Exhibit 10.12(c)


 


SECOND
AMENDED AND RESTATED SEVERANCE AGREEMENT


 


THIS SECOND AMENDED AND
RESTATED SEVERANCE AGREEMENT (the “Agreement”) is made and entered into as of
this 15th day of March, 2005 (the “Effective Date”), by and between FLYi, INC.,
a Delaware corporation (“FLYi”) and INDEPENDENCE AIR, a California corporation
(“IA”) (FLYi and IA are herein collectively referred to as the “Company”) and Richard J. Surratt (“Surratt”).


 


Witnesseth That:


 


Whereas,
Surratt is currently employed by the Company as Executive Vice President, Chief
Financial Officer, Treasurer and Assistant Secretary, and in connection with
such employment entered into a Severance Agreement dated as of December 28,
2001 (which was restated as of November 17, 2003) (the “Prior Severance
Agreement”) with the Company; and


 


Whereas,
the Company wishes to assure itself of the continued services of Surratt; and


 


Whereas,
to promote the Company’s efforts to reduce its costs on both a cash and
accounting basis, the Company and Surratt have agreed to certain modifications
to the Prior Severance Agreement to defer or reduce certain significant
compensation benefits provided for under the Prior Severance Agreement; and


 


Whereas,
on November 17, 2003, the Compensation Committee of the Board of Directors of
FLYi determined that the best interests of the Company would be served by
amending and restating the terms and conditions of and benefits provided under
the then-existing Amended and Restated Severance Agreement with Surratt;


 


Now, Therefore, the parties, for and in consideration of the mutual and reciprocal
covenants and agreements hereinafter contained, and intending to be legally
bound hereby, do contract and agree as follows:


 


1.             Employment 
Company hereby employs Surratt and Surratt hereby accepts employment by
Company and agrees to perform his duties and responsibilities hereunder upon
all of the terms and conditions as are hereinafter set forth.  For purposes of this Agreement, as used in the definition of Change in
Control, “Company” shall mean FLYi, Inc., and as used elsewhere in this
Agreement shall mean FLYi, Inc. and its subsidiaries, and shall also mean any
successor to FLYi, Inc., including without limitation any corporation or other
entity into which it is merged or which acquires all or substantially all of
its outstanding common stock or assets.


 





















 


2.             Duties 
Surratt shall serve the Company in the capacities of Executive Vice
President, Chief Financial Officer, Treasurer and Assistant Secretary.  Surratt shall generally be responsible for
supervising and directing the financial affairs of the Company and of any other
entity(ies) to which the Company’s obligations under this Agreement shall be
assigned pursuant to Paragraph 12. 
Surratt shall otherwise be responsible for carrying out all such other
duties and services for the Company commensurate with Surratt’s position, as
may be designed from time to time by the Chief Executive Officer of the Company
(the “CEO”).


 


3.             Term of Employment  Surratt’s term of employment under this Restated
Agreement shall commence on the Effective Date and shall terminate on the last
day of the calendar month which is twelve (12) calendar months after the
Effective Date, unless further extended as hereinafter set forth.  Commencing on each successive anniversary of
the Effective Date, the Agreement shall automatically be extended for an
additional twelve (12) months without further action by either party unless
Surratt’s employment has previously been terminated or unless Surratt or the
Company has provided notice of intention to terminate Surratt’s employment
pursuant to the terms of Paragraph 10 below, in which case Surratt’s term of
employment under this Agreement will be extended to the pending Termination
Date.


 


4.             Extent of Service 
Surratt shall devote such time and attention as is required to perform
his obligations under this Agreement and will at all times faithfully and
industriously, consistent with his ability, experience and talent, perform his
duties hereunder under the direction of the CEO.


 


5.             Compensation 
During the term of this Agreement, Company agrees to pay to Surratt, and
Surratt agrees to accept from Company, in full payment for services rendered by
Surratt and work to be performed by him under the terms of this Agreement, the
following:


 


A.            Salary. 
An annual base salary as of the Effective Date of one hundred
ninety-three thousand five hundred dollars ($193,500).  Commencing on October 1, 2005 and on each
October 1 thereafter, the amount of Surratt’s base salary shall be increased as
determined by the Compensation Committee of the Board of Directors of the
Company (the “Compensation Committee”). 
Surratt’s base salary for each year shall be payable to him in
accordance with the reasonable payroll practices of the Company as from time to
time in effect for executive employees (but in no event less often than
monthly).


 


B.            Management
Incentive  Plan. 
Surratt shall participate in the Company’s Management Incentive Program,
or any successor bonus plan or program for management employees.


 


C.            Executive Bonuses. 
Surratt shall be eligible for an additional annual bonus under an
executive performance bonus plan currently known as Senior Management Incentive
Plan (“SMIP”) for so long as the Board of Directors determines to maintain such
plan.  Under such plan, each calendar
year, Surratt shall be entitled to receive a bonus equal to a specified
percentage of base salary upon the attainment of certain


 


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pre-established goals. 
Such goals and percentage of salary shall be determined by the
Compensation Committee.  The bonus amount
each year shall be paid in cash, stock, options or such other form as the
Compensation Committee provides, paid at the time period provided under such
plan, at the same time and in the same form as paid generally to other eligible
employees, except to the extent that this Agreement provides otherwise.


 


D.            Deferred Compensation.


 


(i)            Notwithstanding
anything to the contrary in the Prior Severance Agreement, Deferred Compensation
(as defined below) shall be provided as described in this Paragraph 5.D., which
shall supercede and control over all prior deferred compensation
arrangements.  As of the Effective Date,
the Company has credited amounts of deferred compensation under an unfunded and
non-tax qualified arrangement (“Deferred Compensation”) pursuant to the Prior
Severance Agreement.  The amounts
credited as Deferred Compensation are recorded as a bookkeeping entry
representing a general unsecured obligation of the Company and Surratt shall
not have a claim to any specific assets of the Company in satisfaction of the
amounts, if any, payable as Deferred Compensation.  As of the Effective Date, the balance in the
Deferred Compensation account recorded for Surratt equals $752,400, which is
the amount of the Company’s Deferred Compensation “contributions” under the
Prior Severance Agreement between the Company and Surratt, as such was amended
from time to time, through the Effective Date. 
After the Effective Date, the Company will credit Deferred Compensation
at the rate of seventy-five percent
(75%) of Surratt’s annual base salary until the Deferred Compensation
Ending Date.  Deferred Compensation will
be based on Surratt’s annual base salary in effect on January 1 in each year,
and will be credited as of January 1 in each year.  The Company may provide the Deferred
Compensation through a benefit plan so long as (1) the amount credited by the
Company on Surratt’s behalf equals the amount set forth herein, and (2) the
vesting schedule, credit for Years of Service, and terms of distribution are
all at least as favorable to Surratt as set forth herein.  After the Deferred Compensation Ending Date,
(A) the Company’s obligation to credit Deferred Compensation for the benefit of
Surratt shall terminate and (B) the Company shall have no further obligation to
accrue any additional Deferred Compensation for the benefit of Surratt.  No interest or rate of return or other
appreciation or depreciation of value shall accrue or be payable on amounts
credited to Surratt as Deferred Compensation pursuant to this Paragraph 5.D.
unless the Company elects otherwise.


 


(ii)           Vesting
of Deferred Compensation will be based upon “Years of Service,” with Surratt to
be credited with one Year of Service for completion of each twelve (12)
consecutive month period of employment with the Company beginning on the first
day of Surratt’s employment with the Company and ending on the Deferred
Compensation Ending Date (as defined below). 
(That is, Surratt will continue to be credited with Years of Service
during any applicable Severance Period, as further provided in Paragraph
10.E.(iv) hereof.)  Surratt will become
vested in the Deferred Compensation based on the following schedule, with the
effect that no later than January 1, 2008, Surratt shall be 100% vested:


 


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  YEARS OF SERVICE

  	
   

  	
  PERCENTAGE

  VESTED

  	
   

  
	
  Less than 4

  	
   

  	
  0

  	
  %

  
	
  At least 4 but
  less than 5

  	
   

  	
  25

  	
  %

  
	
  At least 5 but
  less than 6

  	
   

  	
  35

  	
  %

  
	
  At least 6 but
  less than 7

  	
   

  	
  50

  	
  %

  
	
  At least 7 but
  less than 8

  	
   

  	
  65

  	
  %

  
	
  At least 8 but
  less than 9

  	
   

  	
  80

  	
  %

  
	
  At least 9

  	
   

  	
  100

  	
  %

  



 


In the event of a Change
in Control (as defined and determined under Paragraph 8.B.(ii) of this
Agreement) of the Company, Surratt shall become immediately 100% vested in his
Deferred Compensation amount notwithstanding the above vesting schedule.


 


(iii)          The
“Deferred Compensation Ending Date” shall mean the earliest
of (a) January 1, 2008, (b) the Termination Date (as defined below)
if Surratt’s employment with the Company is terminated at any time under
circumstances that do not entitle him to Severance Compensation pursuant to
Paragraph 10 of this Agreement, and (c) the last day of the Severance Period
(as defined in Paragraph 10) if Surratt is entitled to Severance
Compensation.  During a Severance Period,
Deferred Compensation shall continue to accrue and vest pursuant to the terms
of Paragraph 10.E.(iv) hereof; provided, however, that in no event shall there
be any additional accruals after January 1, 2008.  Upon the Deferred Compensation Ending Date,
the Company shall pay to Surratt in cash whatever Deferred Compensation amount
is equal to the applicable vested percentage of the total amount then credited
to his account pursuant to this Paragraph 5.D., provided that the Company shall
have a right of set-off against, and may reduce the amount payable as Deferred
Compensation by, any amount owed or payable by Surratt to the Company,
including as provided in Paragraph 5.E.


 


E.             Split Dollar Life Insurance.  Notwithstanding anything to the contrary in
the Prior Severance Agreement, the Company shall maintain a split dollar life
insurance arrangement covering Surratt as described in this Paragraph 5.E,
which shall supercede and control over all prior deferred compensation
arrangements.  As of the Effective Date,
the Company has paid $707,400 to fund payment of the premiums under a split
dollar life insurance arrangement covering Surratt.  The Company shall advance amounts to fund
payment of the premiums under a split dollar life insurance arrangement
covering Surratt as provided in this Paragraph 5.E.  As of the date hereof, the split dollar life
insurance arrangement is provided under a policy or policies with Phoenix Home
Life Mutual (such policies and agreements related thereto, the “Split Dollar
Agreement”).  The Company shall continue
to abide by the terms of the Split Dollar Agreement with Surratt in force on
the date of this Agreement, but, subject to the foregoing, the Company may
implement a substitute Split Dollar Agreement so long as the amount of premiums
funded by the Company on Surratt’s behalf equals the amount set forth herein.


 


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(i)            Surratt
shall be the owner of the policy under the Split Dollar Agreement and will have
the right to designate his beneficiary with respect to proceeds of the policy
payable upon his death; provided, however, that notwithstanding the foregoing,
the Company shall have a collateral assignment of the policy as security for
the repayment of the amounts paid by the Company toward the premiums for the
policy.


 


(ii)           The
Company shall pay the annual premium due on the policy in an amount specified
in this Agreement, as amended from time to time.  From and after the Effective Date and up to
and including the Deferred Compensation Ending Date, the amount of the annual
premium the Company pays shall equal $146,250 
(which is seventy-five percent (75%) of Surratt’s annual base salary in
effect on July 29, 2002) in each year the Company is obligated to fund the
premium as described herein.  Provided
that Surratt remains employed with the Company as of January 1 in a year, the
Company shall, except as provided in Paragraph 5.E.(iii) below, for such year
pay, on or before the due date(s) under the terms of the policy, the entire
amount of the annual premium due on the policy acquired pursuant to this
Paragraph 5.E.  During any Severance
Period, the Company’s obligation to pay the annual premium due on the split
dollar insurance policy shall end on the Termination Date unless Surratt’s
employment is terminated upon or within twelve months following a Change in
Control, in which case said payments will continue through the Severance Period
(but in no event after January 1, 2008). 
Notwithstanding any other provision of this Agreement to the contrary,
after the Deferred Compensation Ending Date, (A) the Company’s obligation under
the Prior Severance Agreement to pay the annual premium due on the policy shall
terminate and (B) the Company shall have no further obligation to fund any
premium payments in excess of the amount funded as of the Effective Date, which
amount is set forth in the first paragraph of this Section 5.E.


 


(iii)          The
“Split Dollar Release Date” shall mean the Deferred Compensation Ending
Date.  The Company shall fund payment of
the premiums as provided in the Paragraph 5.E. in each year until the Split
Dollar Release Date.  Upon the Split
Dollar Release Date, the following shall occur:


 


(a)           If the Company elects pursuant to
Paragraph 5.D.(iii) to offset its obligation to pay the Deferred Compensation
against Surratt’s obligation to pay the total of all premiums paid by the
Company on the split dollar policy(ies) acquired pursuant to Surratt’s
employment with the Company then, in complete satisfaction of the Company’s
obligation to pay the Deferred Compensation to Surratt, the Company shall
release its entire interest in the policy on Surratt’s life acquired pursuant
to the terms of the Split Dollar Agreement. 
Surratt hereby agrees that such action shall satisfy the Company’s
obligation with respect to the Deferred Compensation.  The Company agrees that the amount of any
such release of interest by the Company shall satisfy in full the amount of “Liabilities”
(as such term is defined in the Agreement of Assignment of Life Insurance Death
Benefit As Collateral entered into between Surratt and the Company in
connection with the Split Dollar Agreement) owed to the Company in connection
with the Split Dollar Agreement and related Collateral Assignment
Agreement.  Accordingly, the Company also
agrees as of such date to release in full its interest as acquired by
collateral assignment of the policy pursuant to the Split Dollar Agreement and
related Collateral Assignment Agreement.


 


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(b)           The Split
Dollar Agreement shall continue in full force and effect and survive separate
and apart from this Agreement; provided, however, that the Company shall have
no further obligation to pay any premium on the policy under the Split Dollar
Agreement which has a due date after the Split Dollar Release Date and such
obligation shall be transferred to Surratt.


 


F.             Discretionary
Compensation.  The Company may pay Surratt discretionary
compensation, bonuses and benefits in addition to those provided for herein in
such amounts and at such times as the Compensation Committee shall determine.


 


G.            Compensation Upon a
Change in Control.  Upon a Change in Control, whether or not
Surratt’s employment has terminated, Surratt shall receive all of the following
compensation, paid at the time of the Change in Control:


 


(i)            Salary. A payment in the amount of 300% of
Surratt’s annual base salary in effect at the time of the Change in Control.


 


(ii)           Bonus. 
For all bonus plans in which Surratt is participating as of a Change in
Control, the Company shall pay to Surratt a lump sum bonus payout. This payout
shall consist of a payment in the amount calculated by the formula [(x + y) *
z] where (x) is Surratt’s base salary earned in the year from January 1 to the
date of the Change in Control, (y) is the amount which is three times Surratt’s
annual base salary in effect at the time of the Change in Control, and (z) is
the percentage which under each plan is the maximum percentage of base salary
that Surratt was eligible to earn during the year in which the Change in
Control occurred assuming all targets were met in full, whether or not said
targets actually were met.  The payments
provided for under this Paragraph 5.G.(ii) will be paid within thirty days
following the Change in Control in cash or in such other form as bonus amounts
generally are paid to eligible employees, or in a combination thereof, as
determined by the Compensation Committee, whose determination and valuation of
any non-cash compensation shall be final and binding, and shall be considered
to be full compensation for all amounts due to Surratt for bonus plans in which
he was participating as of the Change in Control, and he shall not be entitled
to any further payments under any of said plans during the year of
participation, other than pursuant to any arrangements as provided in Paragraph
5.G.(iv) below.  Notwithstanding the
above, any bonus due to Surratt for years (or any other applicable bonus
period) completed prior to the date on which the Change of Control occurs but
not yet paid shall be paid in addition to the bonus described herein.


 


(iii)          Disability Insurance. 
The Company will prepay, to the time of Surratt’s reaching age 65, the
premiums due on any disability insurance policy as was provided to Surratt as
of the time of Change in Control.  In the
event that the Company discontinued or reduced the amount of coverage of any
disability insurance within one year preceding a Change in Control, the Company
shall at the time of the Change in Control re-establish disability insurance to
the amount previously provided and with equivalent coverage, and shall prepay
future premiums as provided herein.


 


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(iv)          Other Benefits Upon a Change in
Control.  Surratt shall receive all of the other
benefits separately provided herein or in other agreements as occurring upon a
Change in Control.  These include,
without limitation, vesting of unvested stock options and restricted
stock.  In the event a Change in Control
occurs, Surratt shall be entitled to the insurance benefits provided upon
Change in Control per Paragraph 10.E.(v) and the travel benefits, per Paragraph
10.E.(viii), as provided upon a Change in Control.  These benefits will apply at the time of
termination of Surratt’s employment, even if Surratt’s employment is
subsequently terminated in a fashion that does not give rise to Severance
Compensation.


 


(v)           Certain Adjustments.  
If, as a result of payments provided for under or pursuant to this
Agreement together with all other payments in the nature of compensation
provided to or for the benefit of Surratt under any other agreement in
connection with a Change in Control, any state, local or federal taxing
authority imposes any taxes on Surratt that would not be imposed on such
payments but for the occurrence of a Change in Control, including any excise
tax under Section 4999 of the Internal Revenue Code and any successor or
comparable provision, then, in addition to any other benefits provided under or
pursuant to this Agreement or otherwise, the Company (including any successor
to the Company) shall pay to Surratt at the time any such payments are made
under or pursuant to this or the other agreements, an amount equal to the amount
of any such taxes imposed or to be imposed on Surratt  (the amount of any such payment, the “Parachute
Tax Reimbursement”).  In addition, the
Company (including any successor to the Company) shall “gross up” such
Parachute Tax Reimbursement by paying to Surratt at the same time an additional
amount equal to the aggregate amount of any additional taxes (whether income
taxes, excise taxes, special taxes, employment taxes or otherwise) that are or
will be payable by Surratt as a result of the Parachute Tax Reimbursement being
paid or payable to Surratt and/or as a result of the additional amounts paid or
payable to Surratt pursuant to this sentence, such that after payment of such
additional taxes Surratt shall have been paid on a net after-tax basis an amount
equal to the Parachute Tax Reimbursement. 
The amount of any Parachute Tax Reimbursement and of any such gross-up
amounts shall be determined by the Company’s independent auditing firm, whose
determination, absent manifest error, shall be treated as conclusive and
binding absent a binding determination by a governmental taxing authority that
a greater amount of taxes are payable by Surratt.


 


H.            Employment or
Termination Following a Change in Control. Provided that he remains employed and the parties
have not otherwise agreed to amend this Agreement, following a Change in
Control Surratt’s employment shall continue on the terms set forth in this
Agreement and Surratt shall remain subject to this Agreement, and be entitled
to receive the compensation, payments and benefits provided for in this
Agreement.  In the event that Surratt’s
employment is terminated upon or within one year following the Change in
Control, such that Surratt would be entitled to Severance Compensation, any
amounts due at the time of termination as Severance Compensation under
Paragraphs 10.E.(i) and 10.E.(ii) herein shall be reduced by any amounts paid
under Paragraph 5.G.(i) and 5.G.(ii) at the time of Change in Control  (under no circumstances would Surratt be
required to repay the amounts paid to Surratt under Paragraph 5.G(i) and
5.G.(ii)), but Surratt will be entitled to all other Severance Compensation as
provided in Paragraph 10.E. herein. In the event that Surratt’s employment is


 


7





















 


terminated more than one year following the Change in
Control, Surratt will be entitled to all payments and benefits provided for
herein with respect to such termination of employment.


 


6.             Benefits


 


A.            The Company shall pay for or provide
Surratt such vacation time and benefits, including but not limited to, coverage
under Company’s major medical, accident, health, dental, disability and life
insurance plans, as are made available to other executive employees of Company
generally (and, to the extent provided by such policies, to Surratt’s
dependents).


 


B.            The Company agrees to promptly reimburse
Surratt for any otherwise unreimbursed health or medical insurance premiums
and/or uncovered medical expenses up to $10,000 per calendar year under a
written medical reimbursement plan maintained for Surratt and other key
executive employees.  If such payments
are taxable to Surratt, the Company shall pay Surratt a gross-up equal to the
estimated income, FICA and Medicare taxes due with respect to such
reimbursement, with federal and state income taxes being estimated at the
highest marginal rates.


 


C.            Surratt shall be eligible to participate
in any profit sharing plan, employee stock ownership plan or other qualified
retirement plan adopted by Company to the same extent as other executive
employees of Company.  Surratt shall also
be eligible to participate in any stock option, restricted stock, stock
appreciation rights or stock purchase plans or programs of Company, which
participation shall be at levels as may be determined appropriate by the
Compensation Committee.


 


D.            The Company agrees to reimburse Surratt
for the cost of investment and tax planning services up to $5,000 incurred
during each calendar year.  If such
payments are taxable to Surratt, the Company shall pay Surratt a gross-up equal
to the estimated income, FICA and Medicare taxes due with respect to such
reimbursement, with federal and state income taxes being estimated at the
highest marginal rates.


 


7.             Reimbursement of Expenses 
The Company agrees to promptly reimburse Surratt, within fifteen (15)
days after presentation of receipts and other appropriate documentation, for
all reasonable, ordinary and necessary travel costs and other necessary
expenses incurred by Surratt in performing his duties pursuant to this
Agreement.


 


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8.             Stock Options


 


A.            The Company may from time to time grant to Surratt
options under FLYi’s stock option plan to purchase shares of the common stock
of FLYi at the price per share at the opening of the trading market on the date
of such grant.  Any such grant will be
pursuant to the terms of the Stock Option Agreement being utilized at the time
of the grant for stock options granted to Executive Vice Presidents of the
FLYi, except that options granted to Surratt shall contain terms relating to
the consequences of a Change in Control that are no less favorable to Surratt
than the terms contained in the form of Stock Option Agreement granted to
Surratt on June 26, 2000.  The
Compensation Committee retains full discretion of whether to grant any stock
options.


 


B.            Surratt and the Company agree that,
effective as of March 15, 2005, the stock options set forth on Attachment A to
this Agreement, which were previously granted by FLYi to Surratt, shall be
cancelled and of no further effect and Surratt shall have no further rights or
claims with respect thereto.


 


9.             Deductions 
Deductions shall be made from any component of Surratt’s compensation
provided pursuant to this Agreement or otherwise for social security, Medicare,
federal, state and local withholding taxes, and any other such taxes as may
from time to time be required by any governmental authority.


 


10.          Termination 
Surratt’s employment with the Company shall be terminated only in accordance
with the following provisions:


 


A.            Disability.


 


(i)            In the event Surratt shall become
mentally or physically disabled so as to have been unable to perform his duties
hereunder for six (6) consecutive months, subject to Surratt’s right to
return to work as provided below, Company shall have the right to terminate
Surratt’s employment with Company upon the expiration of such six month
period; provided, however, that upon any such termination Company shall be
obligated to provide Surratt with Severance Compensation as provided in
Paragraph 10.E. herein.  Such six-month
period shall be deemed to have commenced on the date when Surratt is first
unable to perform his duties on a substantially full-time basis because of
mental or physical disability and shall end on the date on which Surratt shall
return to the substantial full-time performance of his duties.  If at the expiration of such six month
period, the Company shall desire to terminate Surratt on the basis of disability,
it shall give written notice to him. 
Surratt’s employment shall thereafter be terminated if he does not
return to substantial full-time performance of his duties within ten (10)
calendar days after such notice is given.


 


(ii)           Nothing contained herein shall be
construed to affect Surratt’s rights under any disability insurance or similar
policy, whether maintained by the Company, Surratt or another party.  The Company may utilize a disability policy
to fund, in whole or in part, the compensation that would be due to Surratt
during the term of or in the event


 


9





















 


of a disability, in which case the proceeds of the
policy would not be in addition to any compensation otherwise payable to
Surratt.


 


(iii)          For purposes of this Agreement, Surratt shall
be deemed to be disabled when he shall have been absent from his duties because
of sickness, illness, injury or other physical or mental infirmity on a
substantially full-time basis.  In the
event of a dispute as to whether Surratt is disabled, the issue of the
determination of disability shall be submitted to a Board of Arbiters for a
binding decision under the procedures set forth in Paragraph 10.A.(v) below.


 


(iv)          At the end of any disability (other than
a disability that results in the termination of Surratt’s employment with the
Company), Surratt shall return to work and this Agreement shall continue as
though such disability had not occurred.


 


(v)           If there is a dispute as to whether
Surratt is subject to any disability, the issue shall be submitted to a Board
of Arbiters (whose decision shall be binding on the Company and Surratt)
consisting of three persons: one physician who specializes in the physical or
mental disability in dispute (hereinafter referred to as a “Specialist”) shall be appointed on behalf of Company by the
Chairman of the Board, or by the Compensation Committee; a second Specialist
shall be appointed by Surratt and a third Specialist shall be appointed by the
two Specialists so appointed.  The
decision of a majority of such Specialists shall be binding upon the parties
hereto.  If a majority of the Specialists
determines that Surratt is not subject to any disability for purposes of this
Agreement, Surratt shall return to work under the provisions hereof.  Such Specialists may physically examine
Surratt, who hereby consents to such examination and to make available any
pertinent medical records.  The cost of
such Specialists shall be paid by Company.


 


(vi)          If it is determined that Surratt can
return to work hereunder on a part-time basis, the parties agree to use good
faith efforts to negotiate the terms of Surratt’s return to work.


 


(vii)         During any period in which Surratt is
disabled but his employment shall not have been terminated, Surratt shall
continue to receive his base salary and any applicable bonus, and shall
continue to receive all benefits as an employee and as provided herein
generally. Any options previously granted shall continue to vest, but no new
options shall be issued to Surratt.  Any
mandatory option grants as provided herein shall be deferred until such time as
the disability period ends.


 


(viii)        During any period in which Surratt is
disabled but his employment shall not have been terminated, Surratt shall
continue to be credited with Years of Service for purposes of vesting of
Deferred Compensation as set forth in Paragraph 5.D.


 


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B.            Death.


 


(i)            Surratt’s employment with Company shall
terminate immediately upon Surratt’s death; provided, however, that Company
shall be obligated to provide the Severance Compensation as specified in
Paragraph 10.E. herein to Surratt’s estate, heirs or beneficiaries.


 


(ii)           Nothing contained herein shall be
construed to affect Surratt’s rights under any life insurance or similar policy,
whether maintained by Company, Surratt or another party.  The Company may utilize a life insurance
policy to fund, in whole or in part, the Severance Compensation that would be
payable in the event of Surratt’s death, in which case the proceeds of any such
policy other than the Split Dollar Agreement would not be in addition to any
Severance Compensation otherwise payable under this Paragraph 10.B.


 


C.            Termination by Surratt.


 


(i)            Other than Following a Change in
Control.  Surratt may terminate his
employment by delivering to Company sixty (60) days’ written notice, and such
termination shall be effective on the sixtieth (60th) day following the date of
receipt of such notice (the “Termination Date”).  In such event, Surratt (i) shall continue to
render his services up to the Termination Date if so requested by Company and
(ii) shall be paid his regular base salary and shall receive all benefits up to
the Termination Date.  Surratt will be
entitled to payment of any bonus due but not yet paid for prior bonus periods
(paid at the same time it would have been paid had Surratt’s employment not
been terminated), but will not be entitled to Severance Compensation, to any
bonus for the current bonus period, or to any other compensation, bonus or
fringe benefits accrued after the Termination Date.


 


(ii)           Following a Change in Control.  Notwithstanding the above, in the event of
any termination by Surratt of his employment with the Company which is effected
within twelve (12) months following a Change
in Control as defined and determined under Paragraph 8.B. of this
Agreement, Company shall be obligated to provide Surratt with Severance
Compensation as provided in Paragraph 10.E. herein; provided that payments made
as separately provided in Paragraph 5.H. of this Agreement shall be deducted
from Severance Compensation due in this event. 
The twelve month period will be deemed to mean any notice given within
twelve months following a Change in Control where an actual termination occurs
within sixty days following said notice.


 


D.            Termination by Company.


 


(i)            Without Cause.  Company may, without cause, terminate Surratt’s
employment under this Agreement at any time by giving Surratt fifteen (15) days’
written notice thereof, and such termination shall be effective on the fifteenth
day following the date such notice is given (said 15th day, the “Termination Date”). 
In the event Surratt’s employment with Company is terminated without
cause, Company shall be obligated to provide Surratt with Severance
Compensation as provided in Paragraph 10.E. herein.  At the option of


 


11





















 


Company, Surratt’s employment shall be immediately
terminated upon the Company giving such notice, in which case Surratt shall
continue to receive his full base salary and related fringe benefits through
the Termination Date.  Notwithstanding
any provision of this Agreement to the contrary, any termination of Surratt’s
employment by the Company, for any reason or no reason, effected as a result
of, in connection with or within twelve (12) months following a Change in Control, as defined and
determined under Paragraph 8.B. of this Agreement, shall automatically be
deemed to be a termination without cause provided that any amounts due as
Severance Compensation shall be reduced as provided in Paragraph 5.H.  The twelve month period will be deemed to
mean any notice given within twelve months following a Change in Control
regardless of when actual termination occurs following said notice.


 


(ii)           For Cause. Company may terminate Surratt’s
employment under this Agreement immediately for “cause”.  In such event, the Company shall not be
liable to Surratt for any compensation, bonus or benefits after the date of
termination of employment. Cause shall be defined as any of the following: (i)
willful unauthorized misconduct in the material performance of Surratt’s duties
hereunder, (ii) commission of an act of theft, fraud, dishonesty or personal
misconduct by Surratt, which act is harmful to Company, (iii) breach of any
provision of this Agreement if such breach has not been cured by Surratt (or if
Surratt has not compensated the Company for such breach by payment of an amount
deemed reasonable by the Company if the breach cannot be cured) within fifteen
(15) days after the Company gives Surratt written notice of such breach.  Any termination under this Paragraph
10.D.(ii) shall take effect immediately upon the Company giving Surratt written
notice thereof.


 


E.             Severance Compensation.  “Severance Compensation” is defined as all of the
compensation and benefits described in this Paragraph 10.E.  It will be provided to Surratt upon the
occurrence of any of the events described elsewhere in this Agreement as
providing for Surratt’s receipt of Severance Compensation, but not in any other
circumstances except to the extent that individual components of Severance
Compensation may be separately provided pursuant to the terms of this
Agreement.  “Termination
Date” is defined as the last day of Surratt’s employment with the
Company.  “Severance
Period” is defined as the period beginning on the day following the
Termination Date and ending on the day which is two years following the
Termination Date. Benefits extending to Surratt’s spouse shall refer to Surratt’s
spouse as of the date such benefits are extended or, after Surratt’s death, to
Surratt’s spouse as of the date of his death. 
The compensation and benefits to be provided as Severance Compensation
are as follows:


 


(i)            Severance Pay. 
Throughout the Severance Period, Surratt will receive severance pay at
the rate of 100% of his annual base salary in effect at the time of his
termination, to be paid on the Company’s regular payroll payment dates at the
same time and in the same fashion as the Company’s regular payroll payments.


 


(ii)           Bonus. For all bonus plans in which Surratt is
participating as of the Termination Date, the Company shall pay to Surratt a
lump sum bonus payout.  This payout shall
consist of a payment in the amount calculated by the formula [(x + y) * z]
where (x) is Surratt’s base salary earned in the year from January 1 to the
Termination Date, (y) is the


 


12





















 


amount which is two times Surratt’s annual base salary
in effect at the time of Termination, and (z) is the percentage which under
each plan is the highest percentage of base salary that Surratt was paid during
any one of the five years immediately preceding the year in which the
Termination Date occurred, but which shall not be greater than the maximum
percentage of base salary that Surratt was eligible to earn during the year in
which the Termination Date occurred assuming all targets were met in full,
whether or not said targets actually were met. 
The payments provided for under this Paragraph 10.E.(ii) will be paid
within thirty days following the Termination Date in cash or in such other form
as bonus amounts generally are paid to eligible employees, or in a combination
thereof, as determined by the Compensation Committee, whose determination and
valuation of any non-cash compensation shall be final and binding, and shall be
considered to be full compensation for all amounts due to Surratt for bonus
plans in which he was participating as of the Termination Date, and he shall
not be entitled to any further payments under any of said plans during the
Severance Period or thereafter. 
Notwithstanding the above, any bonus due to Surratt for years (or any
other applicable bonus period) completed prior to the Termination Date but not
yet paid shall be paid in addition to the bonus described herein. If such bonus
for prior years is in the form of restricted stock, such bonus will be
considered earned to the extent that applicable vesting targets have been met
as of the Termination Date, whether the confirmation that the targets have been
met occurs before or after the Termination Date.  If such targets have been met but the stock
has not yet been distributed, Surratt will be entitled to receive the stock,
or, at the option of the Company, the cash equivalent thereof, no later than
the date the stock was due to be distributed had the termination not
occurred.  Any such stock for which
targets have not been met will be forfeited.


 


(iii)          Stock Options. 
All options to purchase shares of FLYI stock that have been granted to
Surratt and that are not exercisable as of the Termination Date shall terminate
as of said date.  For all options that
are exercisable as of said date (including options that are accelerated
following a Change in Control), the terms of exercise, payment and expiration
shall be as provided in each option agreement.


 


(iv)          Deferred Compensation. 
The Deferred Compensation program will continue throughout the Severance
Period, including Surratt’s accumulation of Years of Service for vesting
purposes, and including the Company’s continuation of contributions; provided,
however, that in no event shall any additional Deferred Compensation accrue
after January 1, 2008. Alternatively, the Company may elect to pay such amounts
to Surratt as would be payable during the Severance Period by the Company under
the Deferred Compensation program in a single lump sum payment within fifteen
(15) days after the Termination Date.  At
the end of the Severance Period (or, earlier, January 1, 2008), the Company
shall pay Surratt an amount equal to his vested interest under the Deferred
Compensation as provided in Paragraph 5.D.(iii), reduced for any interim
payments made pursuant to such Paragraph. 
Notwithstanding the foregoing, the Company shall have a right of set-off
against, and may reduce the amount payable as Deferred Compensation by, any
amount owed or payable by Surratt to the Company.


 


(v)           Insurance Programs. 
In the event Surratt’s employment with the Company is terminated upon or
within twelve months following a Change in Control,


 


13





















 


the Split Dollar Agreement shall continue in full
force and effect through the Severance Period and shall survive separate and
apart from this Agreement, and the Company’s obligation to pay all premiums
pursuant to this Agreement shall continue in accordance with the terms of this
Agreement for the Severance Period; provided, however, that in no event shall
the Company have any obligation to pay any premiums after January 1, 2008.  On the Termination Date (except that for
purposes of this provision, if Surratt’s employment is terminated under the
circumstances set forth in Paragraph 10(C)(i) hereof, then notwithstanding
anything in that provision, the Termination Date for purposes of this Paragraph
shall be the thirtieth (30th) day following the date of receipt of the notice
provided for therein), or, if Surratt’s employment with the Company is
terminated upon or within twelve months following a Change in Control, at the
end of the Severance Period (but in no event later than January 1, 2008),
subject to Paragraph 5.E.(iii).(a), Surratt shall pay to the Company an amount
equal to the total of all premiums paid by the Company on the split dollar
policy(ies) acquired pursuant to Paragraph 5.E., without interest thereon, and
upon receipt of such payment the Company shall release its interest in the
policy, or a portion thereof, on Surratt’s life acquired pursuant to the terms
of the Split Dollar Agreement, or any or all of the paid up additions standing
to the credit of such policy, if any, such that such released interest equals
the total of all premiums paid by the Company on the split dollar policy(ies)
acquired pursuant to Paragraph 5.E. 
Alternatively, if the Company elects to pay the Deferred Compensation to
Surratt within fifteen (15) days after the Termination Date pursuant to
Paragraph 10.E.(iv) above, the Company at the time of such payment may demand
payment from Surratt of an amount equal to the total of all premiums paid by
the Company on the split dollar policy(ies) acquired pursuant to Paragraph
5.E., without interest thereon, and upon receipt of such payment release its
interest in the policy, or portion thereof, acquired pursuant to the terms of
the Split Dollar Agreement, and any or all of the paid up additions standing to
the credit of such policy, if any, and thereafter the Company shall be under no
obligation to pay any further premiums under the Split Dollar Agreement.  Coverage under the Company’s major medical,
accident, health, dental, disability and life insurance plans as from time to
time provided to other executive employees of the Company (and, to the extent
provided by such policies, to Surratt’s dependents) shall continue to be paid
for by the Company during the Severance Period or, in the event of Surratt’s
termination upon or following a Change of Control of the Company as defined in
Paragraph 8.B., for the longer of the Severance Period or the remainder of
Surratt’s and his spouse’s life, and including children to age 21 as per coverage
provided prior to the Change in Control. 
Provided, however, if such coverage cannot be continued during the
Severance Period or until Surratt’s and his spouse’s death, as the case may be,
under the terms of such policies or plans, the Company shall reimburse Surratt
for the cost of comparable coverage under individually obtained policies or for
COBRA coverage, or shall make other arrangements to assure that Surratt has
comparable coverage.


 


(vi)          Vacation. 
Vacation shall not continue to accrue after the Termination Date under
any circumstances.


 


(vii)         Executive Medical Reimbursement
Plan and Investment and Tax Planning.  Throughout the
Severance Period, the Company will continue to promptly reimburse Surratt for
any otherwise unreimbursed health and medical insurance premiums and/or
uncovered medical expenses up to $10,000 per calendar year under a written
medical


 


14





















 


reimbursement plan maintained for the Company’s key
executive employees, and for the $5,000 per year investment and tax planning
service expenses, incurred during each calendar year, including the tax
gross-up, if applicable.


 


(viii)        Travel Benefits. The FLYi, Inc. and its subsidiaries
flight pass privileges currently granted to Surratt will continue for the
Severance Period.  Surratt and his wife
shall be provided with free travel on the Company’s planes or on the planes of
any successor in interest to the Company on a positive space basis, and his
children shall be provided free travel on a space available basis.  Surratt shall not be entitled to travel
benefits on any other airline.


 


(ix)           Deductions for Taxes. Subject to Paragraph 5.G.(v), any
compensation due to Surratt hereunder will be subject to deductions for social
security, federal and state withholding taxes, and any other such taxes as may
from time to time be required by governmental authority.


 


F.             Deferral of
Payments.  Notwithstanding any other provision of
this Agreement to the contrary, all payments pursuant to this Section 10 shall
be deferred until six months after Surratt’s termination of employment to the
extent necessary to avoid the application of the excise tax under Section 409A
of the Code.


 


11.          Nonsolicitation,
Non-Competition, and Confidentiality


 


A.            Nonsolicitation and
Non-Competition.  For so long as Surratt is an employee of the
Company, and continuing thereafter for twelve months following any termination
of Surratt’s employment, or with respect to the provisions of (i), below, for
the longer of such twelve month period or for such period as Surratt is
receiving Severance Compensation, Surratt shall not, without the prior written
consent of the Company, directly or indirectly, as a sole proprietor, member of
a partnership, stockholder or investor, officer or director of a corporation,
or as an employee, associate, consultant or agent of any person, partnership,
corporation or other business organization or entity other than the
Company:  (i) solicit or endeavor to
entice away from the Company or any of its subsidiaries any person or entity
who is, or, during the then most recent 12 month period, was employed by, or
had served as an agent of, the Company or any of its subsidiaries; or (ii)
engage in or contract with others to engage in any business enterprise, line of
work consulting contract, joint venture or other arrangement which conducts a
business or businesses substantially similar to the business conducted by
Company in any area in which Company or any of its affiliates or subsidiaries
provides or plans to provide air transportation to the public.  Surratt acknowledges that the geographic area
covered hereby, and the period and nature of the agreed restrictions are
reasonable and necessary for the protection of the business of the
Company.  All provisions of this
Paragraph concerning non-competition are severable; and while it is the
intention of the parties that all of said provisions shall be enforceable, if
any one of the same shall be held to be unenforceable in whole or in part, the
remainder shall continue to be in full force and effect.  The terms of this Paragraph 11.A will not
apply following any termination of Surratt’s employment that was effected as a
result of, in connection with or within twelve (12) months following a


 


15





















 


Change in Control. 
The provisions of clause (ii) above of this Paragraph 11.A will not
apply following any termination of Surratt’s employment by the Company other
than for cause.  The twelve month period
will be deemed to mean any notice given within twelve months following a Change
in Control regardless of when actual termination occurs following said notice.


 


B.            Confidentiality. 
Surratt covenants and agrees with the Company that he will not at any
time, except in performance of his obligations to the Company hereunder or with
the prior written consent of the Company, directly or indirectly, disclose any
secret or confidential information that he may learn or has learned by reason
of his association with the Company or any of its subsidiaries and
affiliates.  The term “confidential information” includes information not
previously disclosed to the public or to the trade by the Company’s management,
or otherwise in the public domain, with respect to the Company’s or any of its
affiliates’ or subsidiaries’, products, facilities, applications and methods,
trade secrets and other intellectual property, systems, procedures, manuals,
confidential reports, price lists, customer lists, technical information,
financial information (including the revenues, costs or profits associated with
the Company), business plans, prospects or opportunities, but shall exclude any
information which (i) is or becomes available to the public or is
generally known in the industry or industries in which the Company operates
other than as a result of disclosure by Surratt in violation of his agreements
under this Paragraph 11.B or (ii) Surratt is required to disclose under any
applicable laws, regulations or directives of any government agency, tribunal
or authority having jurisdiction in the matter or under subpoena or other
process of law.


 


C.            Exclusive Property. 
Surratt confirms that all confidential information is and shall remain
the exclusive property of the Company. 
All business records, papers and documents kept or made by Surratt
relating to the business of the Company shall be and remain the property of the
Company, except for such papers customarily deemed to be the personal copies of
Surratt.


 


D.            Injunctive Relief. 
Without intending to limit the remedies available to the Company,
Surratt acknowledges that a breach of any of the covenants contained in this
Paragraph 11 may result in material and irreparable injury to the Company or
its affiliates or subsidiaries for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of such a breach or threat thereof, the Company shall be
entitled to seek a temporary restraining order and/or a preliminary or
permanent injunction restraining Surratt from engaging in activities prohibited
by this Paragraph 11 or such other relief as may be required specifically to
enforce any of the covenants in this Paragraph 11.  If for any reason, it is held that the
restrictions under this Paragraph 11 are not reasonable or that consideration
therefor is inadequate, such restrictions shall be interpreted or modified to
include as much of the duration and scope identified in this Paragraph 11 as
will render such restrictions valid and enforceable.


 


12.          Assignment 
This Agreement, as it relates to the employment of Surratt, is a
personal contract and the rights and interests of Surratt hereunder may not be
sold, transferred, assigned, pledged or hypothecated.  However, this Agreement shall inure to the benefit
of and be binding upon Company and its successors and assigns including,
without limitation, any


 


16





















 


corporation or other entity into which Company is
merged or which acquires all or substantially all of the outstanding common
stock or assets of Company.  At any time
prior to a Change in Control, Company may provide, without the prior written
consent of Surratt, that Surratt shall be employed pursuant to this Agreement
by any of its affiliates instead of or in addition to Company, and in such case
all references herein to the “Company” shall
be deemed to include any such entity, provided that such action shall not
relieve Company of its obligation to make or cause an affiliate to make or
provide for any payment to or on behalf of Surratt pursuant to this Agreement.


 


13.          Invalid Provisions 
The invalidity of any one or more of the paragraphs or provisions of
this Agreement shall not affect the reasonable enforceability of the remaining
paragraphs or provisions of this Agreement, all of which are inserted herein
conditionally upon being valid in law; and in the event one or more of the
paragraphs or provisions contained herein shall be invalid, this instrument
shall be construed as if such invalid paragraphs or provisions had not been
inserted or, alternatively, said paragraphs or provisions shall be reasonably
limited to the extent that the applicable court interpreting the provisions of
this Agreement considers to be reasonable.


 


14.          Specific Performance  The parties hereby agree that any violation by
Surratt of the covenants and agreements contained herein shall cause
irreparable damage to the Company, and the Company may, as a matter of course,
enjoin and restrain said violation by Surratt by process issued out of a court
of competent jurisdiction, in addition to any other remedies that said court
may see fit to award.


 


15.          Binding Effect 
All the terms of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective legal representatives,
successors and assigns.


 


16.          Waiver of Breach or Violation Not
Deemed Continuing  The waiver by the Company of any provision of
this Agreement may be effected only by a written waiver duly executed on behalf
of the Company and except to the extent specifically provided in such waiver
shall not operate as, or be construed to be, a waiver of any subsequent breach
hereof.


 


17.          Entire Agreement; Law Governing 
This Agreement supercedes in its entirety the terms of the Severance
Agreement between the parties dated as of December 28, 2001 and any and all
other agreements, either oral or in writing, between the parties hereto with
respect to the subject matter hereof, by and between the Company and Surratt,
and contains all the covenants and agreements among the parties with respect to
such subject matter. Notwithstanding the foregoing, to the extent that the
Company’s Deferred Compensation contributions or any other compensation or
benefit provided for hereunder was paid, granted, credited or funded under and
pursuant to an earlier version of this Agreement with respect to service prior
to the Effective Date and at rates provided for under such earlier version,
then such compensation or benefit need not be again paid, granted or funded, respectively,
pursuant to this Agreement.  This
Agreement shall be construed in accordance with the laws of the Commonwealth of
Virginia, without regard to principles of conflicts of law.  Surratt hereby


 


17





















 


acknowledges that he was given the opportunity to be
represented by counsel of his choosing in the drafting and negotiation of this
Agreement and that he reviewed this Agreement. In interpreting this Agreement,
a court shall not treat either party as the draftsman of the Agreement.


 


18.          Paragraph Headings 
The Paragraph headings contained in this Agreement are for convenience
only and shall in no manner be construed as a part of this Agreement.


 


19.          Release by Surratt 
In the event of a termination of employment by Surratt that results in
the payment of Severance Compensation to him pursuant to the terms of this
Agreement, in consideration for such Severance Compensation and as a condition
precedent to the payment thereof, Surratt hereby agrees to execute a full and
complete release to the Company releasing any and all claims that he may have
against the Company including any claims relating to his termination of
employment.


 


20.          Notices 
All notices permitted or required to be given pursuant to this Agreement
shall be in writing and shall be deemed to have been sufficiently given,
subject to the further provisions of this Paragraph 20, for all purposes when
presented personally to such party (which in the case of notice to the Company,
shall be presented to the person holding the office or offices identified
below) or sent by facsimile transmission, any national overnight delivery
service, or certified or registered mail, to such party at its address set
forth below:


 


If to Surratt, to the
most recent address indicated for Surratt’s residence in the personnel records
of Company, unless Surratt gives written notice that such notices are to be
delivered to another address.


 


If to FLYi or IA:


 


FLYi, Inc.


Independence Air, Inc.


45200 Business Court


Dulles, VA  20166


Attention:  General
Counsel or Corporate Secretary


Fax No. (703) 650-6294


 


Such notice shall be
deemed to be given and received when delivered if delivered personally, upon
electronic or other confirmation of receipt if delivered by facsimile
transmission, the next business day after the date sent if sent by a national
overnight delivery service, or five (5) business days after the date mailed if
mailed in the continental United States by certified or registered mail.  Any notice of any change in such address
shall also be given in the manner set forth above.  Whenever the giving of notice is required,
the giving of such notice may be waived in writing by the party entitled to
receive such notice.


 


18





















 


In Witness
Whereof, the Company has hereunto caused this Agreement to be
executed by a duly authorized officer and Surratt has hereunto set his hand as
of the day and year written below, with such Agreement to be effective as of
the Effective Date set forth herein.


 


 


	
  WITNESS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Richard J. Surratt

  	
   

  
	
   

  	
   

  	
  Dated: 

  	
  December      , 2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMPANY:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  FLYi, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
   

  	
   

  	
   

  
	
  Richard J. Kennedy,

  	
   

  	
  Caroline M. Devine,

  	
   

  
	
  Secretary

  	
   

  	
   

  	
  Chairman of the
  Compensation

  	
   

  
	
   

  	
   

  	
  Committee of the Board
  of Directors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  INDEPENDENCE AIR

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
   

  	
   

  	
   

  
	
  Richard J. Kennedy,

  	
   

  	
  Caroline M. Devine,

  	
   

  
	
  Secretary

  	
   

  	
   

  	
  Chairman of the
  Compensation

  	
   

  
	
   

  	
   

  	
  Committee of the Board
  of Directors

  	
   

  
									



 





















 


Attachment A


Stock Options
Surrendered and Cancelled on March 15, 2005


 


	
  Date of

  Grant

  	
   

  	
  Number 

  of

  Shares

  	
   

  	
  Strike

  Price

  	
   

  
	
  10/25/2000

  	
   

  	
  50,000

  	
   

  	
  16.37

  	
   

  
	
  9/18/2001

  	
   

  	
  122,021

  	
   

  	
  13.95

  	
   

  
	
  6/26/2000

  	
   

  	
  22,500

  	
   

  	
  13.37

  	
   

  
	
  11/30/1999

  	
   

  	
  52,500

  	
   

  	
  10.00

  	
   

  
	
  6/2/2003

  	
   

  	
  129,000

  	
   

  	
  9.47