Exhibit 10.4


 


ATLANTIC EXPRESS TRANSPORTATION GROUP INC.

ATLANTIC EXPRESS TRANSPORTATION CORP.

7 North Street

Staten Island, New York 10302


 


As of April 1, 2006


 


Mr. Nathan Schlenker

357 Horning Road

Palaline Bridge, NY 13428


 


Dear Nat:


 


Reference is made to your Fourth Amended and Restated Employment
Agreement, dated as of October 25, 2004, as amended by the letter dated March
1, 2005 (as amended, the “Agreement”).


 


By this letter agreement, in consideration of the mutual agreements and
covenants contained herein, we hereby agree to amend the Agreement as follows:


 


1.             Section 1 of the
Agreement is hereby amended and restated in its entirety to read as follows:


 


1. EMPLOYMENT AND DUTIES


 


1.1. General. Commencing as of April15, 2006 (the “Effective
Date”), the Company shall employ the Executive, and the Executive agrees to
serve, as Chief Financial Officer of the Company, upon the terms and conditions
herein contained during the 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 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 “Term” of Executive’s
employment under this Agreement shall commence as of the Effective Date and
shall terminate on December 31, 2007.


 

















 


2.             Section 2 of the
Agreement is hereby amended and restated in its entirety to read as follows:


 


2. SALARY


 


2.1. Base Salary. During the Term, the
Executive shall be entitled to receive a base salary (“Base Salary”) at
a rate equal to $335,833.68 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, 2006, 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.


 


3.             The Agreement is hereby amended by
adding new Sections 2.3 and 2.4 as follows:


 


2.3 Exit Bonus. (a) Upon the
occurrence of a Change of Control at any time prior to December 31, 2010, 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 such number
of shares of common stock of the Company which, following the issuance of such
shares, would equal 0.5% of all issued and outstanding shares of the Company’s
common stock immediately following the Effective Date (the “Base Amount”). Except
as otherwise provided herein, the Exit Bonus shall be payable in the same form
of consideration as received by the shareholders of either Group or the Company
upon such Change of Control. In the event the Executive’s employment is
terminated (i) by the Company for Cause, (ii) by the Company for Permanent
Disability, (iii) by the Executive without Good Reason or (iv) as a result of
the death of the Executive, prior to December 1, 2006, the amount of the Exit
Bonus shall equal 33.3% of the Base Amount. In the event of such a termination
after December 1, 2006 and prior to December 1, 2007, the amount of the Exit
Bonus shall equal 66.6% of the Base Amount. In the event the Executive’s
employment is terminated by the Company Without Cause or the Executive terminates
employment for Good Reason, the amount of the Exit Bonus shall be equal to the
Base Amount.


 


(b)     In the event a Change of Control has not
occurred prior to December 31, 2010, the Company shall pay the Executive the
Exit Bonus in cash on January 1, 2011.


 


(c)     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


 


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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.


 


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; (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 GSCP II Holdings (AE), LLC or any of its
affiliates, of beneficial ownership, directly or indirectly, of more than 50%
of the aggregate ordinary voting power of Group or the Company; or (iv) the
failure of GSCP II Holdings (AE), LLC and its affiliates to own and control,
directly or indirectly, at least 50% of the aggregate ordinary voting power of
Group;


 


(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 if no
specific value is specified in such transaction, the value of the Company’s
common stock as reasonably determined by the Board, in either case without
control premiums or minority discounts.


 


(c)     Termination for “Cause” shall mean
termination by the Company of the Executive’s employment because the Executive
(i) admits to, has been convicted of or has entered into a plea of nolo contendere to a crime punishable by imprisonment for
more that one year, (ii) 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, or (iii) has been
disloyal to Group, the Company or any of their respective affiliates by
assisting transportation 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 such competitors to the disadvantage of Group, the Company or any of
their respective affiliates.


 


(d)     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.


 


(e)     Termination by Executive for “Good
Reason” shall mean termination by the Executive because of (i) a material
reduction in the nature or scope of Executive’s position as Chief Financial
Officer or his authorities, powers, duties, or responsibilities in such
capacity; or (ii) a material breach by the Company of its affirmative or
negative covenants or undertakings hereunder and such breach shall not be


 


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remedied within fifteen (15) days after notice to Company thereof
(which notice shall be signed by Executive and refer to a specific breach of
this Agreement).


 


(f)      Disability shall mean the failure
of the Executive 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. 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.


 


All other terms of your employment contract remain in full force and
effect without any change or modification thereto.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Atlantic Express Transportation Group Inc.

  
	
   

  	
  Atlantic Express Transportation Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Peter Frank

  	
   

  
	
   

  	
  Peter Frank

  
	
   

  	
   

  
	
  Agreed and accepted:

  	
   

  
	
   

  	
   

  
	
  /s/ Nathan Schlenker

  	
   

  	
   

  
	
  Nathan Schlenker

  	
   

  
					



 


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