EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of July 19, 2000, (the "Agreement") among
Atlantic Express Transportation Group Inc., a New York corporation ("Group"),
Atlantic Express Transportation Corp., a New York corporation (the "Company"),
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, the Executive is presently employed by the Company, a wholly
owned subsidiary of Group, under an amended and restated employment agreement
dated as of November 4, 1998, (the "Prior Agreement");
WHEREAS, the Executive has had a prominent role in the development of
the business and goodwill of Group and the Company and has established relations
and contacts with principal customers and suppliers of Group and the Company;
WHEREAS, the Executive possesses valuable knowledge and skills that
will contribute to the successful operation of the Company's business following
the Transaction; and
WHEREAS, the Company desires to secure the continued services of the
Executive, and the Executive desires to continue in the employment of the
Company following the expiration of the employment term under the Prior
Agreement and, in connection therewith, the Company, Group and the Executive
desire to enter into an employment 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, 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, and in such
capacities the Executive agrees to serve the Company faithfully and to the best
of his ability under the direction of the Board. The Executive also agrees to
serve, if elected, at no compensation in addition to that provided for in this
Agreement, in the position of director of the Company or officer or director of
Group and of any subsidiary of Group or the Company during the Employment Term.
1.2 Exclusive Services. For so long as the Executive is employed by the
Company, he shall devote his full-time working hours to his duties hereunder.
The Executive shall not directly or indirectly, render services to any other
person or organization for which he receives compensation without the unanimous
consent of the Board of Directors of the Company (the "Board") or otherwise
engage in activities which would interfere significantly with his faithful
performance of his duties hereunder.
1.3 Term of Employment. The Executive's employment under this Agreement
shall commence on November 4, 2000 (the "Effective Date") and shall terminate on
the earliest of (i) the first anniversary of the Effective Date, (ii) the death
of the Executive or (iii) the termination of the Executive's employment pursuant
to this Agreement; provided, however, that the term of the Executive's
employment under this Agreement may be extended on the terms hereof for a period
of up to one year by notice of approval from the Board to the Executive at least
60 days prior to the expiration of the then effective Employment Term (the
period during which the Executive is employed pursuant to this Agreement,
including any extension thereof in accordance with this Section 1.3, shall be
referred to as the "Employment Term").
2. SALARY
2.1 Base Salary. From the Effective Date, the Executive shall be
entitled to receive a base salary ("Base Salary") at a rate of $240,000 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 Annual Increases. Commencing one year from the Effective Date, and
annually on each anniversary thereafter, the Executive's base salary shall be
increased by the same percentage by which the regional consumer price index as
of the June immediately preceding such anniversary date shall have increased
over such consumer price index as of June of the prior year; provided, however,
that in no event shall such annual increase be more than five percent (5%) nor
less than three percent (3%) of such base salary. Regional consumer price index
shall mean the index as determined by the United States Department of Labor for
the New York, New York - Northeastern New Jersey area based upon the index for
all urban consumers.
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 to other senior
executives of the Company;
(b) an automobile allowance of $250 per month plus a company car (as
approved by the Board);
(c) a life insurance premium allowance of $2,500 payable annually in
February of each year of the term hereof,
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(d) a travel allowance not to exceed $15,000 annually; and
(e) bonus at an annual rate not less than $2,500 as determined by the
Board.
3.2 Vacation. The Executive shall be entitled to 20 days' paid vacation
each year in accordance with the applicable policies of the Company.
3.3 Reimbursement of Expenses. The Company 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 Company practices
consistently applied.
3.4 Non-Renewal of Agreement. Subject to Section 4.1.1, in the event
this Agreement is not renewed by the Company following the expiration of the
initial term as provided in Section 1.3, the Executive shall be entitled to
twelve months of his Base Salary as severance, payable in equal installments on
the same terms as at the end of the Employment Term (such severance, "NonRenewal
Severance Pay").
4. TERMINATION OF EMPLOYMENT
4.1 Termination for Causes: Termination Without Cause:
Termination Permanent-Disability- Resignation
4.1.1 General. (a) If, prior to the expiration of the Employment Term,
the Executive's employment is terminated by the Company for Cause, the Executive
shall be entitled only to (i) his accrued but unpaid Base Salary through and
including the date of termination ("Accrued Base Salary"), and (ii) six months
of his Base Salary as severance, payable in equal installments on the same terms
as at the end of the Employment Term, unless such termination is for a
Disloyalty Termination Event, in which case the Executive shall be entitled only
to payment of his Accrued Base Salary.
(b) If, prior to the expiration of the Employment Term, the Executive
is terminated by the Company Without Cause, the Executive shall be entitled only
to (i) his Accrued Base Salary, and (ii)(1) his Base Salary from the day after
the termination date through the normal expiration date of the Employment Term
(but in no event for less than a six-month period), payable in equal
installments on the same terms as at the end of the Employment Term and the
benefits set forth under Section 3.1 of this Agreement during such period, as
severance, and (2) in the event of a termination by the Company Without Cause
prior to the first anniversary of the Effective Date, the Non-Renewal Severance
Pay as severance, payable in equal installments on the same terms as at the end
of the Employment Term, any severance payable pursuant to clause (ii) (2) to be
paid, in installments, commencing immediately after the payment of severance
pursuant to clause (ii) (1).
(c) If, prior to the expiration of the Employment Tenn, the Executive's
employment is terminated by the Company for Permanent Disability (as defined in
Section 5), the Executive shall
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be entitled only to the payments and benefits provided for in Section 5 hereof.
(d) If the Executive resigns from his employment hereunder, the
Executive shall be entitled only to payment of his Accrued Base Salary.
(e) Except as otherwise provided herein, the Executive shall have no
further right to receive any other compensation, or to participate in any other
plan, arrangement, or benefit, after any termination or resignation of
employment, subject to the terms of such plans or arrangements.
(f) Notwithstanding anything to the contrary herein, the Company may
elect, in its sole discretion, to pay any remaining installments of severance or
other payments hereunder in a lump sum rather than in installments over time.
4.1.2 Date of Termination/Resignation. The date of termination for a
termination by the Company for Cause shall be the date of the written notice of
termination provided for in Section 4.1.3. The date of termination for a
Termination Without Cause shall be as provided in Section 4.1.4. The date of
termination for a termination for Permanent Disability shall be as provided in
Section 5. The date of resignation shall be the date specified in the written
notice of resignation from the Executive to the Company, or if no date is
specified therein, 10 business days after receipt by the Company of written
notice of resignation from the Executive.
4.1.3 Notice of Termination for Cause. Termination of the Executive's
employment by the Company for Cause shall be effected by delivery of a written
notice of termination from the Company to the Executive, which notice shall
specify the event or events set forth in Section 4.2 giving rise to such
termination.
4.1.4 Notice of Termination Without Cause. Termination of the
Executive's employment for a Termination Without Cause shall be effected by
written notice of termination from the Company to the Executive, specifying a
termination date no earlier than 10 business days after the date on which such
notice is given.
4.2 Termination for Cause. Termination for "Cause" shall mean
termination by the Company of the Executive's employment because the Executive
(a) has engaged in fraudulent or criminal conduct in connection with the
performance of his duties hereunder, which conduct materially and adversely
affects Group, the Company or any of their respective affiliates (a "Conduct
Termination Event"), (b) admits to, has been convicted of or has entered into a
plea of nolo contendere to a crime punishable by imprisonment for more than one
year (a "Felony Termination Event"), (c) has failed to perform in all material
respects (following a written warning specifying such deficiency) the normal and
customary duties required of his position of employment (a "Performance
Termination Event"), (d) has been disloyal to Group, the Company or any of their
respective affiliates by assisting competitors of Group, the Company or any of
their respective affiliates to the disadvantage of Group, the Company or any of
their respective affiliates by a breach of Section 6 or by otherwise actively
assisting competitors to the disadvantage of Group, the Company or any of their
respective affiliates (a "Disloyalty Termination Event"), or (g) has been
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identified by the Board of Education of the City of New York in a notice to
Group, the Company or any of their respective affiliates (a "BOE notice") that
the Board of Education has elected either not to extend an existing
transportation contract or that it will not accept bids from Group, the Company
or any of their respective affiliates for a new transportation contract unless
the employment of the Executive is terminated together with divestiture of the
Executive's stock ownership in Group (a "BOE Termination Event").
4.3 Termination Without Cause. "Termination Without Cause" shall mean
any termination by the Company of the Executive's employment at any time during
the Employment Term for any reason other than Cause, death or Permanent
Disability.
5. PERMANENT DISABILITY
If, prior to the expiration of the Employment Term, the Executive shall
fail because of illness, physical or mental disability or other incapacity, for
a period of six consecutive months, or for shorter periods aggregating six
months during any twelve-month period, to render the services provided for by
this Agreement, then the Company may, by written notice to the Executive after
the last day of the six consecutive months of disability or the day on which the
shorter periods of disability equal an aggregate of six months, terminate the
Executive's employment for "Permanent Disability", specifying a termination date
no earlier than 10 business days after the date on which such notice is given.
The determination of the Executive's Permanent Disability shall be made by an
independent physician who is reasonably acceptable to the Executive and the
Company and shall be final and binding and shall be based on such competent
medical evidence as shall be presented to it by the Executive or by any
physician or group of physicians or other competent medical experts employed by
the Executive and/or the Company to advise such independent physician.
In the event of a termination of the Executive's employment by the
Company for Permanent Disability, the Executive shall be entitled only to (i)
his Accrued Base Salary, (1i) six months of his Base Salary as severance,
payable in equal installments on the same terms as at the end of the Employment
Term and (iii) receive the benefits set forth under Section 3.1 of this
Agreement during the six-month severance period. Except as otherwise provided in
this Section 5, following the effective date of a termination for Permanent
Disability, the Company shall have no further obligation to the Executive under
this Agreement.
6. NONCOMPETITION/NONSOLICITATION AND CONFIDENTIALITY
6.1 Noncompetition/Nonsolicitation. The Executive shall not, 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: (a) engage in, or acquire an
interest in any entity or enterprise which engages in, any business that is in
competition with any business actively conducted by Group, the Company or any of
their respective subsidiaries within (i) the counties then served by Group, the
Company or their respective subsidiaries as well as adjacent counties, and (ii)
any other counties in which Group, the Company or their respective subsidiaries
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has made a bid within 24 months prior to the Executive's termination and any
adjacent counties in which Group, the Company or their respective subsidiaries
conducts business; (b) solicit or endeavor to entice away from Group, the
Company or any of their respective subsidiaries any person who is, or was during
the then most recent 24-month period, employed by or associated with Group, the
Company or any of their respective subsidiaries; or solicit or endeavor to
entice away from Group, the Company or any of their respective subsidiaries, or
otherwise interfere with the business relationship of Group, the Company or any
of their respective subsidiaries with, any person or entity who is, or was
within the then most recent 24-month period, a customer, client or prospect of
Group, the Company or any of their respective subsidiaries. The obligations of
this Section 6.1 shall apply for 24 months after termination of employment of
the Executive as well as during employment and shall be extended by a period of
time equal to any period during which the Executive shall be in breach of such
obligations.
6.2 Confidentiality. The Executive 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 Group, the Company or
any of their respective subsidiaries and affiliates. The term "confidential
information" includes information not previously disclosed to the public or to
the trade by the Company's or Group's management, or otherwise in the public
domain, with respect to the Company's or Group's, or any of their respective
affiliates' or subsidiaries', products, services, facilities, applications and
methods, trade secrets and other intellectual property, systems, procedures,
manuals, confidential reports, product or service price lists, customer lists,
technical information, financial information (including the revenues, costs or
profits associated with any of the Company's or Group's products), business
plans, prospects or opportunities.
6.3 Exclusive Property. The Executive confirms that all confidential
information is and shall remain the exclusive property of Group and the Company.
All business records, papers and documents kept or made by the Executive
relating to the business of Group, the Company or their respective subsidiaries
shall be and remain the property of Group and the Company.
6.4 Injunctive Relief. Without intending to limit the remedies
available to Group and the Company, the Executive acknowledges that a breach of
any of the covenants contained in this Section 6 may result in material and
irreparable injury to Group, the Company or their respective 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, Group and the Company shall be entitled to
obtain a temporary restraining order and/or a preliminary or permanent
injunction restraining the Executive from engaging in activities prohibited by
this Section 6 or such other relief as may be required specifically to enforce
any of the covenants in this Section 6. If for any reason a final decision of
any court determines that the restrictions under this Section 6 are not
reasonable or that consideration therefor is inadequate, such restrictions shall
be interpreted, modified or rewritten by such court to include as much of the
duration and scope identified in this Section 6 as will render such restrictions
valid and enforceable.
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7. MISCELLANEOUS
7.1 Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
To the Company or Group, to it at:
Atlantic Express Transportation Corp.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
with a copy to each of:
GSCP II Holdings (AE), LLC
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
To the Executive:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Any such notice or communication shall be sent certified or registered
mail, return receipt requested, or by telefax, addressed as above (or to such
other address as such party may designate in writing from time to time), and the
actual date of receipt shall determine the time at which notice was given.
7.2 Severability. If a court of competent jurisdiction determines that
any term or provision hereof is invalid or unenforceable, (a) the remaining
terms and provisions hereof shall be unimpaired and (b) such court shall have
the authority to replace such invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.
7.3 Assignment. This Agreement shall inure to the benefit of the heirs
and representatives of the Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Executive. Each of Group and the
Company may assign this Agreement without prior written approval of the
Executive upon the transfer of all or substantially all of its business and/or
assets (whether by purchase, merger, consolidation or otherwise), provided that
the successor to such business and/or assets shall expressly assume and agree to
perform this Agreement.
7.4 Entire Agreement: Amendment. This Agreement represents the entire
agreement of the parties with respect to the subject matter hereof and shall
supersede any and all previous contracts, arrangements or understandings between
or among Group, the Company and the Executive, regarding the subject matter
hereof. The Agreement may be amended at any time by mutual written agreement of
the parties hereto.
7.5 Withholding. The Company shall be entitled to withhold, or cause to
be withheld, from payment any amount of withholding taxes required by law with
respect to payments made to the Executive in connection with his employment
hereunder.
7.6 Governing Law. This Agreement shall be construed, interpreted, and
governed in accordance with the laws of the State of New York without reference
to principles of conflict of laws.
7.7 Survival. Sections 3.4 (relating to non-renewal), 4.1.1 (relating
to early termination), 5 (relating to Permanent Disability), 6 (relating to
noncompetition, nonsolicitation and confidentiality) and 7.6 (relating to
governing law) shall survive the termination hereof, whether such termination
shall be by expiration of the Employment Term or an early termination pursuant
to Sections 4 or 5 hereof.
7.8 Headings. Headings to sections in this Agreement are for the
convenience of the parties only and are not intended to be a part of or to
affect the meaning or interpretation hereof.
7.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the Company and Group have caused this Agreement to
be duly executed by their authorized representatives and the Executive has
hereunto set his hand, in each case effective as of the day and year first above
written.
ATLANTIC EXPRESS
TRANSPORTATION GROUP INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATLANTIC EXPRESS
TRANSPORTATION CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: ▇▇▇▇▇▇▇ ▇▇▇▇▇
EXECUTIVE:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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