mail, postage prepaid, if mailed, one Business
Day after being timely delivered to a next-day air courier guaranteeing
overnight delivery, and when receipt is acknowledged by the addressee, if
telecopied or sent by electronic mail.

     

    Copies of
all such notices, demands or other communications shall be concurrently
delivered by the Person giving the same to the Trustee under the Warrant
Agreement at the address specified in the Warrant Agreement.

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (e) Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto,
including, without limitation and without the need for an express assignment,
subsequent holders of Registrable Securities.

     

    (f) Counterparts.  This
Agreement may be executed in any number of counterparts and by the parties
hereto in one or more counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.

     

    (g) Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

     

    (h) Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAW THEREOF.  THE ISSUER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS.  THE ISSUER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY TO DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  THE ISSUER IRREVOCABLY CONSENTS, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE ISSUER AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUER IN ANY OTHER
JURISDICTION.

     

    (i) Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (j) Securities Held by the
Issuer or Its Affiliates.  Whenever the consent or approval of
holders of a specified percentage of Holders is required hereunder, Registrable
Securities held by the Issuer or its affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required
percentage.  The parties hereby acknowledge and agree that neither the
Initial Purchaser nor any of its affiliates is an affiliate of the
Issuer.

     

    (k) Third Party
Beneficiaries.  Holders of Registrable Securities are intended
third party beneficiaries of this Agreement, and this Agreement may be enforced
by such Persons.

     

    (l) Tax
Treatment.  The Issuer agrees that it will not treat the
Warrants as having been issued in connection with the performance of services
within the meaning of Section 83 of the Internal Revenue Code.

     

    (m) Entire
Agreement.  This Agreement, together with the Credit Agreement
and, the Warrant Agreement is intended by the parties as a final and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein and any and all prior oral or
written agreements, representations, or warranties, contracts, understanding,
correspondence, conversations and memoranda between the Initial Holder on the
one hand and the Issuer on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.

     

    

     

    [Signatures
on Following Pages]

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

     

    

     

    

     

                    AIRTRAN HOLDINGS,
INC.

    
 

     

                    By:                                                           

     

                 Name: Richard P. Magurno

                 Title:
SVP

     

     

     

     

     

     

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

     

    

     

     

     

    

     

    ACCEPTED AND AGREED
TO:

     

    BANK OF
UTAH not in its individual

    capacity
but as trustee under that certain

    Trust
Agreement dated October 30, 2008

     

    
 

     

    By:

     

    Name:

    Title:

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    SCHEDULE
A

    

    

    (i) If to a
Holder, at the most current address of such Holder set forth on the records of
the Registrar of the Warrants or Convertible Notes, as the case may be, with a
copy in like manner;

     

    (ii) if to the
Initial Holder, as follows:

     

    Bank of
Utah, as trustee

    200 East
South Temple

    Suite
210

    Salt Lake
City, Utah   84111

    Attention:  Brett
R. King

    Facsimile
No.:  (801) 746-3519

     

    with a
copy to:

     

    Winston
& Strawn LLP

    35 West
Wacker Drive

    Chicago,
Illinois   60601-9703

    Attention:
 Michael P.
O’Brien, Esq.

    Facsimile
No.:  (312) 558-5700

     

    (iii) if to the
Issuer, as follows:

     

    AirTran
Holdings, Inc.

    9955
AirTran Boulevard

    Orlando,
Florida   32827

    Attention:  Treasurer

     

    with a
copy to:

     

    Smith,
Gambrell & Russell, LLP

    1230
Peachtree Street

    Promenade
II, Suite 3100

    Atlanta,
Georgia   30309-3592

    Attention:Howard
E. Turner, Esq. or

    M. Timothy Elder, Esq.EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

          This EMPLOYMENT AGREEMENT (“Agreement”), dated as of February 10, 2009, is entered into by and
between Medco Health Solutions, Inc. (“Medco”), a Delaware corporation with offices at 100 Parsons
Pond Drive, Franklin Lakes, New Jersey 07417 and David B. Snow, Jr. (“the Executive”). This
Agreement shall be effective as of the date it has been signed by both Medco and the Executive and
at that time the Employment Agreement between Medco and the Executive dated as of March 17, 2003 as
amended by Letter Agreement dated January 24, 2007 shall terminate and have no further force or
effect.

          1. Employment. Medco hereby agrees to continue to employ the Executive during the
Employment Period subject to the terms of this Agreement, and, provided that this Agreement has not
terminated prior to March 31, 2012, thereafter as an employee-at-will. Unless prevented by
sickness or disability, the Executive shall use his best and most diligent efforts to promote the
interests of Medco and its affiliates and shall devote his full business time and attention to his
employment under this Agreement. The Executive will not, without the prior written approval of
Medco’s Board of Directors, engage in any other business activity that would interfere with the
performance of his duties, services and responsibilities hereunder or that is in violation of
policies established by Medco; provided, however, that this Agreement shall not be interpreted as
prohibiting the Executive from managing his personal affairs or engaging in reasonable charitable
or civic activities. For purposes of this Agreement, “Employment Period” shall mean a period
commencing on February 10, 2009 and ending on the sooner of March 31, 2012 or the date on which
this Agreement is terminated under paragraph 9 below.

          2. Title. The Executive’s title shall be Chairman and Chief Executive Officer.

          3. Compensation. As compensation for the Executive’s services under this Agreement,
Medco shall pay the Executive a base salary at the rate of $1,300,000 per year, payable in equal
installments in accordance with Medco’s practice. During the first quarter of each year, the
Executive’s base salary then in effect and other components of compensation shall be reviewed and,
if appropriate, revised by the Board of Directors no less frequently than annually. The Executive
shall not participate in such compensation review or revision.

          4. Annual Incentive. The Executive shall be eligible to participate in Medco’s
annual incentive bonus plan in accordance with its terms and conditions. During the Employment
Period, the target amount of such bonus shall be 130 percent of the Executive’s base salary at the
end of the prior calendar year. The actual amount of the annual bonus shall be determined by the
Board of Directors considering Medco’s and the Executive’s performance. The Executive shall not
participate in deliberations or determinations of the Board of Directors concerning his bonus.

          5. Long-Term Incentives. The Executive shall be eligible to receive annual
long-term incentives. The date such long-term incentives are granted shall generally be the same
as the date long-term incentives are granted to other senior executives of Medco. The form and
amount of any long-term incentives shall be determined by the Board of Directors taking into
account the

1

 

Executive’s position, current competitive data, the historical value of long term incentive
awards, the price of the Company’s stock at the time of grant, Company performance, individual
performance and internal equity. The Executive shall not participate in such determination.

          6. Participation in Other Benefit Plans. As an employee of Medco, the Executive
shall be eligible to participate in Medco’s employee benefit plans for its salaried employees on a
basis comparable to Medco’s other most senior executives, including but not limited to its medical,
dental, disability, life insurance, pension and savings plans, subject to any contribution
requirements applicable to participants of such plans and programs. The Executive shall be
entitled to take five weeks of paid vacation during each calendar year.

          7. Other Benefits.

	 	(a)	 	Medco shall pay for the cost of personal financial planning to the
Executive by a financial counselor of the Executive’s choice, provided that the
cost to be borne by Medco shall not exceed $10,000 in each year of the Employment
Period.
	 
	 	(b)	 	During the Employment Period, Medco shall pay the Executive a monthly
automobile allowance of $1,885.
	 
	 	(c)	 	During the Employment Period, the Executive is authorized to incur
reasonable business expenses in carrying out his duties and responsibilities under
this Agreement. Medco shall reimburse him for all such reasonable business
expenses subject to and in accordance with the terms and conditions of Medco’s
policies applicable to its other senior executives.
	 
	 	(d)	 	Medco shall indemnify and hold harmless the Executive in the same
amount and to the same extent as its other senior officers and directors for any
action or inaction of the Executive while serving as an officer or director of
Medco or any of its affiliates or, at Medco’s request, as an officer or director of
any other entity or as a fiduciary of any benefit plan. Medco shall cover the
Executive under directors and officers liability insurance both during and, while
potential liability exists, after termination of employment in the same amount and
to the same extent as Medco covers its other senior officers and directors.

          8. Full Settlement. Medco’s obligation to make the payments or grant the benefits
provided for in this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
Medco may have against the Executive or others, except as otherwise provided in this Agreement. In
no event shall the Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable or benefits granted to the Executive under any of the
provisions of this Agreement and such amounts or benefits shall not be reduced because the
Executive obtains other employment, except as otherwise provided in this Agreement, except that any
continued healthcare benefits provided for in subparagraphs 9(b) and

2

 

9(c) shall be secondary to any coverage provided to the Executive and his spouse and eligible
dependents by any such other employment.

          9. Termination.

	 	(a)	 	By Medco for Cause. Upon written notice to the Executive
specifying the basis for such action, Medco may discharge the Executive and
terminate this Agreement for Cause. As used in this paragraph, “Cause” shall exist
only if, after reasonable investigation, a majority of the Board of Directors
(excluding the Executive), after providing the Executive (and his counsel, if he so
chooses) a reasonable opportunity to be heard, finds that one or more of the
following conditions exists: (i) an act or acts of personal dishonesty or
misrepresentation made by the Executive and intended to or resulting in personal
enrichment of the Executive at the expense of Medco that is not immaterial; (ii)
demonstrably willful and deliberate violations by the Executive of the Executive’s
obligations under this Agreement; (iii) the Executive’s gross neglect (other than
any such failure resulting from incapacity due to physical or mental illness) or
gross misconduct in carrying out his duties resulting, in either case, in material
economic harm to Medco; (iv) the conviction of, or plea of nolo contendere by, the
Executive of a felony. Upon Medco’s termination of this Agreement for Cause: the
Executive shall forfeit any remaining equity awards granted under paragraph 5
hereof (whether or not vested) that have not yet been paid, been exercised or
become unrestricted (as applicable) as of the date of such termination; Medco shall
have no obligation to provide severance or separation pay to the Executive; and
Medco shall be relieved, as of the effective date of the termination, from any
further salary or compensation payments to the Executive other than the payment of
accrued or vested benefits. For purposes of the foregoing sentence, the annual
bonus described in paragraph 4, and equity and incentive awards described in
paragraph 5, shall not be deemed accrued or vested benefits.
	 
	 	(b)	 	By Medco without Cause or by Reason of Disability or by the
Executive for Good Reason. Medco on written notice to the Executive may
discharge the Executive and terminate this Agreement without Cause at any time
during the Employment Period. Medco on written notice to the Executive may
discharge the Executive and terminate this Agreement at any time during the
Employment Period by reason of Disability which, for purposes of this Agreement,
means the failure of the Executive to carry out substantially and effectively
Executive’s duties and responsibilities hereunder for a period in excess of eight
consecutive weeks or twelve weeks in any six-month consecutive period. The
Executive may terminate this Agreement during the Employment Period upon written
notice to Medco, for Good Reason which, for purposes of this paragraph, will arise
only if (i) there is any material breach by Medco of the Agreement which is not
remedied after notice from the Executive; (ii) Medco takes any action that results
in a material reduction

3

 

	 	 	 	in the Executive’s base salary or target bonus opportunity, provided that prior
to a Change in Control, Good Reason will not arise as a result of a reduction of
Executive’s base salary that is either required by law or implemented as part of
an across the board reduction in pay affecting all senior executives of Medco;
(iii) Medco relocates its principal executive offices to a location more than
fifty (50) miles from its location immediately prior to such relocation and such
relocation increases the distance from Executive’s residence at the time of
relocation to the executive office by a material amount; (iv) Medco takes any
action that results in a substantial and material diminution in the Executive’s
position, authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith and which
is remedied by Medco promptly after receipt of written notice thereof given by
the Executive, or if the Executive is required to report to anyone other than
the full Board of Directors, provided that written notice must be received by
the Board of Directors within 30 days of such diminution or change in reporting,
whichever is applicable, or (v) Medco fails to comply with and satisfy paragraph
14 of this Agreement, provided that such written notice must be received by the
Board of Directors within 60 days of such initial failure or noncompliance.
Upon termination of this Agreement during the Employment Period either by Medco
without Cause or by reason of Disability or by the Executive for Good Reason (as
described above), Medco shall be relieved of any further salary or compensation
payments to the Executive other than the payment of accrued or vested benefits.
Notwithstanding the preceding sentence, the Executive shall also be entitled to
receive, in return for a general release and waiver of claims, a severance
payment (subject to appropriate payroll and tax withholding and deductions)
equal in amount to twice the sum (one times the sum in the case of termination
by reason of Disability) of the Executive’s current (i.e., at the time of
termination) annual base pay plus the last annual bonus he received from Medco
prior to such termination, and payment for 12 months by Medco of the premium
cost of COBRA continuation coverage for him and his spouse and dependents who
are eligible for COBRA continuation coverage. The foregoing severance payment
shall be in lieu of any other severance payment or arrangement under any Medco
plan, policy or practice, and shall be paid in 24 equal monthly installments (12
equal monthly installments in the case of termination by reason of Disability)
beginning on the last day of the month following the month in which the
Executive’s employment with Medco terminated; provided, however, that upon the
Executive’s post-employment substantial or material breach of any of his
obligations set forth in paragraph 10 below, or upon Medco’s learning after the
termination of the Executive’s employment that the Executive either breached any
such obligation during the Employment Period, or engaged in conduct during the
Employment Period that would have warranted the termination of this Agreement
for Cause under paragraph 9(a) hereof, Medco shall be relieved of the obligation
to make any, or any further, severance or COBRA payment or payments under this
subparagraph 9(b) and Medco shall have the right to recover amounts

4

 

	 	 	 	previously paid or benefits provided pursuant to subparagraph 9(b). The general
release and waiver of claims provided as a condition of the receipt of payments
and benefits pursuant to this subparagraph 9(b) shall not be affected and shall
remain in full force and effect in the event Medco is relieved of its obligation
to provide severance pay or benefits under this subparagraph 9(b) or Medco
exercises its right under this subparagraph 9(b) to recover amounts paid or
benefits previously provided pursuant to this subparagraph 9(b). Stock-based
incentives shall be governed by their terms, provided that, any termination of
the Executive by the Company without Cause or by the Executive with Good Reason
shall be treated as a “Separation” if the Executive signs the general release
and waiver of claims described herein.
	 
	 	(c)	 	By Medco Following a Change in Control. If within one year of a
“Change in Control” as defined in Attachment “A” annexed hereto, the Executive’s
employment with Medco is terminated by the Company without Cause or by Executive
with Good Reason, Medco shall be relieved of any further salary or compensation
payments hereunder, except that the Executive shall be entitled to receive, in
return for a general release and waiver of claims, a lump sum severance payment
(subject to appropriate payroll and tax withholding and deductions) equal in amount
to three times the sum of the Executive’s current annual base pay plus the last
annual bonus he received from Medco prior to such termination, and payment for 12
months by Medco of the premium cost of COBRA continuation coverage for him and his
spouse and dependents who are eligible for COBRA continuation coverage. The
foregoing severance payment shall be in lieu of any other severance payment or
arrangement under any Medco plan, policy or practice. Stock-based incentives shall
be governed by their terms. In the event that the payments and benefits provided
to Executive herein or otherwise by the Company constitute “parachute payments”
within the meaning of Code Section 280G and would, but for this provision, be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then the payments and benefits to the Executive shall be either
(i) delivered in full or (ii) delivered as to such lesser extent, as Executive may
elect, as would result in no portion of such amounts being subject to the Excise
Tax, whichever of the foregoing results in the receipt by Executive on an after-tax
basis of the greatest amount, notwithstanding that all of some of the amounts may
be taxable under Section 4999 of the Code. If a reduction is to occur pursuant to
the prior sentence, unless an alternative election is permitted by, and does not
result in taxation under, Section 409A and timely elected by Executive, the
payments and benefits shall be cutback in the following order: any cash severance
to which the Executive is entitled (starting with the last payment due), then other
cash amounts that are parachute payments (starting with the last payment due), then
any stock options that have exercise prices higher than the then fair market value
price of the stock (based on the latest vesting tranches), then restricted stock
and restricted stock units based on the last ones scheduled to be distributed and
then other stock options based on the latest vesting

5

 

	 	 	 	tranches. For purposes of clarification, Executive shall be responsible for the
payment of all taxes associated with any “parachute payment.”
	 
	 	(d)	 	Resignation from the Board of Directors. If the Executive’s
employment with Medco ends for any reason, and the Board of Directors requests that
the Executive resign from the Board of Directors, the Executive agrees to resign
from the Board of Directors immediately upon receipt of such request.
	 
	 	(e)	 	Continuing Obligations. The termination of this Agreement
shall not affect any of the Executive’s post-employment obligations that may arise
under paragraph 10 below.
	 
	 	(f)	 	Section 409A Compliance. Executive agrees that he is solely
responsible for the payment of any tax liability (including any taxes and penalties
arising under Section 409A of the Internal Revenue Code of 1986, as amended) that
may result from any payments or benefits that he receives pursuant to the
Employment Agreement. The Company shall not have any obligation to pay, mitigate,
or protect Executive from any such tax liability. Nevertheless, Executive agrees
that if the Company reasonably determines that Executive’s receipt of payments or
benefits pursuant to the Employment Agreement would cause Executive to incur
liability for additional tax under Section 409A of the Code, then the Company may
in its discretion suspend such payments or benefits until the end of the six-month
period following termination of Executive’s employment (the “409A Suspension
Period”). As soon as reasonably practical after the end of the 409A Suspension
Period, the Company will make a lump sum payment to Executive, in cash by check, in
an amount equal to any payments and benefits that the Company does not make during
the 409A Suspension Period. Thereafter, Executive will receive any remaining
payments and benefits due pursuant to the Employment Agreement in accordance with
the terms thereof (as if there had not been any suspension beforehand). 

          10. Noncompete, Nonsolicitation, Developments, Nondisparagement and Confidentiality.
In consideration for the compensation and benefits provided pursuant to this Agreement, the
Executive agrees:

	 	(a)	 	While the Executive is an employee of Medco and for a period of two
years after his employment by Medco terminates, the Executive will not (as an
individual, principal, agent, employee, consultant or otherwise) for any reason
without Medco’s prior written consent, directly or indirectly in any territory in
which Medco and/or any of its affiliates does business and/or markets its products
and services, engage in activities competitive with, nor render services to any
firm or business engaged or about to become engaged in competition with, the
business of Medco, which includes, but is not limited to, the following businesses:
(i) the third party prescription drug claims

6

 

	 	 	 	processing business; (ii) the design, development or marketing of or consulting
as to, prescription drug benefit plans; (iii) the provision of mail service
pharmacy (including all those products and services that are presently or
hereafter marketed by Medco, or that are in the development stage at the time of
termination of the Executive’s employment at Medco and are actually marketed by
Medco and/or its any of its affiliates thereafter); (iv) the collection,
analysis and/or sale of data relating to prescription drug utilization; (v) the
pharmacy benefit management and disease management business whether such
business is conducted through mail service, retail pharmacy networks or other
means, including but not limited to the internet and other types of electronic
transmission; (vi) the organization and administration of retail pharmacy
networks; and (vii) any other business in which Medco and/or its any of its
affiliates is then engaged (hereinafter collectively, the “Business of Medco”).
In addition, the Executive agrees not to have an equity interest in any such
firm or business other than a 1% or less shareholder of a public corporation.
Notwithstanding the foregoing, after the Executive’s employment by Medco
terminates, nothing herein shall be construed to prevent or restrict the ability
of the Executive to perform services (as an individual, principal, agent,
employee, officer, director, consultant or otherwise) for any business or entity
primarily engaged in the operation, management, financing or marketing of health
insurance or health maintenance organizations, provided that such business or
entity is not engaged in the third party prescription drug claims processing
business or the pharmacy benefit management business.
	 
	 	(b)	 	During the Executive’s employment with Medco and for a period of
two years following the termination of his employment with Medco, he will not,
directly or indirectly, (i) solicit or contact any customer or targeted potential
customer of Medco and/or any of its affiliates for the purpose of offering
products or services that, directly or indirectly, compete or interfere with the
Business of Medco and/or its any of its affiliates, (ii) induce or attempt to
induce, any employees, agents or other consultants of Medco and/or its any of its
affiliates to do anything from which the Executive is restricted by reason of
this Agreement, (iii) offer or aid others to offer employment to any employees,
agents, or other consultants of Medco and/or its any of its affiliates, or (iv)
provide services to any customer or otherwise interfere with or disrupt any
contractual or potential contractual relationship between any customer and Medco
and/or any of its affiliates.
	 
	 	(c)	 	The Executive agrees that, during his employment and following the
termination of his employment with Medco, he will not disparage Medco, any of its
affiliates, products, officers, employees, former employees, representatives or
agents in any way whatsoever.
	 
	 	(d)	 	All data, concepts, ideas, designs, findings, discoveries,
inventions, improvements, advances, methods, formulas, plans, programs (computer
or

7

 

	 	 	 	otherwise), practices, techniques, developments and relationships with customers
and prospective customers relating in any way to the present and/or contemplated
products, services, or business of Medco (collectively “Developments”) that the
Executive may conceive, make, invent or suggest during or as a result of his
employment by Medco, whether acting alone or in conjunction with others, shall
be the sole and absolute property of Medco free of any rights of any kind on the
part of the Executive. The Executive shall promptly make full disclosure of all
Developments to Medco. He agrees to do all acts and things (including, among
others, the execution and delivery of patent and copyright applications and
instruments of assignment) deemed by Medco to be necessary or desirable at any
time in order to effect the full assignment to Medco of his rights, if any, to
such Developments.
	 
	 	(e)	 	The Executive recognizes that, in connection with his employment by
Medco, he may learn of, and/or it may be desirable or necessary for Medco to
disclose to him confidential information (“Confidential Information”). He
understands that Confidential Information is valuable and propriety to Medco (or
to third parties that have entrusted the Confidential Information to Medco). The
Executive agrees that, except as required by his employment with Medco, he will
not at any time, directly or indirectly, use, publish, communicate, describe,
disseminate, or otherwise disclose Confidential Information to any person or
entity without the express prior written consent of Medco. The term Confidential
Information shall include, but shall not be limited to: (i) customer lists,
lists of potential customers and details of agreements with customers; (ii)
acquisition, expansion, marketing, financial and other business information and
plans of Medco; (iii) research and development; (iv) data concerning usage of
prescription drugs and any other data compiled by Medco; (v) computer programs;
(vi) sources of supply; (vii) identity of specialized consultants and contractors
and Confidential Information developed by them for Medco; (viii) purchasing,
operating and other cost data; (ix) special customer needs, cost and pricing
data; (x) employee information (including, but not limited to, personnel,
payroll, compensation and benefit data and plans); and (xi) patient records and
data, including all such information recorded in manuals, memoranda, projections,
minutes, plans, drawings, designs, formula books, specifications, computer
programs and records, whether or not legended or otherwise identified by Medco as
Confidential Information, as well as such information that is the subject of
meetings and discussions and not recorded. Confidential Information shall not
include such information that is generally available to the public (other than as
a result of a disclosure by the Executive) or that is disclosed to the Executive
by a third party under no obligation to keep such information confidential.
	 
	 	(f)	 	Upon the termination of the Executive’s employment with Medco or
upon Medco’s request, whichever is sooner, the Executive shall immediately
deliver to Medco all plans, designs, listings, manuals, records, notebooks, and

8

 

	 	 	 	similar repositories of or containing Confidential Information or other
documents and data relating to Medco’s products, services, or business then in
the Executive’s possession or control or available from other persons receiving
such documents from the Executive, whether prepared by the Executive or others.
The Executive shall not retain any copies or abstracts of any such documents.
Upon the termination of the Executive’s employment with Medco, the Executive
shall immediately deliver to Medco all Medco property in his possession or
control including, but not limited to, computer(s) and office equipment.
	 
	 	(g)	 	Any substantial or material breach by the Executive of any of the
post-employment obligations set forth in this paragraph 10, shall terminate any
further post-employment obligations that Medco may have relative to providing
post-employment compensation or benefits to the Executive and shall result in the
immediate expiration of any outstanding options, vested or unvested.

          11. Applicable Law. Any question as to the scope, interpretation and effect of this
Agreement will be resolved under the substantive and procedural laws of the State of New Jersey and
the United States.

          12. Enforceability. All provisions and portions of this Agreement are severable.
If any provision or portion of this Agreement or the application of any provision or portion of the
Agreement shall be determined to be invalid or unenforceable to any extent or for any reason, all
other provisions and portions of this Agreement shall remain in full force and effect and shall
continue to be enforceable to the fullest and greatest extent permitted by law.

          13. No Representations. The Executive agrees that no promises, other than the
promises in this Agreement, have been made to him by or on behalf of Medco. He agrees that in
executing this Agreement he is not relying upon any statement or representation, other than those
set forth herein, made by or on behalf of Medco concerning his employment by Medco.

          14. Successors.

	 	(a)	 	This Agreement is personal to the Executive and without the prior
written consent of Medco shall not be assignable by the Executive. This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.
	 
	 	(b)	 	This Agreement shall inure to the benefit of and be binding upon
Medco and its successors and assigns.
	 
	 	(c)	 	Medco shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of Medco to assume expressly and agree to perform this
Agreement

9

 

	 	 	 	in the same manner and to the same extent that Medco would be required to perform
it if no such succession had taken place.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 	 	 
	 	 	MEDCO HEALTH SOLUTIONS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John L. Cassis
 

     John L. Cassis,

     Chairman, Compensation Committee
	 	 

	 	 	 	 	 
	 

	 	EXECUTIVE	 	 
	 
	 	 	 	 
	 

	 	/s/ David B. Snow, Jr.
 

David B. Snow, Jr.
	 	 

10

 

ATTACHMENT “A”

          A “Change in Control” shall mean the occurrence during the term of the Employment Period of
any one of the following events:

	 	(a)	 	An acquisition (other than directly from Medco) of any shares of Common Stock or
other voting securities of Medco by any “Person” (for purposes of this Section only, as
the term “person” is used for purposes of Section 13(d) or 14(d) of the Exchange Act),
immediately after which such Person has “Beneficial Ownership” (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of either
(i) the then outstanding shares of Common Stock or (ii) the combined voting power of
Medco’s then outstanding voting securities entitled to vote for the election of
directors (the “Voting Securities”); provided, however, in determining whether a Change
in Control has occurred, shares of Common Stock or Voting Securities which are acquired
in a “Non-Control Acquisition” (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A “Non-Control Acquisition” shall
mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof)
maintained by (A) Medco or (B) any corporation or other Person of which a majority of
its voting power or its voting equity securities or equity interest is owned, directly
or indirectly, by Medco (for purposes of this definition, a “Related Entity”), (ii)
Medco or any Related Entity, or (iii) any Person in connection with a “Non-Control
Transaction” (as hereinafter defined); or
	 
	 	(b)	 	The individuals who are members of the Board of Directors of Medco on February 10,
2009 (the “Incumbent Board”), (i) cease for any reason to constitute at least a
majority of the members of the Board of Directors of Medco, or (ii) following a Merger
(as hereinafter defined), do not constitute at least a majority of the board of
directors of (x) the Surviving Corporation (as hereinafter defined), if fifty percent
(50%) or more of the combined voting power of the then outstanding voting securities of
the Surviving Corporation is not Beneficially Owned, directly or indirectly by a Parent
Corporation, or (y) if there is one or more Parent Corporations, the ultimate Parent
Corporation (as hereinafter defined); provided, however, that if the election, or
nomination for election by the Company’s common stockholders, of any new director was
approved by a vote of at least a majority of the Incumbent Board, such new director
shall, for purposes of this Agreement, be considered as a member of the Incumbent
Board; provided, further, however, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as a result of an
actual or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors of Medco (a “Proxy Contest”), including by reason of
any agreement intended to avoid or settle any Proxy Contest; or
	 
	 	(c)	 	The consummation of:

          (i) A merger, consolidation or reorganization with or into Medco or a direct or
indirect subsidiary of Medco or in which securities of Medco are issued (a

11

 

“Merger”), unless the Merger is a “Non-Control Transaction.” A “Non-Control Transaction”
shall mean:

          (A) the stockholders of Medco immediately before such Merger own directly or
indirectly immediately following the Merger at least fifty percent (50%) of the
outstanding common stock and the combined voting power of the outstanding voting
securities of (x) the corporation resulting from such Merger (the “Surviving
Corporation”), if fifty percent (50%) or more of the combined voting power of the then
outstanding voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly by another corporation (a “Parent Corporation”), or (y) if there
is one or more Parent Corporations, the ultimate Parent Corporation;

          (B) the individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for the Merger, constitute at least a majority of
the members of the board of directors of, (x) the Surviving Corporation, if fifty percent
(50%) or more of the combined voting power of the then outstanding voting securities of
the Surviving Corporation is not Beneficially Owned, directly or indirectly by a Parent
Corporation, or (y) if there is one or more Parent Corporations, the ultimate Parent
Corporation; and

(C) no Person other than (1) Medco or another corporation that is a party to the
agreement of Merger, (2) any Related Entity, or (3) any employee benefit plan (or any
trust forming a part thereof) that, immediately prior to the Merger, was maintained by
Medco or any Related Entity, or (4) any Person who, immediately prior to the Merger had
Beneficial Ownership of twenty percent (20%) or more of the then outstanding shares of
Common Stock or Voting Securities, has Beneficial Ownership, directly or indirectly, of
twenty percent (20%) or more of the combined voting power of the outstanding voting
securities or common stock of (x) the Surviving Corporation, if fifty percent (50%) or
more of the combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly by a Parent
Corporation, or (y) if there is one or more Parent Corporations, the ultimate Parent
Corporation.

(ii) A complete liquidation or dissolution of Medco; or

(iii) The sale or other disposition of all or substantially all of the assets of Medco
and its subsidiaries taken as a whole to any Person (other than a transfer to a Related
Entity or under conditions that would constitute a Non-Control Transaction with the
disposition of assets being regarded as a Merger for this purpose or the distribution to
Medco’s stockholders of the stock of a Related Entity or any other assets).

     Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely
because any Person (the “Subject Person”) acquired Beneficial Ownership of more than the
permitted amount of the then outstanding shares of Common Stock or Voting Securities as a result
of the acquisition of shares of Common Stock or Voting Securities by Medco which, by reducing
the number of shares of Common Stock or Voting Securities then outstanding,

12

 

increases the proportional number of shares Beneficially Owned by the Subject Persons;
provided, that if a Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of shares of Common Stock or Voting Securities by Medco, and after
such share acquisition by Medco, the Subject Person becomes the Beneficial Owner of any
additional shares of Common Stock or Voting Securities which increases the percentage of the
then outstanding shares of Common Stock or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.

          Notwithstanding the foregoing, there shall not be a Change in Control if, in advance of such
event, the Executive agrees in writing that such event shall not constitute a Change in Control.

13

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