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Expressjet Holdings Inc – ‘DEFM14A’ on 10/18/10

On:  Monday, 10/18/10, at 12:00pm ET   ·   Effective:  10/18/10   ·   Accession #:  1193125-10-230759   ·   File #:  1-31300

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

10/18/10  Expressjet Holdings Inc           DEFM14A    10/18/10    1:1.2M                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Definitive Proxy Statement                          HTML   1.08M 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  x                            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

EXPRESSJET HOLDINGS, INC.

(Name of registrant as specified in its charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):

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Dear Stockholder:

The Board of Directors of ExpressJet Holdings, Inc. (“we,” “us” or “ExpressJet”) has unanimously approved a merger agreement providing for ExpressJet to be acquired by SkyWest, Inc. (“SkyWest”). You are cordially invited to attend a special meeting of ExpressJet’s stockholders to be held at 10:00 a.m., Central Time, on November 10, 2010, at the Houston Marriott North at Greenspoint, 255 N. Sam Houston Parkway East, Houston, Texas 77060.

At the special meeting, you will be asked to consider and vote upon a proposal to adopt and approve the merger agreement entered into on August 3, 2010, pursuant to which an indirect wholly owned subsidiary of SkyWest would merge with and into ExpressJet, with ExpressJet surviving as an indirect wholly owned subsidiary of SkyWest. If the merger contemplated by the merger agreement is completed, the holders of our common stock will receive $6.75 in cash, without interest and less applicable withholding tax, for each share of our common stock that they own immediately prior to the effective time of the merger, unless they exercise and perfect their appraisal rights under the Delaware General Corporation Law.

After careful consideration, the ExpressJet Board of Directors approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and unanimously declared that the merger agreement, the merger and the other transactions contemplated by the merger agreement are advisable and in the best interests of the stockholders of ExpressJet. THE EXPRESSJET BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ADOPTION AND APPROVAL OF THE MERGER AGREEMENT AND FOR THE PROPOSAL TO ADJOURN OR POSTPONE THE SPECIAL MEETING, IF NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES.

The proxy statement attached to this letter provides you with information about the proposed merger and the special meeting of ExpressJet’s stockholders. We encourage you to read the entire proxy statement carefully. You may also obtain more information about ExpressJet from documents ExpressJet has filed with the Securities and Exchange Commission.

Your vote is important. Adoption and approval of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock. The failure of any stockholder to vote will have the same effect as a vote against adopting and approving the merger agreement. Accordingly, whether or not you plan to attend the special meeting, you are requested to promptly vote your shares by completing, signing and dating the enclosed proxy card and returning it in the envelope provided, or by voting over the telephone or the Internet as instructed in these materials. If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote FOR adoption and approval of the merger agreement and FOR adjourning or postponing the special meeting, if necessary or appropriate, to solicit additional proxies.

Voting by proxy will not prevent you from voting your shares in person if you subsequently choose to attend the special meeting.

Thank you for your cooperation and continued support.

Very truly yours,

George Bravante

Chairman of the Board of Directors

THIS PROXY STATEMENT IS DATED OCTOBER 18, 2010 AND IS FIRST BEING MAILED TO STOCKHOLDERS OF EXPRESSJET HOLDINGS, INC. ON OR ABOUT OCTOBER 18, 2010.

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EXPRESSJET HOLDINGS, INC.

700 N. Sam Houston Parkway West, Suite 200

Houston, Texas 77067

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD NOVEMBER 10, 2010

To the Stockholders of ExpressJet Holdings, Inc.:

A special meeting of stockholders of ExpressJet Holdings, Inc., a Delaware corporation (“ExpressJet”), will be held at 10:00 a.m., Central Time, on November 10, 2010, at the Houston Marriott North at Greenspoint, 255 N. Sam Houston Parkway East, Houston, Texas 77060, for the following purposes:

Only stockholders of record at the close of business on September 27, 2010 are entitled to notice of and to vote at the special meeting and at any adjournment or postponement of the special meeting. All stockholders of record are cordially invited to attend the special meeting in person. To ensure your representation at the special meeting in case you cannot attend, you are urged to vote your shares by completing, signing, dating and returning the enclosed proxy card as promptly as possible in the postage prepaid envelope enclosed for that purpose, or by submitting your proxy by telephone or through the Internet. Any stockholder attending the special meeting may vote in person even if he or she has returned or otherwise submitted a proxy card.

Stockholders of ExpressJet who do not vote in favor of adopting and approving the merger agreement will have the right to seek appraisal of the fair value of their shares if the merger is completed, but only if they submit a written demand for appraisal to ExpressJet prior to the time the vote is taken on the merger agreement and comply with all other requirements of the Delaware General Corporation Law (“DGCL”). A copy of the applicable DGCL statutory provisions is included as Annex C to the accompanying proxy statement, and a summary of these provisions can be found under the caption “Appraisal Rights” in the accompanying proxy statement.

The adoption and approval of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of our common stock. The failure to vote will have the same effect as a vote against the merger. Even if you plan to attend the special meeting in person, please complete, sign, date and return the enclosed proxy card or vote over the telephone or the Internet as instructed in these materials as promptly as possible to ensure that your shares will be represented at the special meeting if you are unable to attend. If you do attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person. If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote for the adoption and approval of the merger agreement and for adjourning or postponing the special meeting, if necessary or appropriate, to solicit additional proxies. If you fail to return your proxy card, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting, and will effectively be counted as a vote against adoption and approval of the merger agreement.

Houston, Texas

October 18, 2010

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TABLE OF CONTENTS

ANNEX A—Agreement and Plan of Merger

ANNEX B—Opinion of Goldman, Sachs & Co.

ANNEX C—Section 262 of the Delaware General Corporation Law

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The merger agreement is attached as Annex A to this proxy statement.

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If your shares of common stock are held in “street name” by your broker, you should have received a proxy card and voting instructions with these proxy materials from your broker rather than from the Company. Your broker will vote your shares only if you provide instructions to your broker on how to vote. You should instruct your broker to vote your shares by following the procedures provided by your broker. Without such instructions, your shares will not be voted, which will have the same effect as voting against the merger. See “The Special Meeting of the Company’s Stockholders—Voting by Proxy.”

We are providing Internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

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If you are the beneficial owner of shares of our common stock, you are invited to attend the special meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the special meeting, unless you obtain a legal proxy from your broker, bank or nominee giving you the right to vote the shares at the special meeting.

Even if you plan to attend the special meeting as a stockholder of record, we recommend that you also submit your proxy card or voting instructions as described in the Q&A entitled “How do I vote?” above so that your vote will be counted if you later decide not to attend the special meeting.

If you own shares of our common stock that are held in “street name” by your broker, you will receive instructions from your broker as to how to surrender your “street name” shares and receive cash for those shares following the completion of the merger.

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Morrow & Co., LLC

470 West Avenue

Stamford, Connecticut 06902

Call Collect: (203) 658-9400

or

Toll-Free: (800) 662-5200

Email: XJT@Morrowco.com

You may also wish to consult your legal, tax and financial advisors with respect to any aspect of the merger, the merger agreement or other matters discussed in this proxy statement.

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SUMMARY

This summary does not contain all of the information that is important to you. You should carefully read the entire proxy statement to fully understand the proposed merger. The merger agreement is attached as Annex A to this proxy statement. We encourage you to read the merger agreement because it is the legal document that governs the merger.

The Proposed Transaction

Board Recommendation (see page 29)

The Board, by unanimous vote, has determined that it is advisable and in the best interests of ExpressJet and its stockholders to consummate the merger and the other transactions contemplated by the merger agreement, and unanimously recommends that stockholders vote FOR the proposal to adopt and approve the merger agreement and FOR the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies.

Reasons for the Merger (see page 29)

The Board considered a number of factors in making its determination that the merger and the other transactions contemplated by the merger agreement are advisable and in the best interests of ExpressJet and its stockholders, including the following:

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The Board also identified and considered a number of countervailing factors and risks to ExpressJet and its stockholders relating to the merger and the merger agreement, including the following:

Opinion of the Company’s Financial Advisor (see page 35)

Goldman Sachs delivered its opinion to ExpressJet’s Board that, as of August 3, 2010, and based upon and subject to the factors and assumptions set forth therein, the $6.75 per share in cash to be paid to the holders (other than SkyWest and its affiliates) of shares of ExpressJet common stock pursuant to the merger agreement was fair from a financial point of view to such stockholders.

The full text of the written opinion of Goldman Sachs, dated as of August 3, 2010, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached to this proxy statement as Annex B. Goldman Sachs provided its opinion for the information and assistance of ExpressJet’s Board in connection with its consideration of

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the merger. The Goldman Sachs opinion is not a recommendation as to how any holder of shares of common stock of ExpressJet should vote with respect to the merger or any other matter. Pursuant to an engagement letter between ExpressJet and Goldman Sachs, ExpressJet will pay Goldman Sachs a transaction fee of approximately $3,500,000, all of which was contingent upon execution of the merger agreement.

For a more complete description, see “The Merger — Opinion of the Company’s Financial Advisor” beginning on page 35. See also Annex B to this proxy statement.

Financing

ExpressJet and SkyWest estimate that the total amount of funds necessary to pay the merger consideration is approximately $137.3 million. The merger agreement does not contain any financing-related closing condition.

Material U.S. Federal Income Tax Consequences of the Merger (see page 47)

In general, the merger will be a taxable transaction for holders of shares of ExpressJet’s common stock. For U.S. federal income tax purposes, you will generally recognize a gain or loss measured by the difference, if any, between the cash you receive (before reduction for any applicable withholding tax) in the merger and your adjusted tax basis in the shares exchanged in the merger. Gain or loss will be determined separately for each block of your shares (i.e., shares acquired at the same cost in a single transaction). You are urged to consult your own tax advisor about the tax consequences to you of the merger.

Required Antitrust and Other Regulatory Approvals (see page 48)

Under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), the merger may not be consummated until notification and report forms have been filed with the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”) and the Federal Trade Commission by ExpressJet and SkyWest, and the applicable waiting period has expired or been terminated. ExpressJet and SkyWest filed the notification and report forms under the HSR Act with the Federal Trade Commission and the Antitrust Division on August 30, 2010, and, on September 13, 2010, ExpressJet and SkyWest were notified by the Federal Trade Commission that it had granted early termination of the waiting period under the HSR Act with respect to the merger.

In addition to the antitrust filings and clearances described above, ExpressJet and SkyWest must obtain approvals from various other U.S. regulatory agencies, including the Department of Transportation and the Federal Aviation Administration, except for any governmental approvals the absence of which would not reasonably be expected to have a material adverse effect on ExpressJet or SkyWest.

While ExpressJet has no reason to believe it will not be possible to obtain these regulatory approvals in a timely manner and without the imposition of burdensome conditions, there is no certainty that these approvals will be obtained within the period of time contemplated by the merger agreement or on conditions that would not be detrimental.

Under the merger agreement, ExpressJet and SkyWest have each agreed to take or cause to be taken all actions to obtain all regulatory and governmental approvals necessary, proper or advisable to complete the merger. Notwithstanding that agreement, SkyWest is permitted to terminate the merger agreement if, as a condition to obtaining approval of the merger under applicable U.S. antitrust laws, SkyWest is required to enter into any settlement, undertaking, consent decree, stipulation or agreement with any governmental authority that would reasonably be expected to result in a material adverse effect on SkyWest Airlines or Atlantic Southeast (in each case, together with its subsidiaries); provided that in such event, SkyWest must pay ExpressJet a termination fee of $4.0 million.

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Ownership of ExpressJet Common Stock by SkyWest

As of the record date, SkyWest, through its wholly owned subsidiary, Atlantic Southeast, owned 465,446 shares of ExpressJet common stock, or 2.3% of the common stock outstanding on that date.

The Special Meeting of the Company’s Stockholders (see page 15)

Appraisal Rights (see page 66)

If certain criteria are satisfied, the DGCL provides you with the right to seek an appraisal of your shares, provided that you perfect that right in the manner provided for in the DGCL. This means that if you are not satisfied with the amount you are receiving in the merger, you may be entitled to have the value of your shares determined by a Delaware court and to receive payment based on that valuation. The amount you ultimately receive as a dissenting stockholder in an appraisal proceeding may be more, the same as or less than the amount you would be entitled to receive under the terms of the merger agreement.

The Company’s Stock Price (see page 63)

Shares of ExpressJet’s common stock are listed on The New York Stock Exchange (the “NYSE”) under the trading symbol “XJT.” On August 3, 2010, which was the last trading day before the announcement of the merger, ExpressJet’s common stock closed at $3.28 per share. On October 13, 2010, which was the last practicable trading day before this proxy statement was printed, ExpressJet’s common stock closed at $6.70 per share.

Non-Solicitation of Other Offers (see page 57)

The merger agreement contains restrictions on ExpressJet’s ability to solicit, or engage in discussions or negotiations with any third party regarding, any proposal to acquire a significant interest in ExpressJet.

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Notwithstanding these restrictions, under certain limited circumstances, the Board may respond to an unsolicited competing proposal and terminate the merger agreement to enter into an acquisition agreement with respect to a superior proposal.

Conditions to Completion of the Merger (see page 56)

Each party’s obligation to complete the merger is subject to the satisfaction or waiver of various conditions, including the following:

SkyWest’s and merger sub’s obligations to complete the merger are subject to the satisfaction or waiver of additional conditions, including the following:

ExpressJet’s obligation to complete the merger is subject to the satisfaction or waiver of additional conditions, including the following:

Termination of the Merger Agreement (see page 59)

The merger agreement can be terminated under certain circumstances, including:

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Termination Fees and Expenses (see page 60)

ExpressJet is required to pay SkyWest a $4.0 million termination fee if the merger agreement is terminated:

SkyWest is required to pay ExpressJet a $4.0 million termination fee if the merger agreement is terminated by SkyWest because as a condition to obtaining approval of the merger under applicable U.S. antitrust laws, SkyWest is required to enter into any settlement, undertaking, consent decree, stipulation or agreement with any governmental authority that would reasonably be expected to result in a material adverse effect on SkyWest Airlines or Atlantic Southeast (in each case, together with its subsidiaries).

Except as described above, all costs and expenses incurred in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party incurring those costs or expenses.

Treatment of Options and Restricted Stock; Employee Matters (see pages 51 and 61)

The merger agreement contains provisions relating to the benefits that ExpressJet’s employees (including executive officers) and non-employee directors will receive in connection with and following the merger. In particular, under the merger agreement:

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Interests of the Company’s Directors and Executive Officers in the Merger (see page 32)

You should be aware that some of ExpressJet’s directors and executive officers have interests in the merger that are different from, or are in addition to, the interests of ExpressJet’s stockholders generally. These interests relate to equity securities held by such persons and their affiliates; change of control severance provisions applicable to ExpressJet’s executive officers; and indemnification of ExpressJet’s directors and officers by the surviving corporation following the merger.

Shares Held by Directors and Executive Officers (see page 64)

As of the close of business on the record date, the current directors and executive officers of ExpressJet were deemed to beneficially own approximately 991,494 shares of ExpressJet common stock, which represented approximately 4.9% of the shares of ExpressJet common stock outstanding on that date. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the “SEC”), as described below under “Security Ownership of Certain Beneficial Owners and Management.”

Procedure for Receiving Merger Consideration (see page 50)

SkyWest will appoint an exchange agent to coordinate the payment of the cash merger consideration following the merger. If you own shares of our common stock that are held in “street name” by your broker, you will receive instructions from your broker as to how to surrender your “street name” shares and receive cash for those shares. If you hold certificated shares, the exchange agent will send you written instructions for surrendering your certificates and obtaining the cash merger consideration on or about the date on which the merger is completed. Do not send in your share certificates now.

Questions

If you have additional questions about the merger or other matters discussed in this proxy statement after reading this proxy statement, you should contact ExpressJet’s proxy solicitation agent:

Morrow & Co., LLC

470 West Avenue

Stamford, Connecticut 06902

Call Collect: (203) 658-9400

or

Toll-Free: (800) 662-5200

Email: XJT@Morrowco.com

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This proxy statement contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect ExpressJet’s current beliefs, expectations or intentions regarding future events. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, ExpressJet’s expectations with respect to the approval of the merger by stockholders and by governmental regulatory authorities; the satisfaction of the closing conditions to the merger; and the timing of the completion of the merger.

All forward-looking statements involve significant known and unknown risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of ExpressJet and are difficult to predict. Although ExpressJet believes that the expectations reflected in these forward-looking statements are reasonable, ExpressJet cannot assure you that the actual results or developments it anticipates will be realized, or even if realized, that they will have the expected effects on the consummation of the merger or the business or operations of each of ExpressJet and SkyWest. In addition to other factors and matters contained or incorporated in this document, ExpressJet believes the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

ExpressJet cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in ExpressJet’s most recently filed Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings. All subsequent written and oral forward-looking statements concerning ExpressJet, the merger or other matters and attributable to ExpressJet or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. ExpressJet undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.

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THE PARTIES TO THE MERGER

ExpressJet Holdings, Inc., a Delaware corporation, operates several divisions designed to leverage the management experience, efficiencies and economies of scale present in its subsidiaries, including ExpressJet Airlines, Inc. and ExpressJet Services, LLC. ExpressJet Airlines serves 135 scheduled destinations in North America and the Caribbean, with approximately 1,400 departures per day. ExpressJet’s operations include flying under capacity purchase agreements for United and Continental Airlines, Inc. (“Continental”), as well as providing clients with customized 50-seat charter options and supplying third-party aviation and ground handling services. ExpressJet’s principal executive offices are located at 700 N. Sam Houston Parkway West, Suite 200, Houston, Texas 77067, and its primary telephone number is (832) 353-1000.

SkyWest, Inc., a Utah corporation, through its wholly owned subsidiaries, SkyWest Airlines and Atlantic Southeast, offers scheduled passenger service, with approximately 2,800 daily departures to 226 destinations in the United States, Canada, Mexico and the Caribbean. Substantially all of SkyWest’s flights are operated as Delta Connection, United Express or AirTran under code-share arrangements with Delta or United or a marketing agreement with AirTran, respectively, with significant presence in Delta and United’s key domestic hubs and focus cities. SkyWest Airlines and Atlantic Southeast generally provide regional flying to SkyWest’s partners under long-term, fixed-fee code-share agreements. SkyWest’s principal executive offices are located at 444 South River Road, St. George, Utah 84790, and its primary telephone number is (435) 634-3000.

Merger sub, a Delaware corporation, is an indirect wholly owned subsidiary of SkyWest, whose address is 444 South River Road, St. George, Utah 84790. Its primary telephone number is (435) 634-3000. Merger sub was formed solely for the purpose of facilitating SkyWest’s acquisition of ExpressJet.

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THE SPECIAL MEETING OF THE COMPANY’S STOCKHOLDERS

Time, Place and Purpose of the Special Meeting

The special meeting will be held at 10:00 a.m., Central Time, on November 10, 2010, at the Houston Marriott North at Greenspoint, 255 N. Sam Houston Parkway East, Houston, Texas 77060. The purpose of the special meeting is to consider and vote on the proposal to adopt and approve the merger agreement. The Board, by unanimous vote, has determined that it is advisable and in the best interests of ExpressJet and its stockholders to consummate the merger and the other transactions contemplated by the merger agreement, and unanimously recommends that stockholders vote FOR the proposal to adopt and approve the merger agreement and FOR the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies.

Who Can Vote at the Special Meeting

Only holders of record of ExpressJet common stock as of the close of business on September 27, 2010, which is the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting or the reconvened meeting held following any adjournment or postponement of the special meeting. If you own shares that are registered in the name of someone else, such as a broker, you need to direct that person to vote those shares or obtain an authorization from them and vote the shares yourself at the special meeting. On the record date, there were 20,340,284 shares of common stock outstanding (including 2,695,959 shares of common stock issued to United on September 27, 2010 upon United’s exercise on a cashless basis of all of its outstanding warrants to purchase ExpressJet common stock). Holders of record of ExpressJet common stock on the record date are entitled to one vote per share of common stock on each proposal at the special meeting.

Vote Required; Quorum

The adoption and approval of the merger agreement will require the affirmative vote of the holders of a majority of the outstanding shares of ExpressJet’s common stock. Because the required vote of ExpressJet’s stockholders is based upon the total number of shares of common stock outstanding, and not on the number of shares represented in person or by proxy at the special meeting, the failure to submit a proxy or to vote in person will have the same effect as a vote AGAINST the proposal to adopt and approve the merger agreement. A vote to abstain will have the same effect.

If your shares of common stock are held in “street name” by your broker, you should instruct your broker how to vote your shares using the instructions provided by your broker. Under applicable rules and regulations, brokers who hold shares in “street name” for customers may not exercise their discretion to vote with respect to non-routine matters such as the adoption and approval of the merger agreement. As a result, if you do not instruct your broker to vote your shares of common stock, your shares will not be voted on the adoption and approval of the merger agreement.

Approval of the adjournment or postponement of the special meeting will require the affirmative vote of the holders of a majority of the votes cast at the special meeting. As a result, the failure to vote, a vote to abstain, and broker non-votes will have no effect on the outcome of any vote taken with respect to any proposal to adjourn or postpone the special meeting.

For purposes of transacting business at the special meeting, a majority of the voting power of the outstanding shares of common stock represented in person or by proxy will constitute a quorum. Once a share is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and the reconvened meeting held following any adjournment or postponement of the special meeting, unless the holder is present solely to object to the special meeting. However, if a new record date is set for an adjourned meeting, a new quorum will have to be established. Abstentions and broker non-votes will be considered present for purpose of determining a quorum.

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Ownership of ExpressJet Common Stock by SkyWest

As of the record date, SkyWest, through its wholly owned subsidiary, Atlantic Southeast, owned 465,446 shares of ExpressJet common stock, or 2.3% of the common stock outstanding on that date.

Voting by Proxy

This proxy statement is being sent to you on behalf of the Board for the purpose of requesting that you allow your shares of ExpressJet common stock to be represented at the special meeting by the persons named in the enclosed proxy card. All shares of common stock represented at the special meeting by proxy, voted over the telephone or voted over the Internet will be voted in accordance with the instructions indicated on the proxy card or by telephone or the Internet. If you sign and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Board. The Board recommends a vote FOR the proposal to adopt and approve the merger agreement and FOR the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies.

If you are a stockholder of record, you may vote in person at the special meeting, vote by proxy using the enclosed proxy card, vote by proxy over the telephone, or vote by proxy on the Internet. We prefer that you vote by Internet or telephone, which saves the Company money. If you vote by proxy, your shares will be voted as you specify on the proxy card, over the telephone or on the Internet. Whether or not you plan to attend the special meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the special meeting and vote in person if you have already voted by proxy.

If your shares of common stock are held in “street name” by your broker, you should have received a proxy card and voting instructions with these proxy materials from your broker rather than from the Company. Your broker will vote your shares only if you provide instructions to your broker on how to vote. You should instruct your broker to vote your shares by following the procedures provided by your broker. Without such instructions, your shares will not be voted, which will have the same effect as voting against the merger.

You may revoke your proxy at any time before the vote is taken at the special meeting. To revoke your proxy, you must either advise ExpressJet’s Secretary in writing, deliver a proxy dated after the date of the proxy you wish to revoke or attend the special meeting and vote your shares in person. Attendance at the special meeting will not by itself constitute revocation of a proxy. If you have instructed your broker to vote your shares, you must follow the directions provided by your broker to change those instructions.

Delivery of One Proxy Statement to Stockholders Sharing an Address to Reduce Duplicate Mailings

We are required to send to each stockholder of record a proxy statement, and to arrange for a proxy statement to be provided to each beneficial stockholder whose shares are held by or in the name of a broker, bank, trust or other nominee. Because some stockholders hold shares of our common stock in multiple accounts,

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this process results in duplicate mailings of proxy materials to stockholders who share the same address. Stockholders may avoid receiving duplicate mailings and save us the cost of producing and mailing duplicate documents as follows:

Shares Held of Record. If your shares are registered in your own name and you are interested in consenting to the delivery of a single proxy statement, you may contact the Company’s Secretary by mail at the Company’s headquarters at 700 N. Sam Houston Parkway West, Suite 200, Houston, Texas 77067.

Shares Held in a Bank or Brokerage Account. If your shares are not registered in your own name, your broker, bank, trust or other nominee that holds your shares may have asked you to consent to the delivery of a single proxy statement if there are other stockholders who share an address with you. If you currently receive more than one proxy statement at your household, and would like to receive only one copy of each in the future, you should contact your nominee.

Right to Request Separate Copies. If you consent to the delivery of a single proxy statement but later decide that you would prefer to receive a separate copy of the proxy statement for each stockholder sharing your address, then please notify us or your nominee, as applicable, and we or they will promptly deliver such additional proxy statements. If you wish to receive a separate copy of the proxy statement for each stockholder sharing your address in the future, you may contact the Company’s Secretary by mail at the Company’s headquarters at 700 N. Sam Houston Parkway West, Suite 200, Houston, Texas 77067, or by telephone at (832) 353-1000.

Solicitation of Proxies

ExpressJet is soliciting proxies for the special meeting and, in accordance with the merger agreement, ExpressJet will bear the costs of the solicitation of proxies. In addition to the solicitation of proxies by mail, proxies may also be solicited by Internet, telephone, telegram, fax and in person by regular employees and directors of the company, each of whom is a participant in the solicitation and none of whom will receive additional compensation therefor. Such employees and directors may, however, be reimbursed for out-of-pocket expenses associated with the solicitation. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries to forward proxy soliciting materials to beneficial owners, and we will reimburse them for their reasonable out-of-pocket expenses incurred in doing so.

ExpressJet has engaged Morrow & Co., LLC to assist in the solicitation of proxies for the special meeting and will pay Morrow & Co., LLC a fee of approximately $12,500, plus reimbursement of out-of-pocket expenses. The address of Morrow & Co., LLC is 470 West Avenue, Stamford, Connecticut 06902. You can call Morrow & Co., LLC toll-free at (800) 662-5200 or collect at (203) 658-9400.

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THE MERGER

The discussion of the merger in this proxy statement is qualified by reference to the merger agreement that is attached to this proxy statement as Annex A. You should read the merger agreement carefully.

Background of the Merger

On April 7, 2008, SkyWest delivered an unsolicited, non-binding merger proposal to acquire ExpressJet for $3.50 per share ($35.00 per share after adjusting for ExpressJet’s October 2008 one-for-ten reverse stock split) in cash. The merger proposal was subject to numerous conditions, including SkyWest’s approval of an amendment to ExpressJet’s collective bargaining agreement with the union representing ExpressJet’s pilots, the approval by SkyWest’s board of directors of a new capacity purchase agreement, referred to as a CPA, with Continental, and the completion of due diligence by both SkyWest and Continental.

Also on April 7, 2008, ExpressJet received a letter from Continental confirming that it had substantially negotiated the terms of a new CPA with SkyWest, which would become effective upon a SkyWest acquisition of ExpressJet, and that Continental would consent to the change of control that would occur upon an acquisition of ExpressJet by SkyWest. Continental’s April 7 letter further informed ExpressJet that if ExpressJet did not enter into a new CPA with Continental on terms favorable to Continental, Continental would withdraw 51 aircraft pursuant to the existing CPA between ExpressJet and Continental beginning in December 2009. Continental’s April 7 letter also noted that Continental had the right to terminate the CPA at any time, and stated that Continental anticipated letting the existing CPA expire in 2010. In order to evaluate the transaction proposed by SkyWest and Continental, the Board appointed a special committee of the Board composed of four independent directors without ties to management, Continental, or SkyWest. The special committee engaged a financial advisor, Goldman Sachs, and a legal advisor, Abrams & Bayliss LLP (formerly Abrams & Laster LLP).

During April 2008, the special committee and its financial and legal advisors reviewed and evaluated the conditions required by the SkyWest merger proposal, the steps that might be taken by the special committee to improve the proposal and the potential advantages of a new CPA between ExpressJet and Continental. In addition, a senior Continental officer, the chairman of the special committee and a Goldman Sachs representative met to discuss Continental’s potential interest in a new CPA.

On April 25, 2008, the special committee announced that it had unanimously rejected SkyWest’s merger proposal and that it had commenced a full review of strategic and operating alternatives available to ExpressJet, including entering into discussions with SkyWest regarding a possible business combination, as well as entering into discussions with Continental regarding a new CPA. In making its determination to reject SkyWest’s merger proposal, the special committee considered all relevant factors, including the special committee’s belief that, while a combination of ExpressJet and SkyWest would likely produce meaningful synergies, SkyWest’s proposal did not deliver the appropriate value of those synergies to ExpressJet’s stockholders and that the required amendment to the pilots’ terms of employment significantly reduced the likelihood that a transaction could be concluded.

Following execution of confidentiality agreements by SkyWest and Continental, on May 2, 2008, the special committee, with the assistance of its financial and legal advisors, allowed SkyWest and Continental, as well as their financial and legal advisors, to perform due diligence and to address the other conditions to the SkyWest merger proposal. In addition, executives of the union representing ExpressJet’s pilots began discussions with SkyWest regarding an amendment to the collective bargaining agreement. Over the course of several weeks, the special committee and its advisors attempted repeatedly to secure the satisfaction or removal of the multiple conditions to the SkyWest offer.

On May 22, 2008, the chairman of the special committee and a Goldman Sachs representative met with a senior Continental officer to present a proposal for a new CPA. Following negotiations during the week of May 26, 2008, Continental demanded a prompt decision regarding the terms of a new CPA.

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On May 30, 2008, the master executive council of the ExpressJet pilots’ union informed ExpressJet of the council’s intent not to pursue further discussions regarding SkyWest’s proposed amendment to the collective bargaining agreement. Following the pilots’ union’s communication to ExpressJet, ExpressJet engaged in negotiations with Continental over the terms of a new CPA. During the course of these negotiations, Continental informed the Board that it planned to terminate the existing CPA if a new agreement could not be approved by both companies on or before June 4, 2008.

During the week of June 2, 2008, the special committee twice requested that SkyWest clarify the status and terms of SkyWest’s merger proposal. SkyWest responded by reaffirming that its merger proposal continued to be conditioned on completion of due diligence, the finalization of a CPA between itself and Continental, and acceptance by ExpressJet’s pilots’ union of an amendment to its collective bargaining agreement.

On the evening of June 4, 2008, SkyWest delivered a letter to the special committee memorializing its position regarding the proposed merger. That night, following receipt of SkyWest’s letter, the special committee asked SkyWest to respond with its best and final offer to acquire ExpressJet, including the removal of as many conditions as possible to the SkyWest merger proposal. The special committee also secured a one-day extension of Continental’s deadline for executing a new CPA between Continental and ExpressJet. Shortly after midnight on June 5, 2008, SkyWest offered a “floor price” of $2.75 per share in cash ($27.50 per share in cash after adjusting for ExpressJet’s October 2008 one-for-ten reverse stock split) with the same three conditions.

On June 4 and 5, 2008, the special committee considered the SkyWest proposal as well as the special committee’s serious concern that Continental would immediately terminate the existing CPA unless ExpressJet immediately approved a new CPA and the multiple anticipated benefits to ExpressJet resulting from a new CPA with Continental. On June 5, the Board authorized a new CPA with Continental, and the new CPA with Continental was executed and publicly announced later that day. The new CPA permitted ExpressJet to continue flying aircraft for Continental during a seven-year term, removed Continental’s ability to terminate the new CPA without cause, eased change-in-control limitations, reduced restrictions on ExpressJet’s flying into Continental’s hub airports, and removed the most-favored-nation clause, allowing ExpressJet to actively pursue flying for other carriers and to consider other strategic alternatives. However, the fixed block hour rates were considerably lower than the rates under the prior CPA and were subject to annual adjustment tied to a consumer pricing index. ExpressJet was not able to quantify the overall financial impact of the new CPA because it was substantially different than the previous CPA. However, ExpressJet announced that it needed to aggressively reduce managed expenses under the new CPA and that ExpressJet would have to reduce annual operating costs by approximately $100 million in order to be profitable. On June 6, 2008, SkyWest publicly announced that it had determined not to pursue the acquisition of ExpressJet.

At no time following the special committee’s announcement on April 25, 2008 that it had received and rejected an unsolicited merger proposal by SkyWest, or SkyWest’s announcement on June 6, 2008 that it had determined not to pursue the acquisition of ExpressJet, did any other party approach ExpressJet regarding a potential acquisition transaction. Following the execution of the new CPA with Continental on June 5, 2008, the Board did not authorize Goldman Sachs or management to contact any other potential strategic partners because the Board was no longer considering the sale of ExpressJet.

As required by the indenture for ExpressJet’s then-outstanding 4.25% convertible notes due 2023, in July 2008, ExpressJet commenced a repurchase offer for the $128.2 million in aggregate principal amount of notes outstanding and provided written notice to the trustee of the intention to pay the repurchase price wholly in shares of ExpressJet common stock. As a result, and pursuant to the terms of the repurchase offer, ExpressJet issued 16,382,498 (reverse split-adjusted) shares of common stock in payment of the repurchase price for the notes that were validly tendered. Effective following the date of the repurchase, the notes were amended and the principal amount that was not tendered and repurchased in the offer became ExpressJet’s 11.25% convertible secured notes due 2023.

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During July and August 2008, ExpressJet received notice from, and had discussions with, the New York Stock Exchange (the “NYSE”) regarding the NYSE’s share price criteria for continued listing. By August 29, 2008, ExpressJet’s stock price had declined to $0.20 per share (on a pre-reverse stock split basis). In order to remain in compliance with the continued listing standards of the NYSE, the Board authorized a one-for-ten reverse stock split and recommended that stockholders approve the amendment to ExpressJet’s certificate of incorporation necessary to effect the reverse stock split. On October 1, 2008, at a special meeting of ExpressJet’s stockholders, the amendment was approved. Effective October 2, 2008, each ten shares of ExpressJet common stock were combined into and automatically became one share of common stock, which began trading on a split-adjusted basis when the market opened that day. The reverse split affected all shares of common stock and stock options outstanding immediately prior to the effective time.

In September 2008, as a result of high fuel costs and other challenges facing the airline industry at such time, ExpressJet ceased airline operations under the ExpressJet brand and returned 39 aircraft used for such operations to Continental in accordance with Continental’s rights under the new CPA.

In November 2009, United and ExpressJet announced that ExpressJet had been awarded a multi-year CPA whereby ExpressJet would fly aircraft as United Express beginning May 1, 2010. United and ExpressJet later executed the CPA in February 2010 with an effective date of December 1, 2009. The United CPA included a grant to United of warrants to purchase 2.7 million shares of ExpressJet common stock, with an exercise price of $0.01 per share.

On December 1, 2009, ExpressJet announced that its President and Chief Executive Officer, Jim Ream, would be retiring effective January 1, 2010, and that Patrick Kelly, a member of the Board, had been appointed to serve as interim President and Chief Executive Officer until a new Chief Executive Officer was appointed.

On or about December 2, 2009, Jerry C. Atkin, SkyWest’s Chairman of the Board and Chief Executive Officer, contacted Mr. Kelly regarding the possibility of resuming discussions regarding SkyWest’s possible acquisition of ExpressJet, but did not have any specific proposal. Mr. Kelly discussed the call with George R. Bravante, Jr., the Chairman of the Board, and Mr. Ream. Messrs. Kelly, Bravante, and Ream concluded that Mr. Atkin was not attempting to initiate serious discussions, given the absence of a concrete offer and ExpressJet’s prior experience with SkyWest’s offer in 2008. Mr. Kelly’s impression was that Mr. Atkin was seeking to determine if ExpressJet was highly motivated to sell in light of Mr. Ream’s imminent departure. On or about December 3, 2009, Mr. Kelly contacted Mr. Atkin and indicated that ExpressJet was not interested in pursuing a transaction with SkyWest at that time. However, Mr. Kelly emphasized on the call that ExpressJet was always focused foremost on shareholder value, leaving the door open to Mr. Atkin to come back with a concrete offer. Mr. Atkin did not produce such an offer at that time. In the absence of such an offer, the Board appropriately focused on the search for a new Chief Executive Officer.

On February 3, 2010, Mr. Kelly met with Jeff Smisek, the Chief Executive Officer of Continental. During that meeting, Mr. Smisek informed Mr. Kelly that Continental would not object if ExpressJet were to enter into discussions regarding, or consummate, a strategic transaction. While SkyWest was mentioned as a potential strategic partner, no specific opportunity was identified or discussed at that time.

On February 11, 2010, at the request of the Board and in connection with the Board’s search for a new Chief Executive Officer, representatives of Goldman Sachs made a presentation to the Board regarding the strategic alternatives available to ExpressJet, which consisted of pursuing a stand-alone strategy, re-engaging in negotiations with SkyWest, and contacting other potential strategic partners. The Goldman Sachs representatives noted that other than potentially SkyWest, a strategic buyer was unlikely to emerge because the most likely candidates did not have access to the financing that would be required to acquire ExpressJet, were not a strong strategic fit with ExpressJet, had fleets that were not highly compatible with ExpressJet’s fleet and/or were focused on responding to the same industry-wide challenges that ExpressJet was facing.

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On February 18, 2010, Mr. Smisek called each of Mr. Kelly and Mr. Bravante to inform them that SkyWest had expressed no interest in acquiring ExpressJet with its current CPA with Continental, which SkyWest viewed as a declining franchise, but that SkyWest was interested in trying to negotiate a new CPA with Continental that would become effective if SkyWest were to purchase ExpressJet. Mr. Smisek indicated that he viewed a partnership with SkyWest as potentially advantageous to Continental and that he would engage in negotiations with SkyWest. Because the Board was not at that time pursuing a sale of ExpressJet, the Board did not authorize Goldman Sachs or management to contact SkyWest or any other potential strategic partners. Instead, ExpressJet continued its search for a Chief Executive Officer.

During the first week of April 2010, Mr. Smisek informed Mr. Kelly that Continental had entered into preliminary discussions with SkyWest regarding a CPA between Continental and SkyWest which would become effective if SkyWest were to acquire ExpressJet. Mr. Smisek indicated that Continental was not opposed to an acquisition of ExpressJet and expressed his belief that a suitable commercial arrangement for ExpressJet was possible with SkyWest. Given the uncertainty regarding any potential strategic transaction and any potential future proposal by SkyWest, and ExpressJet’s previous acquisition negotiations with SkyWest, the Board continued to focus on its search for a Chief Executive Officer. SkyWest did not contact ExpressJet again at this time, and Continental provided no additional information to ExpressJet regarding any potential strategic transaction.

On April 19, 2010, ExpressJet announced that the Board had named Thomas M. Hanley as President and Chief Executive Officer, effective immediately.

On May 6, 2010, Mr. Atkin spoke by telephone with each of Mr. Hanley and Mr. Bravante regarding a potential strategic transaction between SkyWest and ExpressJet. Subsequent to these calls, Mr. Atkin delivered a letter to Messrs. Hanley and Bravante which proposed the acquisition by SkyWest of all of the shares of ExpressJet common stock for $6.00 per share in cash. The SkyWest proposal was not subject to a financing condition, but was subject to the completion of due diligence by both SkyWest and Continental, the approval of the transaction by the SkyWest board of directors, and SkyWest’s entry into a CPA with Continental. SkyWest informed ExpressJet that it had substantially negotiated the terms of a new CPA with Continental that would become effective upon the consummation of the proposed transaction with ExpressJet. While SkyWest requested that the parties discuss the proposed transaction on a confidential basis, it also reserved the right to make a unilateral public disclosure of the proposal after May 17, 2010 if ExpressJet did not commence discussions with SkyWest by such date. Mr. Atkin’s letter was immediately forwarded by Messrs. Hanley and Bravante to the Board, and, over the next several days, Mr. Hanley met and conferred with ExpressJet’s senior management, its regular outside legal counsel, Andrews Kurth LLP (“Andrews Kurth”), and its financial advisor, Goldman Sachs. Mr. Hanley also spoke with Mr. Atkin and informed him that the Board would consider the SkyWest letter at its meeting on May 13, 2010.

As part of Mr. Hanley’s preparation for the Board meeting on May 13, 2010, he contacted Seabury Advisors LLC, a consulting firm with expertise in the airline industry, to assist ExpressJet’s management in the identification and evaluation of possible additional improvements in ExpressJet’s costs, productivity and operations. Seabury Advisors LLC and its FINRA broker-dealer affiliate, Seabury Securities LLC (together, “Seabury”), were engaged to serve as a financial advisor to ExpressJet. Goldman Sachs and Seabury then held discussions with ExpressJet’s senior management and each other over the course of several days.

On May 13, 2010, following ExpressJet’s annual meeting of stockholders, the regular annual meeting of the Board was held. Also present at the invitation of the Board were representatives of Goldman Sachs, Seabury and Andrews Kurth. Mr. Hanley briefed the Board on his discussions with Mr. Atkin, and the Board discussed the principal terms of the SkyWest proposal. The Board also discussed with Mr. Hanley and ExpressJet’s senior management how a possible process with SkyWest might unfold. Andrews Kurth discussed certain legal matters with the directors and provided a summary of the directors’ fiduciary duties to stockholders in connection with a potential business combination. The Board also considered the discussions that had occurred and would be

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continuing between SkyWest and Continental concerning a new CPA between them, and the implications that might have for any potential transaction. In particular, the Board noted that the new CPA that ExpressJet and Continental had entered into in 2008 had eliminated the requirement in the previous CPA that Continental’s consent be given to a transaction between ExpressJet and SkyWest. The Board also discussed that each current Board member was both independent and not affiliated with SkyWest or Continental, and concluded that there was no need to establish a special committee with respect to negotiations with SkyWest.

At the May 13 meeting, representatives of Goldman Sachs and Seabury separately reviewed their respective preliminary financial analyses of the SkyWest proposal. Seabury’s presentation included a detailed review of possible cost-savings and operational initiatives that might be undertaken by management. Representatives of Goldman Sachs also reviewed potential alternatives to a transaction with SkyWest, including pursuing a stand-alone strategy, negotiating with Continental to revise the CPA, and exploring discussions with alternative potential buyers. Following extensive discussion with the financial advisors, the Board preliminarily concluded that due to their recent experience in the industry, financial buyers such as private equity firms were not likely to be plausible candidates to acquire ExpressJet, and that strategic buyers such as airlines other than SkyWest were not likely to see the strategic benefit of, or have the financial capability to complete, a business combination with ExpressJet.

At the conclusion of the meeting, the Board instructed Mr. Hanley to communicate to Mr. Atkin that the Board was carefully considering SkyWest’s proposal and would respond in due course. The Board authorized senior management, with the assistance of ExpressJet’s financial advisors and legal counsel, to enter into a confidentiality agreement with SkyWest and arrange for an initial meeting with SkyWest’s senior management. The Board also directed senior management to continue working with Seabury to further develop potential cost-savings and operational initiatives.

On May 14, 2010, Mr. Hanley conveyed the Board’s response to Mr. Atkin and made arrangements to meet in person the following week in New York, New York. Mr. Hanley also had a brief conversation with Bradford R. Rich, the Executive Vice President and Chief Financial Officer of SkyWest. in conjunction with his delivery of a draft of a confidentiality agreement. Over the next several days, representatives of ExpressJet, SkyWest, Andrews Kurth and SkyWest’s outside legal counsel, Parr Brown Gee & Loveless, P.C. (“Parr Brown”) negotiated the terms of a confidentiality agreement, which was executed by the parties on May 21, 2010.

On May 17, 2010, the Board met and received a report from Mr. Hanley regarding his discussions with SkyWest, the progress on the confidentiality agreement, and the upcoming meeting with SkyWest in New York.

On May 21, 2010, Mr. Hanley and two senior officers of ExpressJet met in New York with Mr. Atkin and Mr. Rich of SkyWest. Also present were representatives of Goldman Sachs and Seabury, as well as representatives of Raymond James and Associates, Inc. (“Raymond James”), financial advisor to SkyWest. ExpressJet, with the assistance of its advisors, made a presentation to SkyWest regarding, among other things, ExpressJet’s business, its financial outlook, the projected cost-savings and operational initiatives developed by ExpressJet’s management and Seabury, ExpressJet’s five-year plan, and certain valuations of ExpressJet’s equity value. Mr. Hanley stated that SkyWest’s initial proposal would have to be improved before the Board would agree to move forward. Mr. Atkin and Mr. Rich agreed to review the ExpressJet presentation and Mr. Hanley’s comments, but they indicated that SkyWest had already taken certain projected cost-savings and operational initiatives into account in its initial proposal and that substantial additional due diligence on ExpressJet would need to be conducted by SkyWest.

Following the meeting with SkyWest, Mr. Hanley relayed his impressions of the meeting to several members of the Board and senior management. Senior management also held follow-up discussions with representatives of Goldman Sachs and Seabury.

On May 24, 2010, Mr. Hanley and Mr. Rich had a conversation during which it was proposed that SkyWest engage in an initial phase of due diligence focusing on a high-level financial review in order to better understand

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ExpressJet’s May 21 presentation. Mr. Rich indicated that SkyWest might be prepared to improve its offer to no more than $6.50 per share. He also suggested that the Board consider a mixed consideration of SkyWest common stock and cash. Mr. Rich also proposed a second, more detailed due diligence phase by both SkyWest and Continental that would be coupled with SkyWest’s negotiations with Continental regarding a new CPA, which Mr. Rich stated had not yet been finalized, and indicated that SkyWest’s proposal to acquire ExpressJet was conditioned on SkyWest’s entering into a new CPA with Continental.

Also on May 24, the Board retained Kevin Abrams of Abrams & Bayliss as a legal advisor to the Board. The Board met without Mr. Hanley or other members of management being present from time to time during the course of the negotiations with SkyWest and also had separate access to ExpressJet’s financial and legal advisors. From time to time until the signing of the merger agreement, the non-employee directors also met separately with Abrams & Bayliss to discuss their fiduciary duties and other issues.

On May 26, 2010, SkyWest delivered a detailed due diligence request list to ExpressJet.

Also on May 26, the Board met and received a report from Mr. Hanley regarding the May 21, 2010 meeting with SkyWest and SkyWest’s indication that it might be prepared to increase its offer to as much as $6.50 per share, but that a transaction would be conditioned on SkyWest’s entry into a new CPA with Continental. After extensive discussion among the directors and ExpressJet’s financial and legal advisors, the Board directed Mr. Hanley and Goldman Sachs to respond in writing to SkyWest’s initial proposal by seeking $7.50 per share in cash and informing SkyWest that they must eliminate the conditionality of SkyWest’s entry into a new CPA with Continental, conduct limited due diligence and expedite the progress toward a definitive agreement. The Board also directed senior management to prepare to announce and implement the cost-savings and operational initiatives developed by ExpressJet and Seabury.

On May 27, 2010, Mr. Hanley and Mr. Rich communicated to confirm ExpressJet’s receipt of the due diligence request list and ExpressJet’s intention to confer with its advisors and respond early the following week. Also on that day, ExpressJet senior management, with the assistance of its legal and financial advisors, drafted a written response to SkyWest, which draft response was forwarded to the directors for their review.

On May 28, 2010, the Board met and reviewed the draft response to SkyWest. After discussion and advice from its financial advisors, the Board directed that the response to SkyWest should include the following terms:

On June 1, 2010, at the direction of the Board, representatives of Goldman Sachs forwarded the ExpressJet response to Raymond James.

In the evening of June 1, Mr. Rich called Mr. Hanley and stated that SkyWest found several aspects of ExpressJet’s response to be unacceptable, including the price and timeline proposed by ExpressJet and the removal of the conditions to SkyWest’s offer. Mr. Rich also expressed SkyWest’s belief that ExpressJet stockholders would be willing to accept the original $6.00 per share offer, and he informed Mr. Hanley that SkyWest would be delivering a notice pursuant to the confidentiality agreement that would allow SkyWest to make a public announcement of its $6.00 per share offer after the expiration of three business days. Mr. Rich also stated that SkyWest would respond to ExpressJet with a counter-proposal in the next several days and hoped to be able to continue discussions. ExpressJet received the written notice regarding a potential public announcement by SkyWest shortly after Messrs. Hanley and Rich spoke. Later that evening, representatives of Raymond James

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and Goldman Sachs discussed ExpressJet’s response and Raymond James informed Goldman Sachs that SkyWest was prepared to make a public announcement of its original $6.00 per share offer to ExpressJet if the parties were unable to reach agreement regarding the principal terms of an acquisition transaction.

On June 2, 2010, the Board met and discussed Mr. Hanley’s communications with SkyWest, Goldman Sachs’ communications with Raymond James, and the notice from SkyWest that it was prepared to publicly disclose its acquisition proposal. Representatives of Goldman Sachs informed the Board that Raymond James had indicated that SkyWest was willing to raise its offer to $6.50, and expressed its willingness to pay a portion of the merger consideration in SkyWest common stock. Consistent with the Board’s prior directions, representatives of Goldman Sachs had rejected the proposal that SkyWest common stock be included as part of the merger consideration, and the Board confirmed that rejection. Representatives of Goldman Sachs also reported Raymond James’ position that the expedited process proposed in the ExpressJet response allowed insufficient time for due diligence and negotiations, that SkyWest desired to seek information from United as part of due diligence, and that Continental would not initially be involved in due diligence. The Board directed senior management to prepare a press release to respond to the potential public announcement by SkyWest. The Board also asked Mr. Hanley and Goldman Sachs to keep lines of communication open with SkyWest and its advisors. Mr. Hanley then reported to the Board on the development of management’s cost-savings and operational initiatives, now referred to as Operation: Green Light, and the Board directed him to work with the financial advisors to prepare a public announcement of those initiatives within the following week. The Board believed that Operation: Green Light was integral to ExpressJet’s success irrespective of whether ExpressJet were to be acquired by SkyWest, and that ExpressJet could not delay the implementation of those initiatives while negotiating with SkyWest due to the risk that an agreement with SkyWest might not ultimately be reached.

On June 3, 2010, Mr. Hanley and Mr. Rich discussed by telephone the ExpressJet response to SkyWest’s acquisition proposal. During the call, Mr. Rich stated that (i) SkyWest was unwilling to pay $7.50 per share to acquire ExpressJet’s stock, but that SkyWest would consider revising its offer, (ii) SkyWest preferred to negotiate the terms of an acquisition without public disclosure, and (iii) SkyWest’s separate negotiation of the principal terms of a new CPA with Continental was nearly complete.

On June 4, 2010, the Board met to discuss the status of the negotiations with SkyWest, and Mr. Hanley updated the Board with respect to his conversation with Mr. Rich on June 3, 2010. Mr. Hanley explained to the Board that he did not believe that SkyWest would increase its offer significantly above $6.50 per share.

On June 7, 2010, ExpressJet issued a press release announcing Operation: Green Light and its expectation that it could achieve up to $40 million in run-rate savings by 2012. It also announced that it had posted details about the plan on its website and would make a presentation at an upcoming investor conference for the transportation industry.

On June 9, 2010, Mr. Rich called Mr. Hanley and informed him that SkyWest would be delivering a revised proposal letter containing a proposal to acquire all of the shares of ExpressJet common stock for $6.50 per share in cash. The letter was delivered on June 10, 2010 and contained the following material terms:

Consistent with the earlier communications from Mr. Rich to Mr. Hanley, the letter rejected ExpressJet’s proposals regarding the expedited timeframe for the completion of due diligence and the negotiation of a definitive merger agreement.

On June 12, 2010, the Board met to consider and discuss the revised SkyWest proposal and management’s financial projections, which contemplated the achievement of certain financial metrics related to Operation:

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Green Light and the continuation of ExpressJet’s existing operating relationships with Continental and United, including improved aircraft utilization rates by Continental and United. Representatives of Goldman Sachs reviewed their preliminary financial analyses of the SkyWest proposal. In performing such financial analyses, Goldman Sachs utilized and relied upon management’s projections. After extensive discussion among the directors, management and representatives of Goldman Sachs, the Board convened an executive session by excusing from the meeting all senior management, other than Mr. Hanley, and all financial and legal advisors, other than Abrams & Bayliss. The directors discussed the reliability of management’s projections and agreed that they contained numerous unsubstantiated assumptions, including, among other things, that the Operation: Green Light initiatives would be achieved in full and that ExpressJet would maintain existing operating relationships with Continental and United. Following the executive session, the directors instructed Goldman Sachs to (i) propose to Raymond James that SkyWest increase its offer to $7.00 per share, that due diligence and execution of a definitive agreement be completed in two weeks, and that SkyWest be permitted to terminate the merger agreement only in the event of regulatory disapproval, and (ii) request that SkyWest answer the foregoing proposal by Tuesday, June 15, 2010, at 5:00 p.m.

Following conclusion of the June 12 Board meeting, representatives of Goldman Sachs contacted Raymond James and conveyed the ExpressJet counterproposal, including the price of $7.00 per share. Over the course of the next two days, additional communications occurred between representatives of Raymond James and Goldman Sachs and between Messrs. Hanley and Rich. Mr. Hanley also communicated with and received direction from Mr. Bravante. SkyWest’s principal message was that while it appreciated that ExpressJet remained willing to negotiate further, it would not be willing to increase its offer to $7.00 per share. Specifically, Mr. Rich stated that while he did not believe that the SkyWest board of directors would go as high as $7.00, he did believe that it would consider an increase to $6.75 per share. Mr. Hanley encouraged him to revisit the matter with the SkyWest board. Both Raymond James and Mr. Rich continued to assert in conversations with representatives of Goldman Sachs and Mr. Hanley that SkyWest was considering a public announcement of its offer to ExpressJet’s stockholders.

On June 15, 2010, Mr. Smisek called Mr. Hanley to inform him of Continental’s support for a possible ExpressJet transaction with SkyWest. Mr. Smisek discussed Continental’s concern that ExpressJet was not economically stable and that any continued business relationship with ExpressJet was an economic operating risk, and Continental’s belief that a combined ExpressJet-SkyWest entity would be able to adequately support Continental’s network. Mr. Smisek also indicated that Continental intended to exercise its rights under the CPA to reduce the number of aircraft and aircraft utilization (the number of block hours flown per aircraft) and did not intend to renew the ExpressJet-Continental CPA when its term expired. Mr. Smisek also expressed his belief that future opportunities for ExpressJet with respect to United would be limited after the completion of the merger between Continental and United.

On June 16, 2010, the Board met to consider recent developments. Mr. Hanley delivered a summary of his June 15 discussion with Mr. Smisek. The directors discussed the viability of ExpressJet as a standalone entity absent operating agreements between ExpressJet and Continental and/or United. The directors recognized that financial forecasts based on the continuation of operating relationships between ExpressJet and Continental or United or that were dependent upon historical or increased aircraft utilization could not be reasonably relied upon. After extensive discussion, the Board instructed Goldman Sachs to convey to Raymond James that the Board would be willing to accept a firm offer of $6.75 in cash per share, subject to a 15-day period to complete due diligence and execute a definitive agreement. Following the meeting, representatives of Goldman Sachs spoke with representatives of Raymond James, and Mr. Hanley followed up with a call to Mr. Rich.

On June 17, 2010, SkyWest delivered a letter to ExpressJet that confirmed in writing that SkyWest would be willing to agree to acquire all of the ExpressJet common stock for $6.75 per share, subject to the completion of SkyWest’s due diligence, negotiation of the definitive agreement, and approval by both of the boards of directors of SkyWest and ExpressJet.

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SkyWest commenced expanded due diligence efforts on June 18, 2010, including through numerous calls with ExpressJet’s senior management and representatives of Goldman Sachs and Raymond James. The due diligence review conducted by SkyWest was thorough and involved extensive production of documents by ExpressJet. The conduct of this due diligence review was complicated and slowed, at times, by confidentiality arrangements between ExpressJet and certain of its key vendors and customers.

On June 22, 2010, Andrews Kurth delivered a draft of the merger agreement to ExpressJet’s directors and advisors for their review, and on June 24, 2010, the Board met with its advisors to review the draft and make comments. On June 24, Andrews Kurth delivered the initial draft of the merger agreement to Parr Brown. Representatives of Andrews Kurth and Parr Brown also conducted the first of dozens of calls that would take place, sometimes with the participation of senior management of ExpressJet and SkyWest, over the next several weeks.

On June 29, 2010, Parr Brown delivered a revised draft of the merger agreement to ExpressJet and Andrews Kurth. The SkyWest draft merger agreement included a number of material revisions to the terms of the ExpressJet draft merger agreement. Among other things, the SkyWest draft proposed (i) a SkyWest termination right if United failed to consent to the transaction and waive any claims it might have under the CPA between ExpressJet and United, (ii) a SkyWest termination right in the event that any applicable regulatory agency conditioned consummation of the merger on the divestiture by SkyWest of material assets, (iii) additional conditions to closing, including a modified definition of “material adverse effect,” (iv) numerous and extensive restrictive covenants regarding the operation of ExpressJet’s business between signing and the consummation of the transaction, (iv) numerous and extensive additional representations and warranties, and (v) an increase from $1.5 million to $5.5 million in the termination fee payable by ExpressJet under certain circumstances, including if it terminated the agreement in order to accept a superior proposal, and a requirement that SkyWest be given the opportunity to match any superior proposal received by ExpressJet. In addition, while the original ExpressJet draft provided for full acceleration of all restricted stock in order to provide an incentive to senior management to remain engaged with ExpressJet during the period after execution of the merger agreement and before closing of the merger, the SkyWest draft eliminated any accelerated vesting of restricted stock beyond that provided for in the terms of the related plans and agreements.

On June 30, 2010, Mr. Hanley discussed the SkyWest draft merger agreement with Mr. Rich. During the course of that conversation, Mr. Rich expressed SkyWest’s willingness to accept terms providing that the merger closing would not be conditioned on factors related to United, that SkyWest would not be entitled to provide input with respect to ExpressJet’s business decisions regarding aircraft leases and information technology issues during the period between execution of a definitive merger agreement and closing, and that the definitive merger agreement would not impose restrictions on ExpressJet’s potential entry into ordinary course aircraft lease agreements or operating agreements during the period between execution of a definitive merger agreement and closing.

On July 1, 2010, the Board met and discussed the SkyWest draft merger agreement, the concessions proposed by SkyWest during Mr. Hanley’s call with Mr. Rich, and the remaining outstanding issues with respect to the SkyWest draft merger agreement. The Board directed ExpressJet’s management and legal advisors to respond to SkyWest by rejecting all material changes in the SkyWest draft merger agreement, except that the Board authorized senior management and the legal advisors to agree that SkyWest could terminate the merger agreement due to regulatory demands if SkyWest agreed that, in the event of such termination, SkyWest would pay ExpressJet a termination fee between $10 million and $15 million. In particular, the Board rejected SkyWest’s proposed increase in the termination fee payable by ExpressJet because it felt that $5.5 million was too high in the context of the proposed transaction. Following the meeting, Andrews Kurth delivered a revised draft of the merger agreement to Parr Brown. Between July 1 and the execution of the merger agreement on August 3, 2010, the two law firms, with input from senior management of their respective clients and the other advisors, exchanged numerous versions of the draft agreement. On numerous occasions between July 1 and the execution of the merger agreement, Mr. Hanley and Mr. Rich also discussed the progress of the negotiations.

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On July 8, 2010, the Board met to review financial projections prepared by ExpressJet’s management and discuss the transaction process and current draft of the merger agreement. Mr. Hanley presented management’s financial projections to the Board, and explained that the financial projections differed from those presented to the Board on June 12, 2010 in the following material respects: (i) inflation assumptions regarding revenue growth were adjusted to reflect actual inflation projections, (ii) contract flying with Continental was reduced to minimum amounts required under the terms of the operating agreement between ExpressJet and Continental, (iii) contract flying for United was reduced by five aircraft after the expiration of the operating agreement covering those aircraft, (iv) forecasted depreciation was reduced to reflect lower levels of capital expenditures, and (v) annual maintenance costs were increased. Mr. Hanley noted that both the current and previous financial forecasts assumed full implementation of the cost-saving initiatives contemplated by Operation: Green Light, and that any such future benefits were subject to significant risks. Mr. Hanley also noted that Continental and United could use significantly fewer of ExpressJet’s aircraft than projected during the forecast period.

Following Mr. Hanley’s presentation, the Board met in executive session to discuss SkyWest’s proposal in its most recent draft merger agreement to eliminate any accelerated vesting of restricted stock beyond that provided for in the terms of the related plans and agreements, and the effect of this proposal on equity awards to ExpressJet’s employees and officers, and the particular effect of this proposal on Mr. Hanley in light of his ownership of a significant number of shares of non-vested restricted stock.

On July 14, the Board met to review a draft of the merger agreement and to address the effect of the merger, including certain provisions of the SkyWest draft merger agreement, on ExpressJet employee compensation, including provisions of the SkyWest draft merger agreement affecting the vesting of equity awards and the treatment of underwater options, and ExpressJet’s employee stock purchase program.

On July 15, 2010, the Board met to, among other things, review and discuss the status of the negotiations regarding the draft merger agreement. Andrews Kurth described for the Board the material changes to the merger agreement proposed by SkyWest, including a modified definition of the term “material adverse effect” proposed by SkyWest, a SkyWest termination right in the event regulators were to require any material disposition of SkyWest’s assets or businesses, a SkyWest termination right in the event ExpressJet were to be in default under its operating agreement with United, and the elimination by SkyWest of any reverse breakup fee in the event of conditional regulatory approval. The Board directed Mr. Hanley to respond to SkyWest by rejecting the SkyWest proposed changes, and insisting, among other things, (i) that any conditionality related to ExpressJet’s relationship with United was unacceptable, (ii) that if ExpressJet accepted regulatory risks through SkyWest’s termination right, SkyWest must be subject to a reverse breakup fee, and (iii) that the definition of “material adverse effect” must be consistent with ExpressJet’s position.

On July 16, 2010 and again on July 18, 2010, Mr. Hanley and other members of ExpressJet’s senior management, along with Andrews Kurth, participated in calls with SkyWest and its legal and financial advisors to discuss and resolve open issues relating to the merger agreement. The open issues at this time included, among others, the definition of “material adverse effect,” the content of certain of ExpressJet’s representations and warranties, the extent of the limitations on ExpressJet’s ability to take certain actions between signing and closing, and the payment of a termination fee by SkyWest if it terminated the merger agreement because regulatory approval of the merger was conditioned on the disposition of SkyWest assets or businesses. At no time during the negotiations was the Board’s ability to terminate the merger agreement if it received a superior proposal or if necessary to comply with its fiduciary duties under applicable law (provided in all cases that ExpressJet and the Board complied with the terms of the merger agreement relating to such a termination) in substantive dispute. During the negotiations that occurred from July 16 to July 18, ExpressJet agreed that SkyWest would have the opportunity to match a superior proposal before ExpressJet could terminate the merger agreement to accept such a proposal and agreed to increase the termination fee payable by ExpressJet to $4 million, but those concessions were conditioned upon SkyWest’s agreement to pay a reverse termination fee if it terminated the merger agreement because of the conditions to regulatory approval imposed by regulatory authorities.

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Between July 17 and July 19, 2010, Mr. Hanley engaged in a series of discussions with Mr. Rich regarding several of the remaining open terms of the draft merger agreement. Separately, during this time period, Mr. Bravante spoke with Mr. Atkin regarding several of the same terms. As a result of these conversations, ExpressJet and SkyWest agreed in principle, subject to review and approval by the boards of directors of both companies, on the material open issues with respect to the merger agreement, including that the termination fee payable by ExpressJet under certain circumstances would be set at $4 million, and that a reverse termination fee of $4 million would be payable by SkyWest if it terminated the merger agreement because regulatory approval was conditioned on the disposition of SkyWest assets or businesses. Following the resolution in principle of the material outstanding issues with respect to the merger agreement, Mr. Bravante discussed with Mr. Atkin SkyWest’s proposal to not accelerate the vesting of all ExpressJet equity awards and its potential effect on Mr. Hanley’s equity compensation. Messrs. Bravante and Atkin agreed that a minimum of 40% of the shares of restricted stock held by Mr. Hanley would vest in connection with the merger. A 40% floor was consistent with the goal of insuring that Mr. Hanley did not have any material interests that were materially different from ExpressJet’s public stockholders with respect to the timing of the closing of the merger.

On July 20, 2010, the Board met to review these latest developments regarding the merger negotiations and approved the agreements in principle made by Mr. Hanley and Mr. Rich and Mr. Bravante and Mr. Atkin, including the $4 million reverse termination fee.

Also on July 20, ExpressJet delivered the first draft of the disclosure schedules to the draft merger agreement to SkyWest. Between July 20 and the execution of the merger agreement on August 3, 2010, the parties revised and finalized all schedules to the merger agreement.

On July 24, 2010, the Board held a meeting at which ExpressJet’s senior management and advisors reported that the parties had made progress with respect to the draft merger agreement and schedules thereto but that SkyWest’s agreement in principle regarding the open material terms of the merger agreement remained subject to final negotiation and documentation of those terms in the merger agreement, completion and SkyWest’s approval of ExpressJet’s disclosure schedules and SkyWest’s review and approval of outstanding due diligence requests.

Between July 24, 2010 and the execution of the merger agreement, ExpressJet, SkyWest and their respective legal and financial advisors continued to work to address the remaining open issues in the due diligence process and to negotiate the terms of the merger agreement.

On August 3, 2010, SkyWest’s board of directors held a meeting, where the directors received information from SkyWest management, Raymond James and Parr Brown with respect to the proposed acquisition of ExpressJet. The SkyWest board of directors reviewed and discussed in detail the information presented, as well as the proposed final merger agreement. Following its review and discussion, the SkyWest board of directors unanimously approved the transaction and authorized management to enter into the merger agreement.

Later on August 3, 2010 the Board met to review and discuss the proposed merger with SkyWest. Mr. Hanley told the Board that Mr. Rich had called to inform him that the SkyWest board had unanimously approved the merger agreement and authorized its execution. Members of senior management and Andrews Kurth updated the Board regarding changes to the terms of the draft merger agreement that had been discussed at the prior meeting and noted that all major issues had been satisfactorily resolved. Goldman Sachs reviewed with the Board its financial analyses of the proposed transaction as further described below under “—Opinion of ExpressJet’s Financial Advisor.” At the request of the Board, Goldman Sachs delivered its oral opinion (which was subsequently confirmed in writing as of August 3, 2010) that, as of that date and based on and subject to the limitations and assumptions described in its written opinion, the $6.75 per share in cash to be paid to the holders of shares of ExpressJet’s common stock (other than SkyWest and its affiliates) pursuant to the merger agreement was fair, from a financial point of view, to such holders. The full text of Goldman Sachs’ written opinion, dated August 3, 2010, which sets forth, among other things, the procedures followed, assumptions made, matters

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considered and limitations and qualifications on the review undertaken in connection with the opinion, is attached to this proxy statement as Annex B.

The Board then unanimously approved the merger agreement and the merger, recommended that ExpressJet’s stockholders vote in favor of the merger and the merger agreement, and approved an amendment to ExpressJet’s rights plan so that it would not be triggered by the execution or completion of the merger agreement and related transactions, as described in the section entitled “—Amendment to ExpressJet’s Rights Agreement.” Following the Board meeting, the parties finalized the merger agreement and related schedules and then executed the agreement.

Prior to the opening of the stock markets on the morning of August 4, 2010, ExpressJet and SkyWest each issued a press release announcing the transaction. Later that morning, SkyWest held its regularly-scheduled second quarter earnings call in which it discussed the transaction in more detail.

The Recommendation of the Company’s Board of Directors and the Company’s Reasons for the Merger

ExpressJet’s Board, by unanimous vote, has determined that it is advisable and in the best interests of ExpressJet and its stockholders to consummate the merger and the other transactions contemplated by the merger agreement, and unanimously recommends that stockholders vote FOR the proposal to adopt and approve the merger agreement. When you consider the Board’s recommendation, you should be aware that ExpressJet’s directors may have interests in the merger that may be different from, or in addition to, your interests. These interests are described in “—Interests of the Company’s Directors and Executive Officers in the Merger.”

In determining that the merger and the other transactions contemplated by the merger agreement are advisable and in the best interests of ExpressJet and its stockholders, the Board consulted with management and its financial and legal advisors and considered a number of factors, including the following:

The Board believed that $6.75 per share of common stock was the highest price that SkyWest would be willing to pay, and that it was highly unlikely that another potential acquiror would offer a higher price to acquire ExpressJet. The Board also considered the fact that the merger consideration is all cash, which provides certainty of value to ExpressJet’s common stockholders compared to a transaction in which those stockholders would receive stock.

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The Board also identified and considered a number of countervailing factors and risks to ExpressJet and its stockholders relating to the merger and the merger agreement, including the following:

The foregoing discussion of the information and factors considered by the Board is not intended to be exhaustive, but includes the material factors considered by the Board. In view of the complexity and wide variety of factors considered, the Board did not find it useful to and did not attempt to quantify, rank or otherwise assign weights to these factors. In addition, the Board did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to its ultimate determination, but rather the Board conducted an overall analysis of the factors described above, including discussions with ExpressJet’s management and its financial and legal advisors. In considering the factors described above, individual members of the Board may have given different weights to different factors.

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Interests of the Company’s Directors and Executive Officers in the Merger

Each of our current executive officers and non-employee directors holds ExpressJet equity awards. All equity awards held by our executive officers and non-employee directors, other than certain shares of restricted stock held by our President and Chief Executive Officer, will be treated the same as equity awards held by our employees, depending on the status of the particular equity award, as described in the section entitled “The Merger Agreement—Treatment of Options and Restricted Stock.” In addition, each of our executive officers (including our President and Chief Executive Officer) has an agreement with us that would provide severance benefits (in the form of both cash payments and continuation of other benefits) if the individual’s employment is terminated in connection with, or within 18 months after, a change of control of ExpressJet, as described below.

President and Chief Executive Officer’s Change of Control Severance and Benefits. ExpressJet has entered into an employment agreement with its President and Chief Executive Officer, Mr. Thomas M. Hanley. Under the terms of this agreement, if Mr. Hanley were to be terminated by the Company for a reason other than death, incapacity, cause or material breach prior to or more than 18 months following a change of control, he would receive certain payments and benefits, including the following:

In addition, under the terms of this agreement, if Mr. Hanley were to be terminated by the Company for a reason other than death, incapacity, cause or material breach, or if he were to terminate his employment following a constructive termination, within 18 months following a change of control (or, in the case of a termination by the Company, prior to a change of control if such termination was to avoid the change of control provisions of the employment agreement), he would receive certain payments and benefits, including the following:

Notwithstanding the immediately preceding paragraph, if Mr. Hanley were to be terminated by the Company for a reason other than death, incapacity, cause or material breach, or if he were to terminate his employment due to a constructive termination following a change of control that occurs prior to April 19, 2011, he would receive certain payments and benefits, including the following:

Change of Control Severance and Benefits for Other Executive Officers. ExpressJet has entered into employment agreements with certain of its other executive officers. Under these agreements, if any of such executive officers were to be terminated by the Company for a reason other than death, incapacity, material

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breach or cause prior to or more than 18 months following a change of control, the executive officer would receive certain payments and benefits, including some or all of the following:

In addition, under these agreements, if any of such executive officers were to be terminated by the Company for a reason other than death, incapacity, material breach or cause, or if any of such executive officers were to terminate his or her employment following a constructive termination, within 18 months following a change of control (or, in the case of a termination by the Company, prior to a change of control if such termination was to avoid the change of control provisions of the employment agreement), the executive officer would receive certain payments and benefits, including some or all of the following:

For purposes of each of the employment agreements, including the agreement with Mr. Hanley, (i) “cause” is defined as gross negligence, willful misconduct, or abuse of alcohol or drugs that renders the executive officer unable to perform his or her duties, and (ii) a “constructive termination” will occur upon the assignment to the executive officer of duties materially inconsistent with those associated with his or her position, a material diminution in the nature or scope of the executive officer’s authority, conduct by the Company that prevents the executive officer from performing his or her duties, the Company’s requiring that the executive officer be permanently based outside a major urban center in Texas, actions by the Company that materially adversely affect the executive officer’s corporate amenities or the Company’s material breach of the agreement.

Each of ExpressJet’s executive officers would be entitled to a payment under the Company’s Long Term Incentive Plan if he or she were to be terminated following the merger and prior to December 31, 2010.

To ExpressJet’s knowledge, no written agreements for continued employment following the consummation of the merger exist between SkyWest and any of the Company’s named executive officers or outside directors.

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Potential Change of Control and Severance Benefits. The table below shows the benefits under the arrangements described above that would be received by each individual who has served as an executive officer since the beginning of the last fiscal year, assuming the merger closes and the executive officer’s employment is terminated immediately following the effective time of the merger, which is expected to occur during the fourth quarter of 2010.

Executive Officers’ Equity Holdings. Pursuant to the terms of agreements between ExpressJet and each holder of outstanding options to purchase ExpressJet common stock (all of which have an exercise price in excess of the per share merger consideration), each such option will be cancelled; provided that ExpressJet is entitled to pay the holders of options issued under ExpressJet’s 2002 Stock Incentive Plan $0.10 per share of ExpressJet common stock issuable upon exercise of such option as consideration for the release of any and all rights that such holder has or may have had to purchase shares of ExpressJet common stock or any other security upon exercise of such option. Each current and former executive officer will receive less than $1,000 in exchange for the release of his or her rights under such options.

As with shares of restricted common stock held by all other employees of the Company, any restrictions on shares of restricted common stock held by executive officers of the Company other than certain shares held by Mr. Hanley will lapse immediately prior to the effective time of the merger, and such shares will receive the

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same merger consideration as shares of the Company’s common stock not subject to any restrictions. Mr. Hanley’s restricted stock will vest in accordance with the terms of his Stand-Alone Restricted Stock Award Agreement, dated May 7, 2010, except that the Board has determined, pursuant to its discretion retained under the Stand-Alone Restricted Stock Award Agreement and contingent on the consummation of the merger, to amend such agreement to provide that, immediately prior to the effective time of the merger, the greater of (i) the percentage of such restricted stock provided for in the applicable vesting schedule and (ii) 40% of such restricted stock will be accelerated and vest in full immediately prior to the effective time. The following table shows the expected cash payments for shares of restricted common stock held by executive officers:

Non-Employee Director Equity Holdings. As described above, pursuant to the terms of agreements between ExpressJet and each holder of outstanding options to purchase ExpressJet common stock (all of which have an exercise price in excess of the per share merger consideration), each such option will be cancelled; provided that ExpressJet is entitled to pay the holders of options issued under ExpressJet’s 2002 Stock Incentive Plan $0.10 per share of ExpressJet common stock issuable upon exercise of such option as consideration for the release of any and all rights that such holder has or may have had to purchase shares of ExpressJet common stock or any other security upon exercise of such option. Each non-employee director will receive less than $200 in exchange for the release of his or her rights under such options. No non-employee director holds any shares of restricted stock.

Indemnification and Insurance

The merger agreement provides that after the effective time of the merger, to the fullest extent permitted by applicable law, the surviving company and SkyWest will indemnify, and advance expenses to, the current or former officers and directors of ExpressJet with respect to acts or omissions occurring at or prior to the effective time, provided that any person to whom expenses are advanced provides an undertaking to repay any advances made to the extent required by law. The merger agreement further provides that, prior to the effective time of the merger, ExpressJet will purchase, and following the effective time, the surviving company will maintain, a six-year “tail” officers’ and directors’ liability insurance policy on terms and conditions no less favorable than ExpressJet’s existing directors’ and officers’ liability insurance. The surviving company and SkyWest will pay all expenses, including reasonable fees and expenses of counsel, that an indemnified person may incur in enforcing the indemnity and other obligations described above, and the merger agreement provides that the foregoing rights of each indemnified person will survive the effective time of the merger and are enforceable by each indemnified person.

Opinion of the Company’s Financial Advisor

Goldman Sachs delivered its opinion to ExpressJet’s Board that, as of August 3, 2010, and based upon and subject to the factors and assumptions set forth therein, the $6.75 per share in cash to be paid to the holders (other than SkyWest and its affiliates) of shares of ExpressJet common stock pursuant to the merger agreement was fair from a financial point of view to such stockholders.

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The full text of the written opinion of Goldman Sachs, dated as of August 3, 2010, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B to this proxy statement. Goldman Sachs provided its opinion for the information and assistance of ExpressJet’s Board in connection with its consideration of the merger. The Goldman Sachs opinion is not a recommendation as to how any holder of shares of common stock of ExpressJet should vote with respect to the merger or any other matter.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

Goldman Sachs also held discussions with members of the senior management of ExpressJet regarding their assessment of the past and current business operations, financial condition and future prospects of ExpressJet. In addition, Goldman Sachs reviewed the reported price and trading activity for the shares of common stock of ExpressJet, compared certain financial and stock market information for ExpressJet with similar information for certain other companies the securities of which are publicly traded, reviewed the financial terms of certain recent business combinations in the U.S. airline industry and in other industries, and performed such other studies and analyses, and considered such other factors, as Goldman Sachs deemed appropriate.

For purposes of rendering the opinion described above, Goldman Sachs relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by Goldman Sachs, and does not assume any responsibility for any such information. In that regard, Goldman Sachs assumed with ExpressJet’s consent that the Final Projections were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of ExpressJet. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of ExpressJet or any of its subsidiaries and Goldman Sachs was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on the expected benefits of the merger in any way meaningful to Goldman Sachs’ analysis. Goldman Sachs also assumed that the merger will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to Goldman Sachs’ analysis.

Goldman Sachs’ opinion did not address the underlying business decision of ExpressJet to engage in the merger, or the relative merits of the merger as compared to any strategic alternatives that may be available to ExpressJet, nor did it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addressed only the fairness from a financial point of view, as of the date of the opinion, of the $6.75 per share in cash to be paid to the holders (other than SkyWest and its affiliates) of shares of common stock of ExpressJet pursuant to the merger agreement. Goldman Sachs did not express any view on, and the opinion did not address, any other term or aspect of the merger agreement or the merger or any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the merger, including, without limitation, the fairness of the merger to, or any consideration received in connection therewith by, the holders of any other class

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of securities, creditors or other constituencies of ExpressJet; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of ExpressJet, or class of such persons, in connection with the merger, whether relative to the $6.75 per share in cash to be paid to the holders of shares of common stock of ExpressJet pursuant to the merger agreement or otherwise. Goldman Sachs did not express any opinion as to the impact of the merger on the solvency or viability of ExpressJet or SkyWest or the ability of ExpressJet or SkyWest to pay its obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of the opinion and Goldman Sachs assumes no responsibility for updating, revising or reaffirming the opinion based on circumstances, developments or events occurring after the date of the opinion. Goldman Sachs’ advisory services and the opinion of Goldman Sachs were provided for the information and assistance of ExpressJet’s Board in connection with its consideration of the merger and such opinion does not constitute a recommendation as to how any holder of shares of common stock of ExpressJet should vote with respect to such merger or any other matter. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

The following is a summary of the material financial analyses delivered by Goldman Sachs to ExpressJet’s Board in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before August 3, 2010, and is not necessarily indicative of current market conditions.

Premium Paid Analysis. Goldman Sachs analyzed the $6.75 per share cash consideration to be paid to holders of shares of common stock of ExpressJet pursuant to the merger agreement in relation to the closing price of shares of common stock of ExpressJet on July 26, 2010, and in relation to the average market prices of shares of common stock of ExpressJet during the one-month, three-month, six-month and one-year periods ended July 26, 2010, and the high and low prices for the 52-week period ended July 26, 2010.

The following table presents the results of this analysis:

Analysis of Multiples at Offer Price. Goldman Sachs performed implied multiples analyses for ExpressJet and a group of selected peer companies (which included Pinnacle Airlines, Republic Airways and SkyWest Airlines). The multiples for ExpressJet were based on the Final Projections, Wall Street research, balance sheet data as of June 30, 2010 and the $6.75 per share in cash to be paid to the holders of shares of ExpressJet’s common stock pursuant to the merger agreement. The multiples for the selected peer companies were based on Wall Street and Capital IQ research, Institutional Brokers’ Estimate System (“IBES”) estimates and market data as of July 26, 2010. The financial metrics for the selected peer companies were based on Capital IQ research and public filings for 2009 financial year.

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For ExpressJet and the selected peer companies Goldman Sachs calculated:

The following table presents the results of this analysis:

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Illustrative Discounted Cash Flow Analysis. Goldman Sachs performed an illustrative discounted cash flow analysis on ExpressJet using the Final Projections for the years 2010 to 2014. Goldman Sachs calculated indications of net present value of free cash flows for ExpressJet using discount rates ranging from 21.50% to 23.50%, which were derived by utilizing a weighted average cost of capital analysis based on the capital asset pricing model and taking into account certain financial metrics, including betas, for ExpressJet, as well as certain financial metrics for the United States equity markets generally. The applied discount rates ranging from 21.50% to 23.50% were based on Goldman Sachs’ judgment of an illustrative range based upon the above analysis. Goldman Sachs also calculated indications of net present value of free cash flows for ExpressJet using perpetuity growth rates of 0.0% to 3.0%, which were selected by Goldman Sachs utilizing its professional judgment and experience, taking into account the Final Projections and market expectations regarding long-term growth of gross domestic product and inflation. This analysis resulted in illustrative present value indications per share of common stock of ExpressJet ranging from $6.04 to $6.57. In the illustrative discounted cash flow analyses described in this paragraph, ExpressJet’s unlevered free cash flow was calculated as the ExpressJet’s projected EBITDA as provided by ExpressJet’s management, minus taxes (calculated by multiplying the tax rate contained in the Final Projections by the ExpressJet’s projected EBIT), plus any non-cash stock-based compensation expense, plus any non-cash accrued expense for the warrants issued to UAL Corporation, minus its projected capital expenditures, and minus any projected increase in net working capital.

Precedent Airline Industry Transactions Analysis. Goldman Sachs analyzed certain information relating to the following transactions in the airline industry:

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For each of the selected transactions, Goldman Sachs calculated and compared equity consideration, adjusted enterprise value (assuming consideration for 100% of the company), and enterprise value based on the implied transaction price as a multiple of the target’s last 12 months sales, EBITDAR (calculated using adjusted enterprise value adding capitalized leases at 7.0 x LTM aircraft rental expense), earnings before interest, taxes, depreciation and amortization (“EBITDA”) and earnings before interest and tax (“EBIT”). While none of the selected transactions or the selected companies that participated in the selected transactions are directly comparable to the proposed merger or ExpressJet, the companies that participated in the selected transactions are companies with operations that, for the purposes of analysis, may be considered similar to certain of ExpressJet’s results, market size and product profile.

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The following table presents the results of this analysis:

Illustrative Present Value of Future Share Price Analyses. Goldman Sachs performed an illustrative analysis of the implied present value of the future price per share of ExpressJet’s common stock, which is designed to provide an indication of the present value of a theoretical future value of a company’s equity as a function of such company’s estimated future EBITDAR and its assumed price based on multiples of adjusted enterprise value to forward EBITDAR. For this analysis, Goldman Sachs used the Final Projections. Goldman Sachs first calculated the implied per share future prices of the common stock of ExpressJet, for each of the fiscal years 2011 to 2014, by applying an adjusted enterprise value to forward EBITDAR multiple of 5.5 x to the estimates of 2011 to 2014 EBITDAR prepared by ExpressJet’s management, then subtracting each year’s projected capitalized rent expenses and net debt, and dividing the aggregate by the estimated total number of current outstanding shares of ExpressJet’s common stock. Goldman Sachs selected terminal one-year forward EBITDAR

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multiple of 5.5x based on several factors, including analysis of the one-year forward EBITDAR multiples of selected companies which exhibited similar business characteristics to ExpressJet, and the trend of that one-year forward EBITDAR multiple over the past eight years. Goldman Sachs then calculated present values of the implied per share future prices for ExpressJet’s common stock in each of the fiscal years 2011 to 2014 by discounting the resulting values to present value as of June 30, 2010, using a discount rate of 23.54%. In conducting this analysis, Goldman Sachs used a discount rate of 23.54% derived by utilizing a cost of equity analysis based on the capital asset pricing model and taking into account certain financial metrics, including betas, for ExpressJet, small market capital size premium, as well as certain financial metrics for the United States equity markets generally. The applied discount rate of 23.54% was based on Goldman Sachs’ judgment of an illustrative range based upon the above analysis. This analysis resulted in a range of implied present values per share of common stock of ExpressJet of $3.69 to $6.63.

In addition, Goldman Sachs performed an illustrative analysis of the implied present value per share of ExpressJet’s common stock using public and precedent transactions multiple based valuations and the Final Projections. For the public multiple based valuation, Goldman Sachs first calculated the implied value per share of ExpressJet’s common stock as of June 30, 2011, by applying multiples of enterprise value to EBITDA of 4.5 x and 5.5 x to average EBITDA over the period 2011 - 2012. Goldman Sachs also calculated the implied value per share of ExpressJet’s common stock as of June 30, 2011 by applying multiples of adjusted enterprise value to EBITDAR of 5.0 x and 6.0 x to average EBITDAR over the period 2011 - 2012. After discounting the results to present value as of June 30, 2010, using a discount rate of 23.54%, reflecting an estimate of ExpressJet’s cost of equity, the analyses produced illustrative ranges of implied present values per share of ExpressJet’s common stock of $6.43 to $7.42 on an EV/EBITDA basis and $4.67 to $6.78 on an adjusted EV/EBITDAR basis. For the precedent transactions multiple based valuation, Goldman Sachs calculated the implied value per share of ExpressJet’s common stock as of June 30, 2010, by applying multiples of enterprise value to EBITDA of 9.0 x and 11.0 x to average EBITDA over the period 2009 - 2012. Goldman Sachs also applied multiples of adjusted enterprise value to EBITDAR of 6.5 x to 8.5 x. The analyses produced the illustrative ranges of implied values per share of ExpressJet’s common stock of $7.00 to $8.12 on a EV/EBITDA basis and $5.67 to $9.38 on an adjusted EV/EBITDAR basis.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to ExpressJet or the contemplated merger.

Goldman Sachs prepared these analyses for purposes of Goldman Sachs providing its opinion to ExpressJet’s Board as to the fairness from a financial point of view, as of the date of the opinion, to the holders (other than SkyWest and its affiliates) of shares of common stock of ExpressJet of the $6.75 per share in cash to be paid to such holders pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of ExpressJet, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The merger consideration was determined through arms’-length negotiations between ExpressJet and SkyWest and was approved by ExpressJet’s Board. Goldman Sachs provided advice to ExpressJet during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to ExpressJet

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or ExpressJet’s Board or that any specific amount of consideration constituted the only appropriate consideration for the merger.

As described above, Goldman Sachs’ opinion to ExpressJet’s Board was one of many factors taken into consideration by ExpressJet’s Board in making its determination to approve the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B to this proxy statement.

Goldman Sachs and its affiliates are engaged in investment banking and financial advisory services, commercial banking, securities trading, investment management, principal investment, financial planning, benefits counseling, risk management, hedging, financing, brokerage activities and other financial and non-financial activities and services for various persons and entities. In the ordinary course of these activities and services, Goldman Sachs and its affiliates may at any time make or hold long or short positions and investments, as well as actively trade or effect transactions, in the equity, debt and other securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of third parties, ExpressJet, SkyWest and any of their respective affiliates or any currency or commodity that may be involved in the transaction contemplated by the merger agreement for their own account and for the accounts of their customers. Goldman Sachs acted as financial advisor to ExpressJet in connection with, and participated in certain of the negotiations leading to, the merger. In addition, Goldman Sachs has provided certain investment banking services to ExpressJet and its affiliates from time to time for which Goldman Sachs’ Investment Banking Division has received, and may receive, compensation, including having acted as financial advisor to the Special Committee of ExpressJet’s Board in connection with the offer from SkyWest to acquire ExpressJet in June 2008 and as financial advisor to ExpressJet in connection with the amendment of its 4.25% convertible notes due 2023 (aggregate principal amount $128.2 million) in August 2008. Goldman Sachs may also in the future provide investment banking services to ExpressJet and SkyWest and their respective affiliates for which Goldman Sachs’ Investment Banking Division may receive compensation.

ExpressJet’s Board engaged Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement, dated July 21, 2008, ExpressJet engaged Goldman Sachs to act as its financial advisor in connection with potential strategic transactions. Pursuant to the terms of this engagement letter, ExpressJet will pay Goldman Sachs a transaction fee of approximately $3,500,000 in connection with the merger, all of which was contingent upon execution of the merger agreement. In addition, ExpressJet has agreed to reimburse Goldman Sachs for its expenses arising, and indemnify Goldman Sachs against certain liabilities that may arise, out of Goldman Sachs’ engagement.

Financial Projections

ExpressJet does not as a matter of course make public projections as to future financial performance, earnings or other financial results due to the unpredictability of the underlying assumptions and estimates. However, in connection with ExpressJet’s consideration of SkyWest’s acquisition proposal, ExpressJet’s management prepared four sets of financial projections of ExpressJet’s stand-alone financial performance for the fiscal years of 2010 through 2014 (collectively, the “Projections”). In each set of projections, stock-based compensation was accounted for as a non-cash expense.

The first set of projections prepared by ExpressJet’s management (the “Status Quo Projections”) were provided to ExpressJet’s advisors to facilitate a valuation discussion at the Board meeting held on May 13, 2010, shortly after receiving the unsolicited offer from SkyWest. The Status Quo Projections did not include the estimated cost savings expected to be provided by Operation: Green Light, which was under development at that time.

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Status Quo Projections