Exhibit 10.2
EXECUTION
FIFTH AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
FIFTH AMENDED AND RESTATED
EMPLOYMENT AGREEMENT dated as of April 18, 2007 (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 Fourth Amended and Restated Employment Agreement dated as of
October 25, 2004, as amended (the “ Prior Agreement
”);
WHEREAS, the Company desires to
secure the continued services of the Executive, and the Executive
desires to continue in the employment of the Company and, in
connection therewith, 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 such
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 on the same terms 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 Annual Bonus . (a) The
Executive shall be paid a bonus (an “ Annual Bonus
”) equal to 15% of his Base Salary for each fiscal year
during the Employment Term, commencing with the fiscal year ending
June 30, 2008, in which the Company’s consolidated actual
Adjusted EBITDA exceeds by 10% or more the Company’s
consolidated Adjusted EBITDA projected by management (which
projection has been accepted by the Board) for such fiscal year;
provided , in the event the actual Adjusted EBITDA exceeds
the projected Adjusted EBITDA by 15% or more, the Annual Bonus
amount shall equal 25% of the Base Salary. In the event, the
Executive’s employment is terminated for any reason after
June 30, 2007, other than by the
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Executive without Good Reason or by
the Company for Cause, in addition to any accrued but unpaid Annual
Bonus, the Executive shall be entitled to a pro rata portion of the
Annual Bonus, if any, for the fiscal year in which such termination
occurs, in an amount equal to the Annual Bonus which would have
been applicable as determined following the end of such fiscal
year, multiplied by a fraction, the numerator of which shall be the
number of days elapsed during such fiscal year through the date of
such termination and denominator of which shall be 365 days. The
Annual Bonus shall be paid on or before 105 days following the end
of the applicable fiscal year.
(b) “ Adjusted EBITDA
” shall mean operating income, (i) plus depreciation and
amortization, (ii) less the amount by which the actual Capital
Expenditure relating to the projected EBITDA exceeds Capital
Expenditures projected by management (which has been accepted by
the Board) for the applicable fiscal year, and (iii) excluding any
extraordinary or nonrecurring expenses or gains.
(c) “ Capital
Expenditure ” shall mean expenditures for fixed or
capital assets or improvements or replacements thereof, which have
a useful life of more than one year, whether financed by cash,
capital leases, purchase money mortgages or other incurrence of
debt.
2.4 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 2.4(a) as of the date of such Change of Control. Except as
provided in Section 2.4(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.
(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.
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(c) 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 (i) 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 (ii) 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 (iii) the
applicable Base Amount as determined in accordance with Section
2.4(a) as of the date of such Disposition Event. Except as provided
in Section 2.4(b), 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.
2.5 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
