ExpressJet Holdings, Inc. received notice that it is not in compliance with New York Stock Exchange requirements for a $1.00 average share price for continued listing. The standard requires that the average price per share of common stock be at least $1.00 per share over a 30-day trading period. The notification came after the stock was moved to trading on the NYSE's Arca market under a non-regulatory trading halt condition called a sub-penny halt. The company's common stock will continue trading on the NYSE Arca market until it trades above $1.10 per share for an entire trading day.

XJT Asks for Stock Review
In separate news, ExpressJet Holdings, Inc., spotting unusual trading activity in its common stock shortly before the close of the market yesterday, contacted NYSE Regulation, Inc. (NYSER) to request an immediate review as to whether its stock has been the subject of illegal manipulation, including short selling. It followed-up with an investigative request to the Securities and Exchange Commission. The NYSER agreed to conduct a review of this matter and the company intends to fully cooperate with any investigation as it believes such action is prudent to represent the best interests of all security holders in ExpressJet.

Under the NYSE rules, ExpressJet must return to compliance with the $1.00 average share price continued listing standard within 6 months to avoid delisting. The company intends to do so and is pursuing various solutions to satisfy the standard, including the previously announced suspension of unprofitable, branded flying operations on September 2 and the achievement of $100 million in cost savings initiatives related to the amended capacity purchase agreement with Continental Airlines, Inc. which became effective on July 1. Additional alternatives that may be reviewed include a reverse stock split, which would require ExpressJet stockholder approval.
ExpressJet has already made progress related to its cost savings measures including instituting a wage and benefit reduction of up to five percent for its management and clerical employees that became effective July 16 and offering various early out and company sponsored leave programs.

Amends Indenture
The company also said it plans to unilaterally amend the indenture governing its 4.25 percent convertible notes due 2023 in order to provide improved terms and additional flexibility for note holders. These benefits will apply to anyone holding the notes on August 2, 2008 following the consummation of the exchange offer that is currently being conducted as required by the indenture. Under the current indenture, note holders may require the company to exchange their notes on August 1, 2008 and the company has begun the required exchange offer with the intention to satisfy the obligation wholly in shares of common stock. Those note holders who retain their notes will automatically receive the benefits of the unilateral amendment, including:
• Security based on a pro-rata amount of collateral appraised at approximately $181 million, including approximately $96 million in spare parts and $85 million of spare engines;
• Coupon increased from 4.25% to 11.25% over the remaining note term; and
• An additional put right in three years or on August 1, 2011.

The amount of collateral described above will be based on the ratio of the aggregate principal of notes outstanding on August 2, 2008 to $128.2 million, the aggregate principal amount of notes outstanding. The terms of this additional put right will be identical to those for the current rights under the indenture for August 1 of 2008, 2013 and 2018.
The trustee under the indenture is supportive of the company's decision to provide note holders additional flexibility and improved terms beyond the August 1, 2008 put date. These amendments, however, must be reviewed and approved by the trustee before becoming effective.