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Exhibit 10.21  

 
 

EXECUTIVE BONUS PLAN—FY06    
    

        So long as the Company achieves a minimum profit margin for FY06, as more fully described below, qualifying executives of the Company will be awarded a bonus in
accordance with the following computations: 

Base Bonus  

        The Base Bonus will be equal to the executive's base salary earned during the fiscal year times a Base Bonus Percentage assigned by the Board to his or her
position. For FY06, the Base Bonus Percentage for each executive position is as set forth below: 

	Title
 
	 	Bonus Percentage
	 
	President & CEO	 	75	%
	Senior Vice President & Chief Operating Officer	 	65	%
	Senior Vice President & Chief Financial Officer	 	65	%
	Senior Vice President—In-Flight and Administrative Services	 	55	%
	Vice President	 	45	%
	Senior Directors	 	30	%
	Directors	 	20	%

Profit Adjustment  

        The Base Bonus will then be adjusted based on the pre-tax profit margin achieved by the Company for the fiscal year as follows: 

PAB  =  BB × APM/TPM, where

	PAB	 	=	 	The executive's Profit Adjusted Bonus
	BB	 	=	 	The executive's Base Bonus
	APM	 	=	 	The Company's pre-tax profit margin, expressed as a percentage, adjusted for unusual items as approved by the Board, as subject to the Maximum Profit Margin described below
	TPM	 	=	 	The Target Pre-Tax Profit Margin as established by the Board for the fiscal year

provided,
no executive will be paid a bonus unless the Company's APM is at least equal to or greater than a Minimum Profit Margin
(mPM), and the APM cannot exceed a Maximum Profit Margin (MPM), each as established by the Board for the
fiscal year. 

        For
the Company's FY06, the TPM is 8%, the mPM is 2% and the  MPM is 12%. 

Competitive Performance Adjustment  

        The Profit Adjusted Bonus for each executive will be further adjusted based on the Company's financial performance in certain categories compared to a peer group
of competitors, each as determined by the Board in advance of the fiscal year, and calculated as follows: 

CAB = PAB × (PR/50%),
where 

	CAB	 	=	 	Competitive Adjusted Bonus
	PAB	 	=	 	Profit Adjusted Bonus
	PR	 	=	 	The Company's percentile ranking against the Peer Group in the performance category selected by the Board for the fiscal year

provided,
the PAB will not be adjusted below a minimum performance adjustment factor (mPF) or above a
maximum performance adjustment factor (MPF) as established by the Board in advance of the fiscal year.

 

        For
FY06, the Peer Group is all major and low-cost airlines not operating under bankruptcy protection at any time during the
measurement period; the performance category is Pre-Tax Profit Margin as calculated under GAAP for the 12 month period equal to the Company's fiscal year, excluding extraordinary
items; mPF is .5 if the PR is equal to or less than 25%; and  MPF is 1.5 if the PR is equal to or greater than 75%. 

Discretionary Adjustment  

        The CAB for any executive officer may be further increased or decreased by the Board in its sole discretion by anywhere from 0% to 20% based on individual
performance. 

        Notwithstanding
any provision of this Bonus Plan, the decision to grant a bonus to any employee of the Company and the terms and conditions of such bonus will rest with the Board in its
sole discretion. 

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Exhibit 10.22  

 
 

LONG TERM INCENTIVE PLAN—FY06    
    

        Qualifying officers and directors of the Company will participate in the Company's Long Term Incentive Plan in accordance with the provisions set forth below.
Elements of incentive compensation that may be awarded to qualifying officers and directors include Stock Options ("Options"), Stock-Only Stock Appreciation Rights ("SOSARs"), and
Restricted Stock Units ("RSUs"), each issued in accordance with the terms and provisions of the Frontier Airlines 2004 Equity Incentive Plan (the "2004 Plan")., as well as Cash-Based
Incentives ("CBIs"). 

        It
is the general intent of the Company's Long Term Incentive Plan to provide the Company's officers and directors with a package of incentives that equate to 110% of the value of the
incentive paid by comparably positioned employees at other airlines contained in the Company's peer group, as that peer group is identified by the Board from time to time (the "Peer Group"), subject
to adjustment ±10% based on individual performance. Prior to the beginning of each fiscal year, the Board, acting on the recommendations of the Compensation
Committee, will determine the Peer Group and total value of Options, SOSARs, RSUs and CBIs to be granted to each qualifying officer, senior director and director for the coming fiscal year. 

        Under
the Plan, a mix of Options or SOSARs, RSUs and CBIs will be available for award to Officers of the Company and CBIs and RSUs will be available for award to Senior Directors and
Directors of the Company. Of the total value of the incentive awards granted to Officers, it is intended that 40% will be represented by the value of granted Options or SOSARs, 40% will be represented
by the value of CBIs, and 20% will be represented by the value of the RSUs. Of the total value of the incentive awards granted to Senior Directors and Directors, 60% will be represented by the value
of CBIs, and 40% will be represented by the value of the RSUs. 

        The
dates on which incentives become exercisable or are earned or payable will be determined by the Board or the Committee administering the 2004 Plan in its sole discretion. Generally,
however, it is intended that Options and SOSARs will become exercisable in five equal installments, with the first installment becoming exercisable on the first anniversary of the date of grant and
remaining installments becoming exercisable on the next four anniversaries of such date, and RSUs will become exercisable in a single installment on the fifth anniversary of the date of grant. CBIs
will be paid as soon as possible at the end of thee fiscal years from the time the CBIs are awarded. 

Special Rules for Cash-Based Incentives  

        The value of the CBI identified for an individual officer, senior director or director in the advance of each
fiscal year is will be the target CBI ("TCBI") for such individual. The amount of the  TCBI paid to the
individual at the end of Performance Period (as defined below) will be adjusted as
follows: 

ACBI = TCBI × (PR/50%),
where 

	ACBI	 	=	 	Actual Cash-Based Incentive paid to the employee
	TCBI	 	=	 	Target Cash-Based Incentive
	PR	 	=	 	The Company's percentile ranking against the Peer Group in the long-term incentive performance category (the "LTIPC") over the performance period ("Performance Period"), each as determined by the Board for the fiscal year

provided,
no CBI will be paid to any individual if the Company's performance if the Company's performance in the  LTIPC over the Performance
Period does not exceed a minimum target (the
"PCMT"), and provided further that if the Company's performance over the Performance Period does exceed
the PCMT, the ACBI will not be adjusted below a minimum performance adjustment factor
(mPF) or above a maximum performance adjustment factor (MPF) as established by the Board in advance of
the fiscal year.

 

        For
FY06, the Peer Group is all major and low-cost airlines not operating under bankruptcy protection at any time during the  Performance Period; the
Performance Period is the 36 month period equating to the Company's FY06,
FY07 and FY08; LTIPC is the annual Pre-Tax Profit Margin as calculated under GAAP for the Performance
Period, excluding extraordinary items; PCMT is 4%; the mPF is .5 when the PR is
equal to or less than 25%; and MPF is 1.5 when the PR is equal to or greater than 75%. 

        Notwithstanding
any provision of this Long-Term Incentive Plan, the decision to grant long term incentive compensation to any employee of the Company and the terms and
conditions of such grant, will rest with the Board in its sole discretion. 

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Exhibit 10.23  

FRONTIER AIRLINES, INC.

2004 EQUITY INCENTIVE PLAN  

 
 

STOCK APPRECIATION RIGHTS AGREEMENT    
    

        THIS STOCK APPRECIATION RIGHTS AGREEMENT ("Agreement") is made as
of                        , 2005 (the"Grant Date"), by
and between Frontier Airlines, Inc., a Colorado corporation (together with any affiliate, the "Company"), and
the                        (the "Grantee"). 

        The
Company and the Grantee therefore agree as follows: 

        1.    Definitions.    The following terms, when used in this
Agreement, have the following meanings: 

	(a)
	"Base Price" means
$                        .

	(b)
	"Business Day" means any day other than Saturday, Sunday or a day on which banking institutions in Denver,
Colorado, are required or authorized to be closed.

	(c)
	"Cause" the commission of any act of fraud, embezzlement or dishonesty by the Grantee, any unauthorized use or
disclosure by the Grantee of any confidential information or trade secrets of the Company, any other intentional misconduct by the Grantee that adversely affects the business affairs of the Company or
any other conduct that violates the Company's policies or procedures.

	(d)
	"Close of Business" means, on any day, 5:00 p.m., Denver, Colorado time.

	(e)
	"Code" means the Internal Revenue Code of 1986, as amended.

	(f)
	"Committee" means the Compensation Committee of the Board of Directors of the Company.

	(g)
	"Disability; Disabled" means the status granted to a Grantee when the Grantee suffers a physical or mental
condition or illness that renders the Grantee, even with attempts by the Company to make reasonable accommodations, totally and permanently incapable of performing essential functions of his or her
job at the Company.

	(h)
	"Fair Market Value" means the closing price of the Stock on the principal exchange or market on which the Stock
is traded on the day as of which Fair Market Value is determined or, if the shares are not traded on that day, the next following trading day.

	(i)
	"Plan" means the Frontier Airlines 2004 Equity Incentive Plan.

	(j)
	"Required Withholding Amount" means an amount that is equal to the amount of all federal, state and local taxes
required to be withheld by the Company upon exercise of a SAR, as determined by the Committee.

	(k)
	"Retirement" means the status granted to an individual who retires from employment with the Company after
completing at least ten (10) years of service with the Company, which need not be continuous, provided the sum of the age on the date of termination of employment plus years of service
equals at least 65.

	(l)
	"SAR" or "SARs" means, individually, a stock appreciation right and in the plural, the stock appreciations
rights granted pursuant to this Agreement.

	(m)
	"Stock" means the common stock of the Company, no par value.

	(n)
	"Term" means the period commencing on the Grant Date and expiring on the tenth anniversary of the Grant Date. 

 

        2.    Grant of Stock Appreciation Rights.    Subject to the terms and
conditions herein, pursuant to the Plan the Company hereby grants to the Grantee SARs with respect to            shares of Stock. The SARs consist of a single SAR for each share of Stock.
The SARs
granted hereunder will be valid for the Term, subject to earlier termination as provided in Section 7 below. Upon exercise of a SAR in accordance with this Agreement, the Company will, subject
to Section 5 below, pay to the Grantee consideration equal to the amount, if any, by which the Fair Market Value of a share of Stock on the date of exercise exceeds the Base Price of such SAR,
subject to adjustment in accordance with Section 11 of the Plan. The consideration shall be limited to a number of shares of Stock equal to the amount payable divided by the Fair Market Value
of a share of Stock on the date the SAR is exercised. If at any time the number of shares of Stock to be issued to the Grantee pursuant to this Agreement includes a fractional share, the number of
shares of Stock actually issued will be rounded down to the nearest whole share of Stock. 

        3.    Vesting; Conditions of Exercise.    Except as otherwise provided
in this Agreement, SARs may not be exercised until the Grantee has completed one full year of continuous employment after the Grant Date. Thereafter, the SARs will become vested and exercisable in
increments in accordance with the following schedule, so long as the Grantee has remained in the continuous employment of the Company from the Grant Date until the Vesting Date: 

	Anniversary of the Grant Date
 
	 	Percentage of SARs That Shall

Become Vested and Exercisable

	First	 	20%
	Second	 	an additional 20%
	Third	 	an additional 20%
	Fourth	 	an additional 20%
	Fifth	 	an additional 20%

        The
number of SARs that are vested and exercisable shall be cumulative, so that once an SAR has become vested and exercisable, it shall continue to be vested and exercisable, in whole or
in part, for the remainder of the Term, unless terminated earlier as provided in this Agreement. 

        4.    Manner of Exercise.    SARs may be exercised in whole or in part
by providing written notice (the "Notice") in the form attached hereto as Exhibit A or such other form as the Committee may require from time to time together with any other documentation that
the Committee may reasonably require (together, the "Notice Documents"). SARs will be considered exercised as to the number of SARs specified in the Notice on the latest of (i) the date of
exercise designated in the Notice, (ii) if the date so designated is not a Business Day, the first Business Day following such date or (iii) the earliest Business Day by which the
Company has received all of the Notice Documents. 

        5.    Mandatory Withholding for Taxes.    The Grantee acknowledges
that the Grantee is obligated to pay the Required Withholding Amount with respect to the exercise of any SARs. Grantee hereby authorizes the Company to deduct from the shares of Stock otherwise
deliverable upon exercise of any SARs a number of shares of Stock (valued at their Fair Market Value on the date of exercise) that is equal to the Required Withholding Amount. 

        6.    Payment or Delivery by the Company.    As soon as practicable
after receipt of all Notice Documents, and subject to the deductions for the payment of the Required Withholding Amount, the Company will deliver or cause to be delivered to the Grantee the amount of
consideration determined under the final sentence of Section 2 above, which consideration shall consist solely of shares of Stock (valued at their Fair Market Value on the date of exercise).
The delivery of shares of Stock will be deemed effected for all purposes when certificates representing such shares have been delivered by any of the following means: (i) personally to the
Grantee; (ii) deposited in the United States mail, addressed to the Grantee at the address indicated on the Notice, or (iv) as may be otherwise

 
designated by the Grantee in writing, provided, if the Grantee requests the shares of Stock be delivered by overnight or express courier, Grantee will be obligated to pay for the delivery charges. 

        7.    Expiration and Termination.    The SARs will expire on the last
day of the Term or prior to such time as follows: 

        (a)    Termination for Cause.    If the Grantee's employment by the
Company is terminated for Cause, as determined by the Company in its sole discretion, at any time during the Term, the SARs, whether or not vested, shall become void, shall be forfeited and shall
terminate immediately upon the termination of employment of the Grantee. 

        (b)    Termination on Account of Disability.    If the Grantee's
employment with the Company terminates by reason of Disability, the SARs will become fully vested and exercisable on the date of such termination. The SARs may be exercised by the Grantee or the
Grantee's representative until the earlier of (i) one year after the termination of employment or (ii) the end of the Term. 

        (c)    Death.    If the Grantee dies during the Term while still
employed by the Company, the SARs shall become fully vested and exercisable on the date of the Grantee's death if not otherwise fully vested and exercisable. The SARs may be exercised by the Grantee's
Beneficiary until the earlier of (i) the date that is one year after the date of death or (ii) the end of the Term. 

        (d)    Termination Due to Retirement.    If the Grantee terminates
employment on account of Retirement and the SAR is not then fully vested and exercisable, the SAR shall be vested as to (1) the number of shares that were vested on the anniversary of the Grant
Date immediately preceding the date of termination of employment plus (2) a pro rata portion of the number of additional shares that would have vested on the anniversary of the Grant Date
immediately following the date of termination of employment based on the ratio of (i) the number of days past from the prior anniversary of the Grant Date to (ii) the number
of days from the prior anniversary of the Grant Date to the next anniversary of the Grant Date. The portion of the SAR so vested may be exercised by the Grantee until the earlier of
(i) the third anniversary of the date of Retirement, or (ii) the end of the SAR Period. 

        (e)    Termination for Other Reasons.    If the Grantee terminates
employment during the Term for any reason other than cause, Disability, death, or Retirement the SARs may be exercised by the Grantee until the earlier of (i) three (3) months following
the date of such termination of employment, or (ii) the end of the Term. In any such case, the SARs may be exercised only as to the shares which had become exercisable on or before the date of
termination of employment. 

        (f)    Designation of Beneficiary.    The Grantee may designate a
beneficiary by completing a beneficiary designation from approved by the Company and delivering the completed designation form to the Human Resources Department of the Company. The person who is the
Grantee's named beneficiary at the time of his or her death (herein referred to as the "Beneficiary") shall be entitled to exercise the SARs, to the extent it is exercisable, after the death of the
Grantee within the time limits set forth above. The Grantee may from time to time revoke or change his or her Beneficiary without the consent of any prior Beneficiary by filing a new designation with
the Human Resources Department of the Company. The last such designation received by the Company will be controlling; provided, however, that no designation, or change or revocation thereof, shall be
effective unless received by the Company prior the Grantee's death, and in no event shall any designation be effective as of a date prior to such receipt. If the Company is in doubt as to the right of
any person to exercise the SARs, the Company may refuse to recognize such exercise, without liability for any

 
interest or dividends thereon, until the Compensation Committee of the Company's Board of Directors (the "Committee") determines the person entitled to exercise such SARs, which determination shall be
final and conclusive. 

        8.    Automatic Exercise of SARs.    Immediately prior to the
termination of SARs, as provided in Section 1(o) or Section 7 above, all SARs that are exercisable immediately prior to the termination will be deemed to have been exercised by the
Grantee with no other act or notice. 

        9.    Restriction on Transferability; Nonalienability of Benefits.    

        (a)    Limitation on Transferability.    SARs, whether or not vested,
may not be sold, assigned, transferred by gift or otherwise, pledged or hypothecated, or otherwise disposed of, by operation of law or otherwise, and, during the Grantee's lifetime, are exercisable
only by the Grantee or the Grantee's court appointed legal representative. If Grantee has not designated a Beneficiary under Section 7(e), or if the designated beneficiary does not survive the
Grantee's death, the SARs will pass by will or the laws of descent and distribution. Following the Grantee's death, the SARs, if otherwise exercisable, may be exercised by the person to whom such
right passes according to the foregoing and such person will be deemed the Grantee for purposes of any applicable provisions of this Agreement. 

        (b)    Nonalienation of Benefits.    Except as provided in subsection
9(a) above, (i) no right or benefit under this Agreement will be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge,
and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same will be void, and (ii) no right or benefit hereunder will in any
manner be liable for or subject to the debts, contracts, liabilities or torts of the Grantee or other person entitled to such benefits. 

        10.    No Rights as a Shareholder.    The Grantee will not, by reason
of SARs granted under this Agreement, be deemed for any purpose to be, or to have any of the rights of, a shareholder of the Company or of the Company with respect to any shares of Stock. Upon
exercise of an SAR and the transfer of a share of Stock to the Grantee, the Grantee shall have all of the rights of a shareholder of the Company. 

        11.    Adjustments of and Changes in the Common Stock.    The SARs
shall be adjusted as provided in Section 11 of the Plan; provided that no adjustment shall be contrary to Code section 409A or shall be effected in a manner that would subject the
Grantee to taxes and penalties under Code section 409A. 

        12.    Restrictions Imposed by Law.    The Grantee will not exercise
the SARs, and the Company will not be obligated to cause to be issued any shares of Stock, if counsel to the Company determines that such exercise or issuance would violate any applicable law or any
rule or regulation of any governmental authority or any rule or regulation of, or agreement of the Company with, any securities exchange or association upon which shares of Stock are listed or quoted.
The Company will in no event be obligated to take any affirmative action in order to cause the exercise of the SARs or the resulting payment of cash or issuance of Stock to comply with any such law,
rule, regulation or agreement. 

        13.    Notice.    Any notice required or permitted to be given under
this Agreement shall be in writing and shall be given by first class registered or certified mail, postage prepaid, or by personal deliver to the appropriate party, address: 

	(a)
	If to the Company, to Frontier Airlines, Inc., Attention: Corporate Secretary, 7001 Tower Road, Denver, Colorado
80249-7312, or at such other address as may have been furnished to the Grantee in writing by the Company; or 

 

	(b)
	If to the Grantee, at the address indicated below the Grantee's signature on the last page of this Agreement, or at such other
address as may have been furnished to the Company in writing by the Grantee. 

        Any
such notice shall be deemed to have been given in as of the second day after deposit in the United States mails, postage prepaid, properly addressed as set forth above, in the case
of mailed notice, or as of the date delivered in the case of personal delivery. 

        14.    Amendment.    Notwithstanding any other provision hereof, this
Agreement may be supplemented or amended from time to time as approved by the Committee. Without limiting the generality of the foregoing, without the consent of the Grantee, this Agreement may be
amended or supplemented from time to time as approved by the Committee (i) to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any
other provision herein, or (ii) to make such other changes as the Company, upon advice of counsel, determines are necessary or advisable because of the adSAR or promulgation of, or change in or
of the interpretation of, any law or governmental rule or regulation, including Section 409A of the Code and any applicable federal or state securities laws; and subject to any required action
by the Board or the stockholders of the Company, and subject to the limitation of any federal or state law tax or securities laws, the SARs granted under this Agreement may be canceled by the Company
and a new grant made in substitution therefor, provided that the grant so substituted will satisfy all of the requirements of the Plan as of the date such new grant is made and no such action will
adversely affect any SARs to the extent then exercisable. 

        15.    Rights to Employment.    Nothing contained in this Agreement,
and no action of the Company or the Committee with respect hereto, will confer or be construed to confer on the Grantee any right to continue in the employ of the Company or interfere in any way with
the right of the Company to terminate the Grantee's employment at any time, with or without cause, subject to the provisions of any employment agreement between the Grantee and the Company. This
Agreement is limited solely to governing the rights and obligations of the Grantee with respect to the SARs. 

        16.    Governing Law.    This Agreement will be governed by, and
construed in accordance with, the internal laws of the State of Colorado. Each party irrevocably submits to the general jurisdiction of the state and federal courts located in the State of Colorado in
any action to interpret or enforce this Agreement and irrevocably waives any objection to jurisdiction that such party may have based on inconvenience of forum. 

        17.    Grantee Acceptance.    The Grantee will signify acceptance of
the terms and conditions of this Agreement by signing in the space provided at the end hereof and returning a signed copy to the Company.

 

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

	 	FRONTIER AIRLINES, INC.
	

 	

By:	

	

 	

Name:	

	

 	

Title:	

	
 	

GRANTEE
	

 	

	

 	

Name:	

	

 	

Address:	

EXHIBIT A  

To Stock Appreciation Rights Agreement

between Frontier Airlines, Inc. and Grantee  

 
  NOTICE OF EXERCISE OF STOCK APPRECIATE RIGHTS
  UNDER FRONTIER AIRLINES, INC. 2004 EQUITY INCENTIVE PLAN    
    

	TO:	 	Frontier Airlines, Inc.

7001 Tower Road

Denver, Colorado 80249

Fax No. 720-374-4379

Attn: Corporate Secretary

	

FROM:	
 	

	
 	

(SARs Participant)
	

DATE:	
 	

	
 	

 

        The
undersigned hereby elects to exercise the following Stock Appreciation Rights ("SARs") pursuant to and subject to the provisions of the Frontier Airlines, Inc. ("Frontier"),
2004 Equity Incentive Plan (the "Plan") and the applicable SAR agreement. 

	Date of grant of SARs and grant number:	 	
	 	 
	

Base Price of SARs:	
 	

	
 	

 
	

Number of SARs being exercised:	
 	

	
 	

 

        Please
deliver the net Frontier shares due upon exercise to the Grantee at the following address via (check one) o personal delivery;
o U.S. Postal Service; o overnight or second day express delivery (at my expense): 

	

 	
 	

 
	
	 	 
	

	
 	

 

        I
understand that the above-described SARs will be considered exercised upon receipt of this Notice by Frontier. I also understand that Frontier will and I hereby authorize Frontier to
withhold a sufficient number of shares of stock to cover any amounts required by law for the payment of applicable taxes with respect to my exercise of these SARs or any other amounts owing to
Frontier. 

	

 	
 	

 
	
 Signature of Grantee	 	 
	

 	
 	

 
	
 Print Name	 	 

	

E-mail:	
 	

	
 	

 

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STOCK APPRECIATION RIGHTS AGREEMENT

NOTICE OF EXERCISE OF STOCK APPRECIATE RIGHTS UNDER FRONTIER AIRLINES, INC. 2004 EQUITY INCENTIVE PLAN

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