Exhibit 10.1


 


Atlantic Express Transportation
Group Inc.


Atlantic Express Transportation
Corp.


7 North Street


Staten Island, NY  10302


 


As of April 1, 2006


 


Domenic Gatto


136 Monmouth Road


Monroe Township, NJ 08831


 


Dear Domenic:


 


Reference is made to your Fourth Amended and
Restated Employment Agreement dated as of November 25, 2003, as amended by
the letter dated April 20, 2004, by the letter dated January 13, 2005
and by the letter dated March 2, 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.
The Company hereby employs the Executive, and the Executive agrees to serve, as
President and Chief Executive Officer of the Company and upon the Board of
Directors of the Company (the “Board”) as Vice Chairman of the Board, upon the
terms and conditions herein contained during the Employment Term provided that (i) commencing
December 31, 2007, the Company in its sole discretion may limit the
Executive’s services to the position of President;  and (ii) commencing December 31,
2007, the Executive shall continue his employment in the position of an officer
of the Company, which position shall be designated by the Board. 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 shall serve
as a member of the Board of Directors of Group during the Employment Term. During
the Employment Term, the Executive also agrees to serve, if elected, at no
compensation in addition to that provided for in this Agreement, in the
position of officer of Group and of any subsidiary of Group or the Company. As
long as the Executive remains either President or Chief Executive Officer, the
Executive shall continue to occupy the same corner office which he has occupied
during the Term of the Prior Agreement.


 


1.2. Exclusive
Services. From the Commencement Date through December 31, 2007, 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 for which he receives compensation without the unanimous consent
of the


 

















 


Board or otherwise engage in activities which
would interfere significantly with his faithful performance of his duties
hereunder. Notwithstanding the foregoing, the Executive may serve as a
managing member of G Entertainment, LLC. and a managing member of Eagle Oaks
Golf Club, LLC, provided that such services shall not interfere with the
performance of Executive’s duties hereunder. For the period commencing January 1,
2008, the Executive shall be required to devote so much of his time to his
duties hereunder as shall be proportionate to the reduction in his compensation
for such period.


 


1.3. Term
of Employment. The Executive’s employment under this Agreement shall
commence as of the date hereof (the “Commencement Date”) and shall terminate on
the earliest of (i) December 31, 2008, (ii) the death of the
Executive or (iii) the termination of the Executive’s employment pursuant
to this Agreement (the “Employment Term”).


 


2.                                       Section 2.1
of the Agreement is hereby amended and restated in its entirety to read as
follows:


 


2.1. Base
Salary. From the Commencement Date, the Executive shall be entitled to
receive a base salary (“Base Salary”) at a rate of $574,914.48 per annum,
payable in arrears 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. Notwithstanding the foregoing, for the period
commencing January 1, 2008, the Base Salary shall be reduced to 50% of the
Base Salary payable to the Executive as of December 31, 2007.


 


3.                                       Section 2.2
of the Agreement is hereby amended and restated in its entirety to read as
follows:


 


2.2. Increase
in Base Salary. On November 1, 2006, on November 1, 2007 and on November 1,
2008, 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.


 


4.                                       Paragraphs (b) through
(e) of Section 3.1 of the Agreement is hereby amended and restated in
their entirety to read as follows:


 


(b) a
disability insurance policy providing $15,000 in monthly benefits commencing
six months after a disability which prevents the Executive from performing the
ordinary and necessary functions and duties of his employment; provided that
the premium therefor shall not exceed the usual and customary rates charged by
underwriters for such a policy for a person of the Executive’s age in good
health. The amount of such policy shall be reduced to $7,500 commencing December 31,
2007. At the option of the Executive and in the place of the disability policy,
the Company shall


 


2

















 


pay the cash equivalent of the premium for
such policy to the Executive to be used by the Executive to pay such premium;


 


(c) an
automobile allowance of $2,150 per month, which shall be reduced to $1,075 per
month commencing December 31, 2007;


 


(d)  an
annual life insurance premium allowance of $35,000, which shall be reduced to
$17,500 commencing December 31, 2007, payable in two installments in June and
February of each year of the Employment Term hereof;


 


(e) through
December 31, 2007, continued use of the same Company car and driver which
the Executive is using as of the date of this Agreement; and


 


5.                                       Clause (ii) of
the first sentence of the second paragraph of Section 5 is hereby amended
and restated in their entirety to read as follows:


 


(ii) six
months of his Base Salary as severance, payable in equal installments on the
same terms as in effect as at the end of the Employment Term, followed by an
additional six months of his Base Salary less $15,000 per month (less
$7,500 per month in the period commencing December 31, 2007) as severance,
payable in equal installments on the same terms as in effect as at the end of
the Employment Term


 


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/ Domenic Gatto

  	
   

  	
   

  
	
  Domenic Gatto

  	
   

  
					



 


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