AMENDED AND
RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(“Agreement”) is made by and between EXPRESSJET
AIRLINES, INC. , a Delaware corporation (“Company”)
and KAREN P. MILES (“Employee”).
W I T N E S S
E T H:
WHEREAS, Company,
Continental Airlines, Inc. and Employee are parties to that certain
Employment Agreement dated as of April 17, 2002 (the
“Existing Agreement”); and
WHEREAS, Company and
Employee now desire to enter into this Agreement to replace and
supersede the Existing Agreement in its entirety effective as of the date hereof (the “Effective
Date”), except for provisions relevant to compliance with
Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), which provisions shall be effective as of
January 1, 2005 ;
NOW THEREFORE , for and in consideration of the mutual
promises, covenants and obligations contained herein, Company and
Employee agree as follows:
ARTICLE
I: EMPLOYMENT AND DUTIES
1.1 Employment;
Effective Date .
Beginning as of the Effective Date, Company agrees to employ
Employee and Employee agrees to be employed by Company, at will of
both Company and Employee, subject to the terms and conditions of
this Agreement.
1.2
Position
.
Beginning as of the Effective Date, Employee shall initially be
employed in the position of Company’s Vice President –
Human Resources and Administration. Company may subsequently
assign Employee to a different position or modify Employee’s
duties and responsibilities. Moreover, Company may assign
this Agreement and Employee’s employment to any subsidiary or
affiliate of Company.
1.3 Duties and
Services .
Employee
agrees to serve in the position assigned pursuant to paragraph 1.2
and to perform diligently and to the best of her abilities the
duties and services appertaining to such position as determined by
Company, as well as such additional duties and services which
Employee from time to time may be reasonably directed to perform by
Company.
ARTICLE
II :
AT-WILL EMPLOYMENT RELATIONSHIP
2.1 Employment
At-Will .
The
employment relationship between Employee and Company is
at-will. Each of Employee and Company shall have the right to
terminate the employment relationship at any time and for any
reason whatsoever, with or without cause, and without any liability
or obligation except as may be expressly provided in this
Agreement.
2.2 Notice of
Termination . If
Company or Employee desires to terminate Employee’s
employment hereunder, it or she shall do so by giving written
notice to the other party that it or she has elected to terminate
Employee’s employment hereunder and stating the effective
date and reason for such termination, provided that no such action
shall alter or amend any other provisions hereof or rights arising
hereunder.
2.3 Company’s
Right to Terminate . Company, acting pursuant to an
express resolution of the Board of Directors of Company (the
“Board of Directors”), shall have the right to
terminate Employee’s employment under this Agreement at any
time for any of the following reasons:
(i) upon
Employee’s death;
(ii) upon
Employee’s becoming incapacitated for a period of at least
180 days by accident, sickness or other circumstance which renders
her mentally or physically incapable of performing the material
duties and services required of her hereunder on a full-time basis
during such period;
(iii) for cause, which for
purposes of this Agreement shall mean Employee’s gross
negligence or willful misconduct in the performance of, or
Employee’s abuse of alcohol or drugs rendering her unable to
perform, the material duties and services required of her pursuant
to this Agreement;
(iv) for Employee’s
material breach of any provision of this Agreement which, if
correctable, remains uncorrected for 30 days following receipt by
Employee of written notice by Company of such breach; or
(v) for any other reason
whatsoever, in the sole discretion of the Board of
Directors.
2.4 Employee’s
Right to Terminate . Employee shall have the right
to terminate her employment under this Agreement at any time for
any of the following reasons:
(i) the assignment
to Employee of duties materially inconsistent with the duties
associated with the position described in paragraph 1.2 as such
duties are constituted as of the Effective Date;
(ii) a material
diminution in nature or scope of Employee’s authority,
responsibilities, or title from those applicable to her as of the
Effective Date;
(iii) the occurrence of
material acts or conduct on the part of Company or ExpressJet
Holdings, Inc. (“Holdings”) or their respective
officers or representatives which prevent Employee from performing
her duties and responsibilities pursuant to this
Agreement;
(iv) Company or Holdings
requiring Employee to be permanently based anywhere outside a major
urban center in Texas;
(v) the taking of any
action by Company or Holdings that would materially adversely
affect the corporate amenities enjoyed by Employee on the Effective
Date;
(vi) a material breach by
Company of any provision of this Agreement which, if correctable,
remains uncorrected for 30 days following receipt by Company of
written notice of such breach by Employee; or
(vii) for any other reason
whatsoever, in the sole discretion of Employee.
ARTICLE
III: COMPENSATION AND BENEFITS
3.1 Base
Salary .
During
the period of this Agreement, Employee shall receive a minimum
annual base salary equal to the greater of (i) $190,000.00 or (ii)
such amount as Company and Employee mutually may agree upon from
time to time. Employee’s annual base salary shall be
paid in equal installments in accordance with Company’s
standard policy regarding payment of compensation to employees but
no less frequently than semimonthly.
3.2
Bonus
Programs .
Employee
shall participate in each cash bonus program maintained by Company
or Holdings on and after the Effective Date (including without
limitation any such program maintained for the year during which
the Effective Date occurs) at a level which is not less than the
participation level made available to similarly situated employees
of the Company.
3.3 Other Company
Benefits . During
her employment hereunder, Employee and, to the extent applicable,
Employee’s family, dependents and beneficiaries, shall be
allowed to participate in all benefits, plans, and programs,
including improvements or modifications of the same, which are now,
or may hereafter be, available to similarly situated employees of
Company. Such benefits, plans and programs may include,
without limitation, profit sharing plan, thrift plan, annual
physical examinations, health insurance or health care plan, life
insurance, disability insurance, pension plan, pass privileges on
Company flights, flight privileges and the like. Company
shall not, however, by reason of this paragraph be obligated to
institute, maintain, or refrain from changing, amending or
discontinuing, any such benefit plan or program, so long as such
changes are similarly applicable to similarly situated employees
generally; provided, however, that Company shall not change, amend
or discontinue Employee’s Flight Privileges (as defined
below) without her prior written consent.
ARTICLE
IV: EFFECT OF TERMINATION
4.1 Effect on
Compensation .
Upon
termination of the employment relationship by either Employee or
Company, regardless of the reason therefore, all compensation and
all benefits to Employee hereunder shall terminate
contemporaneously with termination of her employment, except that
(A) if such termination shall constitute an Involuntary Termination
prior to a Change in Control or after the date that is eighteen
months after a Change in Control (as such term is defined in
paragraph 4.4), then, subject to the provisions of paragraphs 4.2
and 4.3, (i) Company shall provide Employee with Flight Privileges
(as such term is defined in paragraph 4.4) for the remainder of
Employee’s lifetime, (ii) Company shall provide Employee and
her eligible dependents with Continuation Coverage (as such term is
defined in paragraph 4.4) for the Severance Period (as such term is
defined in paragraph 4.4), (iii) Company shall pay Employee
the Monthly Severance Amount (as such term is defined in paragraph
4.4) each month during the Severance Period, (iv) Company may, in
the sole discretion of the Board of Directors or the Human
Resources Committee of the Board of Directors pay Employee a pro
rata target bonus as soon as administratively practicable after the
decision to pay the pro rata target bonus is made but in no event
later than two and one half months after the end of the calendar
year in which the decision is made, and (v) Company shall provide
Employee with Outplacement Services (as such term is defined in
paragraph 4.4), or (B) if such termination is a result of
Employee’s retirement under Company’s retirement policy
or program generally applicable to similarly situated employees of
Company, then Company shall, subject to the provisions of paragraph
4.3, provide Employee with Flight Privileges for the remainder of
Employee’s lifetime, or (C) if such termination shall
constitute an Involuntary Termination or a termination by Employee
of Employee’s employment with Company for any reason
encompassed by paragraph 2.4 and such termination occurs within
eighteen months after a Change in Control, then, subject to the
provisions of paragraphs 4.2 and 4.3, (1) Company shall provide
Employee with Flight Privileges for the remainder of
Employee’s lifetime, (2) Company shall provide Employee and
her eligible dependents with Continuation Coverage (as such term is
defined in paragraph 4.4) for the Severance Period (as such term is
defined in paragraph 4.4), (3) Company shall pay Employee on the
effective date of such termination a lump-sum cash payment in an
amount equal to the sum of (A) a pro rata bonus payment
(notwithstanding any contrary provision in Company’s cash
bonus program) equal to the amount of Employee’s annual base
salary pursuant to paragraph 3.1 at the rate in effect immediately
prior to Employee’s termination of employment, multiplied by
the target rate under Company’s cash bonus program at the
rate in effect for the year of termination, and further multiplied
by a fraction, the numerator of which is the number of days which
have elapsed in the calendar year during which the date of
termination falls, and the denominator of which is three hundred
sixty-five (365), plus (B) two times the Employee’s base
salary pursuant to paragraph 3.1 at the rate in effect immediately
prior to Employee’s termination of employment, plus (C) two
times the amount of Employee’s annual base salary pursuant to
paragraph 3.1 at the rate in effect immediately prior to
Employee’s termination of employment, multiplied by the
target rate under Company’s cash bonus program in effect for
the year of termination, and (4) Company shall provide Employee
with Outplacement Services (as such term is defined in paragraph
4.4). Notwithstanding anything contained herein, if
Employee’s employment with Company is terminated by reason of
an Involuntary Termination and a Change in Control occurs within
six months following such Involuntary Termination, Employee shall,
in lieu of the payments and benefits described in paragraph 4.1(A)
above, be entitled to the payments and additional benefits
described in this paragraph 4.1(C) with such additional payments
and increased benefits to be delivered as if such Involuntary
Termination occurred on the same date as, and immediately
following, the Change in Control. No remuneration or wages
earned by Employee during or with respect to the Severance Period
(whether earned as an employee, independent contractor, sole
proprietor, joint venturer, or otherwise) shall reduce
Company’s obligation to pay the Monthly Severance Amount each
month during the Severance Period. Company may set off any
amounts owed by Employee to Company or any of its affiliates
against any obligation to pay the Monthly Severance
Amount.
4.2 Liquidated
Damages . In light of the difficulties in estimating
the damages to Employee in the event Employee’s employment is
subject to an Involuntary Termination, Company and Employee hereby
agree (for themselves and for the express and directly enforceable
benefit of Company’s affiliates) that the payments and
benefits, if any, to be received by Employee pursuant to paragraph
4.1 shall be received by Employee as liquidated damages.
Payment of the compensation and benefits to Employee pursuant to
paragraph 4.1 shall be offset against any amounts to which Employee
may otherwise be entitled under any and all severance plans and
policies maintained by Company or its affiliates.
4.3 Certain
Post-Termination Obligations . As part of the
consideration for the compensation to be paid under this Agreement,
to protect the trade secrets and confidential information of
Company and its affiliates that have been and will in the future be
disclosed or entrusted to Employee, the business opportunities of
Company and its affiliates that have been and will in the future be
disclosed or entrusted to Employee, the relationships with
customers of Company and its affiliates that have been and will in
the future be developed in Employee, the special training and
knowledge relevant to Employee’s employment responsibilities
and duties, or the business goodwill of Company and its affiliates
that has been and will in the future be developed in Employee, and
as an additional incentive for Company to enter into this
Agreement, Company and Employee agree to the post-termination
obligations set forth in this Agreement. All payments and
benefits to Employee hereunder shall be subject to Employee’s
compliance with the following provisions for two full years after
the termination of Employee’s employment
hereunder:
(i) Employee shall,
upon reasonable notice, furnish such information and proper
assistance to Company and its affiliates as may reasonably be
required in connection with any litigation in which it or any of
its affiliates is, or may become, a party;
(ii) Employee will not,
directly or indirectly for Employee or for others, in any
geographic area or market where Company or any of its affiliates
are conducting any business or have during the previous 12 months
conducted such business:
(a) engage in any
Competitive Business (as defined below);
(b) render advice or
services to, or otherwise assist, any other person, association, or
entity who is engaged, directly or indirectly, in any Competitive
Business with respect to such Competitive Business; or
(c) induce any employee
of Company or any affiliate of Company to terminate his or her
employment with Company or such affiliate, or hire or assist in the
hiring of any such employee by any person, association, or entity
not affiliated with Company;
(iii) any public statements
made by Employee concerning Company or its affiliates, or their
officers, directors, or employees shall be submitted in writing for
prior approval by Company’s public relations and legal
departments, and Employee shall not make any such public statements
which are not so approved; and
(iv) upon termination of
employment, Employee shall (a) promptly return to Company all
property (including all keys, passes, credit cards, documents,
memoranda and computer hardware and software) of Company or any of
its affiliates then in her possession or control, and (b) in the
same manner as if she were still employed by Company, hold in
confidence, and not disclose to any person, all business plans,
trade secrets, and confidential or proprietary information of
Company or any of its affiliates, and shall not use any such plans,
secrets or information in a manner which is detrimental to Company
or its affiliates.
For purposes of this paragraph 4.3, the term “Competitive
Business” shall mean the business of owning, acquiring,
establishing, operating, and maintaining a regional airline in the
United States. Notwithstanding the foregoing, the
noncompetition obligations set forth in this paragraph shall not be
considered violated if Employee becomes an employee, officer,
consultant, advisor, or member of the board of directors of a
major, mainline airline; provided however, that, if such airline
also engages in a Competitive Business, then this exception shall
apply only if Employee’s primary duties, and the principal
portion of Employee’s working time, are related to the
business of such airline other than the Competitive
Business.
If Employee fails to comply with the above obligations, Company may
cease making any and all payments hereunder, and Company and
Company’s affiliates may cease extending benefits to Employee
and may recover by appropriate action instituted in any court of
competent jurisdiction any severance payments theretofore paid to
Employee. Employee agrees that the obligations of Employee
contained in this paragraph 4.3 are in addition to any rights
Company or Company’s affiliates may have in law or at equity,
and that it is not possible to measure in money the damages which
may be suffered by Company or Company’s affiliates if
Employee breaches any of the provisions of this paragraph
4.3. Therefore, if Employee breaches any of the provisions of
this paragraph 4.3, each of Company and Company’s affiliates
shall be entitled to an injunction restraining Employee from
violating such provisions. If Company or any affiliate of
Company shall institute any action or proceeding to enforce any
such obligations, Employee hereby irrevocably waives the claim or
defense that Company or an affiliate of Company has an adequate
remedy at law and agrees not to assert in any such action or
proceeding such claim or defense. The foregoing shall not
prejudice Company’s (or any of its affiliates’) right
to require Employee to account for and pay over to Company or a
Company affiliate, and Employee agrees to account for and pay over,
the compensation, profits, monies, accruals and other benefits
derived or received by Employee as a result of any transaction or
occurrence constituting a breach of this paragraph 4.3. The
duration of the obligations of Employee under this paragraph 4.3
shall be extended by and for the term of any period during which
Employee is in breach of this paragraph 4.3.
Company and Employee agree that the foregoing restrictions are
reasonable under the circumstances and that any breach of the
covenants contained in this paragraph 4.3 would cause irreparable
injury to Company. Employee understands that the foregoing
restrictions may limit Employee’s ability to engage in
certain businesses anywhere in the United States during the period
provided for above, but acknowledges that Employee will receive
sufficiently high remuneration and other benefits under this
Agreement to justify such restriction. Further, Employee
acknowledges that her skills are such that she can be gainfully
employed in non-competitive employment, and that the agreement not
to compete will in no way prevent her from earning a living.
Nevertheless, if any of the aforesaid restrictions are found by a
court of competent jurisdiction to be unreasonable, or overly broad
as to geographic area or time, or otherwise unenforceable, the
parties intend for the restrictions therein set forth to be
modified by the court making such determination so as to be
reasonable and enforceable and, as so modified, to be fully
enforced. By agreeing to this contractual modification
prospectively at this time, Company and Employee intend to make
this provision enforceable under the law or laws of all
applicable
