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Exhibit 10.2 SIXTH AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
SIXTH AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of
December 16, 2008 (the “Agreement”) among Atlantic
Express Transportation Group Inc., a New York corporation
(“Group”), Atlantic Express Transportation Corp., a New
York corporation (the “Company”), and Nathan Schlenker
(the “Executive”).
WHEREAS, the Executive is presently employed by the Company, a
wholly owned subsidiary of Group, under the Fifth Amended and
Restated Employment Agreement dated as of April 18, 2007, as
amended (the “Prior Agreement”);
WHEREAS, in order to comply with Section 409A of the Internal
Revenue Code of 1986, as amended, and the Department of Treasury
Regulations and other interpretive guidance promulgated thereunder
(collectively, “Section 409A”), the Company, Group and
the Executive desire to amend and restate the terms and provisions
of the Prior Agreement to, among other things, set forth the terms
of the Executive’s continued employment.
NOW, THEREFORE, in consideration of the foregoing and the
respective covenants and agreements hereinafter set forth and for
other good and valuable consideration, the Company, Group and the
Executive hereby agree to amend and restate the Prior Agreement in
its entirety, as follows:
1. EMPLOYMENT AND DUTIES
1.1. General. The Company hereby employs the Executive, and the
Executive agrees to serve, as Chief Financial Officer of the
Company, upon the terms and conditions herein contained during the
Employment Term (as defined below), and in such capacity the
Executive agrees to serve the Company faithfully and to the best of
his ability under the direction of the Board of Directors (the
“Board”).
1.2. Exclusive Services. During the Employment Term, the Executive
shall devote his full-time working hours to his duties hereunder
and shall not, directly or indirectly, render services to any other
person or organization or otherwise engage in activities which
would interfere significantly with his faithful performance of his
duties hereunder without the consent of the Board, provided,
however, the Executive may work one day a week from his home office
in Palaline Bridge, New York.
1.3. Term of Employment. The “Employment Term” of
Executive’s employment under this Agreement shall commence as
of the date hereof (the “Commencement Date”) and shall
terminate on December 31, 2008, subject to renewal in accordance
with Section 1.4.
1.4. Renewal of Employment Term. Unless the
Company has provided the Executive with a written notice at least
sixty days prior to December 31, 2008 of its intent not to extend
the Employment Term (the “Termination Notice”), the
Employment Term shall be renewed and extended automatically for a
further period of one year on January 1, 2009, and such extended
term shall thereafter be further extended for successive one year
periods unless a Termination Notice is given to the Executive at
least sixty days prior to the next successive December 31.
1.5 Consulting
Services. Upon expiration and non-renewal of the
Employment Term, the Company shall retain the Executive for a
period of six months (the “Consulting Term”) as a
consultant. During the Consulting Term, the Executive
shall provide such consulting services, at such times as may be
reasonably be requested by the Company; provided, that the
Executive may do so primarily through telephone contact with the
Company and shall not be required to travel from his residence to
perform such services or to provide services in excess of 10 hours
per month. During the Consulting Term, the Executive
shall be entitled to six months of his Base Salary (the
“Consulting Compensation”), payable monthly on or about
the 15th day of each month in equal installments in accordance with
the Company’s payroll practices as in effect at the end of
the Employment Term. The Company shall not have any
obligation to retain the Executive as a consultant if the
Executive’s employment is terminated (i) by the Company for
Cause, or (ii) by the Executive without Good Reason. In
the event of termination of the Executive’s employment or of
the Consulting Term due to death of the Executive, the
Executive’s estate shall be entitled to receive any unpaid
portion of the Consulting Compensation payable in a lump sum upon
such termination.
2. SALARY
2.1. Base Salary. From the Commencement Date, the Executive shall
be entitled to receive a base salary (“Base Salary”) at
a rate of $345,909 per annum, payable monthly on or about the 15th
day of each month in equal installments in accordance with the
Company’s payroll practices, with such increases as may be
provided in accordance with the terms hereof. Once increased, such
higher amount shall constitute the Executive’s annual Base
Salary.
2.2 Increase in Base Salary. On November 1 of
each year during the Employment Term, the Executive’s Base
Salary shall be increased by a percentage which shall equal the
greater of 3% or the percentage increase in the consumer price
index for the New York-Northern New Jersey-Long Island, NY-NJ-CT
metropolitan area, as reported by the United States Department of
Labor, for the 12-month period ended the immediately preceding
October 31.
2.3 Exit Bonus. (a) Upon the occurrence of a
Change of Control at any time during or after the termination of
the Executive’s employment, the Company shall pay to the
Executive a bonus (“Exit Bonus”) which shall
be equal to the Fair Market Value (as of the date of such Change of
Control) of 0.5% of all of the Company’s outstanding common
stock (on a fully diluted basis) immediately preceding such Change
of Control (such percentage being referred to herein as the
“Base Amount”); provided, the Base Amount shall be
increased to 1.0% in the event that the transaction resulting in
the Change of Control is based upon an aggregate Fair Market Value
of all of the Company’s outstanding common stock (on a fully
diluted basis) equal to or in excess of $50,000,000 and 1.5% in the
event such Fair Market Value is equal to or exceeds $70,000,000;
further, provided, the Exit Bonus to be paid to the Executive upon
a Change of Control shall be reduced by an amount equal to (i) the
Fair Market Value of all of the Company’s outstanding common
stock as of the date of such Change of Control, multiplied by (ii)
a fraction, the numerator of which shall be the aggregate number of
Group Common Shares (as defined below) sold, transferred or
otherwise disposed of by GSC Group (as defined below) prior to such
Change of Control and the denominator of which shall be 107,593,
multiplied by (iii) the applicable Base Amount as determined in
accordance with this Section 2.3(a) as of the date of such Change
of Control. Except as provided in Section 2.3(b), the
Exit Bonus shall be payable in the same form of consideration and
at the same time as received by the shareholders of either Group or
the Company upon such Change of Control. 2
(b) In the event the Company or Group during the
Employment Term and prior to a Change of Control, shall adopt a
stock option or restricted stock purchase or similar plan, the
Executive within thirty (30) days following written notice of the
adoption of such a plan, shall have the right, by delivery of
written notice to the Company, to participate in such plan and to
receive such number of shares or options, in substitution and in
place of the Exit Bonus, as would be equivalent to the Base Amount
as of the date of such participation in such plan by the Executive,
provided that any such plan shall require that the timing of
payments under such plan shall match the timing of the Exit Bonus
payments that otherwise would have occurred, or shall contain such
other or additional provisions as shall cause payments under the
plan and this Section 2.3 to satisfy Section 409A.
(c) (i) Subject to paragraph (ii), in the event prior to
the occurrence of a Change of Control, GSCP II Holdings (AE), LLC
or any of its affiliates (collectively, the “GSC
Group”) sells, transfers or otherwise disposes of any of the
shares (the “Group Common Shares”) of common stock of
Group it beneficially owns as of the date hereof and excluding any
shares of common stock of Group the GSC Group may acquire after the
date hereof (a “Disposition Event”), the Executive
shall be entitled to a portion of his Exit Bonus equal to (A) the
Fair Market Value of all of the Company’s outstanding common
(on a fully diluted basis) as of the date of such Disposition
Event, multiplied by (B) a fraction, the numerator of which shall
be the number of Group Common Shares sold, transferred or otherwise
disposed of in such transaction and the denominator of which shall
be 107,593, multiplied by (C) the applicable Base Amount as
determined in accordance with Section 2.3(a) as of the date of such
Disposition Event. Except as provided in Section 2.3(b) and
paragraph (ii), the portion of the Exit Bonus payable upon a
Disposition Event shall be payable in the same form of
consideration and at the same time as received by the GSC Group
upon such Disposition Event.
(ii) Subject to the Executive’s election to substitute the
Exit Bonus as set forth in Section 2.3(b), the payment described in
paragraph (i) shall be made in a lump sum in the same form of
consideration as received, as applicable, by the GSC Group or by
the shareholders of either Group or the Company (A) upon the
closing of the Disposition Event if (x) such closing occurs within
ten years of the date hereof and (y) such payment would be a
“short-term” deferral within the meaning of Treas. Reg.
Sec. 1.409A-1(b)(4), or otherwise (B) upon the happening of the
next following Change in Control; provided that if it is not
possible to pay such Exit Bonus in such same form, such Exit Bonus
shall be paid in a cash lump sum. 3
2.4 Definitions. (a)
Change of Control shall mean (i) the transfer (in one transaction
or a series of transactions) of all or substantially all of the
assets of Group or the Company to any person or group (as such term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)); (ii) the liquidation
or dissolution of Group or the Company or the adoption
of a plan by the stockholders of Group or the Company relating to
the dissolution or liquidation of either Group or the Company; or
(iii) the acquisition by any person or group (as such term is used
in Section 13(d)(3) of the Exchange Act), except for by the GSCP
Group of beneficial ownership, directly or indirectly, of more than
50% of the aggregate ordinary voting power of Group or the
Company;
(b) Fair Market Value of the Company’s common
stock shall mean the value of the Company’s common stock as
specified in accordance with any transaction resulting in a Change
of Control or Disposition Event, as the case may be, or if no
specific value is specified in such transaction, the value of the
Company’s common stock as reasonably determined by the Board
(provided, in the event the Executive disagrees with the value
determined by the Board, as determined by a nationally recognized
independent investment banking or accounting firm reasonably
acceptable to the Company and the Executive), in either case
without control premiums or minority discounts.
3. EMPLOYEE BENEFITS
3.1. General Benefits. The Executive shall receive the following
benefits during the Employment Term:
(a) the Executive will be eligible to participate in benefit
programs of the Company consistent with those benefit programs
provided from time to time to other senior executives of the
Company;
(b) an
annual life insurance premium allowance of $2,500 payable annually
in February of each year;
(c) an
automobile allowance of $250 per month and the exclusive use of a
company car;
(d) a
travel allowance not to exceed $15,000 annually, which is paid on
or before the 15th day of the third month of the calendar year
following the calendar year to which such allowance relates;
and
(e) participation
in any executive incentive plan which might be implemented by the
Board during the Employment Term.
3.2. Vacation. During the Employment Term, the Executive shall be
entitled to 20 days paid vacation each year in accordance with the
applicable policies of the Company. 4
3.3. Reimbursement of
Expenses. The Company, subject to Section
9.2(e), will reimburse the Executive for reasonable, ordinary and
necessary business expenses incurred by him in the fulfillment of
his duties hereunder upon presentation by the Executive of an
itemized account of such expenditures in accordance with the
Company practices consistently applied.
3.4. Consulting Term Benefits. Subject to Section
9.2(b), during the Consulting Term, the Company shall provide,
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