Exhibit
10.2


 


FOURTH AMENDED AND RESTATED


EMPLOYMENT
AGREEMENT


 


AMENDED AND RESTATED
EMPLOYMENT AGREEMENT dated as of November 25, 2003 (the “Agreement”) among
Atlantic Express Transportation Group Inc., a New York corporation (“Group”),
Atlantic Express Transportation Corp., a New York corporation (the “Company”),
and Domenic Gatto (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 March 25, 2003 (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
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, 2004, the Company in its sole discretion may
limit the Executive’s services to the position of President;  and


 

















 


(ii) commencing
December 31, 2005, 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 30, 2005, 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, 2006, 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, 2006, (ii) the death of the Executive or
(iii) the termination of the Executive’s employment pursuant to this Agreement
(the “Employment Term”).


 


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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 $530,527 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, 2006, the Base Salary shall be
reduced to 50% of the Base Salary payable to the Executive as of
December 31, 2005.


 


2.2.  Increase in Base Salary. On
November 4, 2004 and on November 4, 2005, 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   Emergence Bonus.   (a) Upon the effective date (“Effective
Date”) of the Company’s plan of reorganization (either in its current form or
as the same may be amended after the date hereof), the Company will be
obligated to pay the Executive a bonus (the “Emergence Bonus”) in the amount of
$350,000 of which $175,000 shall be paid immediately following the Effective
Date and of which $175,000 shall be paid 60 days after the Effective Date.


 


2.4                                 Exit
Bonus.  (a) Upon the occurrence of a
Change of Control at any time after the Effective Date and 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 1.5% of all
issued and outstanding shares of the Company’s common


 


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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 pursuant to Section 4.1.1(a),(c),(d) or (e) prior
to December 1, 2004, the amount of the Exit Bonus shall equal 33.3% of the
Base Amount.  In the event of such a
termination after December 1, 2004 and prior to December 1, 2005, the
amount of the Exit Bonus shall equal 66.6% of 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 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.


 


2.5                                 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; (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


 


4

















 


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)  Effective Date shall have the same
meaning as set forth in the Company’s Plan of Reorganization; and 


 


(c)                                  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.


 


2.6                                 Performance  Bonus.   The Company will
pay the Executive a performance bonus (“Performance Bonus”) subject to the
acceptance by the Company of an agreement with the Department of Education of
the City of New York (the “Company Acceptance”) to provide school bus
transportation services for the period commencing July 1, 2005.  The Performance Bonus shall be in the amount
of $250,000 provided, in the event the projected EBITDA of the Company for
fiscal year 2006 (i.e., for the 12 months ended June 30, 2006) as
determined by the Company immediately following, and taking into account the
Company Acceptance,  shall be  greater than $50,000,000, the Performance
Bonus shall be increased by an additional $25,000 for each $1,000,000 (or part
thereof) in excess of $50,000,000, subject to a maximum Performance Bonus of
$500,000.  The Performance Bonus shall
be payable on the latter of (i) the Company Acceptance; or (ii) March 15,
2005.


 


3.  EMPLOYEE BENEFITS


 


3.1. General Benefits.
The Executive shall receive the following benefits during the Employment Term:


 


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(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) 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, 2005. 
At the option of the Executive and in the place of the disability
policy, the Company shall 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, 2005;


 


(d)  an annual life insurance premium allowance
of $35,000, which shall be reduced to $17,500 commencing December 31,
2005, payable in two installments in June and February of each year
of the Employment Term hereof;


 


(e) through
December 31, 2005, continued use of the same Company car and driver which
the Executive is using as of the date of this Agreement; and


 


(f)  participation in any executive incentive
plan which might be implemented by the Board during the Employment Term.


 


3.2. Vacation. The
Executive shall be entitled to 25 days paid vacation each calendar year in
accordance with the applicable policies of the Company.


 


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4. TERMINATION
OF EMPLOYMENT


 


4.1.  Termination for Cause; Termination
Without Cause; Termination for 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) the Exit Bonus payable in
accordance with Section 2.4; and (iii) 
the Emergence Bonus payable in accordance with Section 2.3; and
(iv) in the event such termination occurs after February 15, 2005, or
after the Company Acceptance (whichever shall first occur),  the Executive shall be entitled to the
Performance Bonus  payable in accordance
with Section 2.6; and (v) his Base Salary for the six month period
following such termination, or through the normal expiration date of the
Employment Term, whichever shall be less, provided that, if such
termination is for a Disloyalty Termination Event, the Executive shall have no
right to receive, and the Company shall have no obligation to pay such Base
Salary.


 


(b)  If, prior to the expiration of the
Employment Term, the Executive is terminated by the Company Without Cause or
the Executive terminates employment for Good Reason, the Executive shall be
entitled only to (i) his Accrued Base Salary; and (ii) as and for severance (1)
his Base Salary from the day after the termination date through the normal
expiration date of the Employment Term, payable in a lump sum upon termination,
and the benefits set forth under Section 3.1 of this Agreement during such
period; (2) his Emergence Bonus payable in accordance with Section 2.3
and  his Performance Bonus payable in
accordance with Section 2.4.


 


(c)  If, prior to the expiration of the
Employment Term, the Executive’s employment is terminated by the Company for
Permanent Disability (as defined in Section 5), the Executive shall be


 


7

















 


entitled only to the
payments and benefits as provided for in Section 4.1.1(a)(ii) and (iii)
and in Section 5 hereof.


 


(d)  If the Executive resigns from his employment
hereunder without Good Reason,  the
Executive shall be entitled only to payment of his Accrued Base Salary, if any,
payable in a lump sum not later than 30 days following the date of termination.


 


(e)  In the event of termination hereunder as a
result of death of the Executive, the Executive’s estate shall be entitled to
the compensation provided for in Section 4.1.1(a).


 


(f)  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.


 


(g) In the event of the
termination of the Executive’s employment by the Company for any reason, the
Company or Group shall, within 30 days of such termination of employment, (x)
obtain releases that release the Executive from any guarantees made by the
Executive in respect of obligations of Group, the Company or any of their
respective subsidiaries (the “Guarantees”), if any such Guarantees are then in
effect, or (y) provide letters of credit to the Executive in respect thereof,
if any such Guarantees are then in effect.


 


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 4.1.1. 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.


 


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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) 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, (b) 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 (c) 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 (a “Disloyalty 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.


 


9

















 


4.4. Termination by
Executive for “Good Reason”. In the event of: (i) a material reduction in
the nature or scope of Executive’s position as President and Chief Executive
Officer or his authorities, powers, duties, or responsibilities in such
capacity, provided that the Company in its sole discretion may limit the
Executive’s services as provided herein, commencing December 31, 2004; or
(ii) a material breach by the Company of its affirmative or negative covenants
or undertakings hereunder and such breach shall not be 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); then the Executive
may at any time by notice terminate Executive’s employment hereunder for “Good
Reason”.


 


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.


 


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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, (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, 2005) as severance, payable in equal installments on the same
terms as in effect as at the end of the Employment Term, and (iii) receive the
benefits set forth under Section 3.1 of this Agreement during the
twelve-month severance period. Any payments provided for in this Section 5
shall be reduced to the extent that such payments, together with any disability
payments received by the Executive under any plan, program or arrangements
including without limitation any payment to the employee under Section 3.1(b)
exceed the Executive’s Base Salary; provided that if disability payments are
received which are free of federal income tax, the payments provided for in
this Section 5 shall be reduced by an amount equal to the pre-tax income
which would have been required to produce such payment free of tax based on the
marginal tax rate for the previous tax year of the Executive. Except as
otherwise provided in this Section 5, following the date of termination
for Permanent Disability, the Company shall have no further obligation to the
Executive under this Agreement. Notwithstanding anything to the contrary
herein, the Company may elect, in its sole discretion, to pay any remaining
installments of severance, bonus or other payments hereunder in a single lump
sum rather than in installments over time.


 


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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 has made a bid within 36 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 36-month period, employed by
or associated with Group, the Company or any of their respective subsidiaries,
or (c) 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 36-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 18 months, or a period of 24 months if, as of termination of the employment
of the Executive, more than a majority of the Common Stock of Group is then
owned by the current shareholders of Group, 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.


 


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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


 


13

















 


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.


 


7.    GUARANTEES


 


7.1. Indemnification.
In addition to any right to indemnification as provided in the By Laws or
Certificate of Incorporation of the Group and/or Company, Group, the Company
and each of their subsidiaries, jointly and severally, shall indemnify the
Executive and his spouse, heirs, estate, executors and administrators
(collectively, the “Indemnitees”) and hold such Indemnitees harmless from and
against, and pay and reimburse the Indemnitees for, any and all demands,
payments, claims, actions, losses, damages, liabilities, obligations, fines,
taxes, deficiencies, costs and expenses (including reasonable attorneys’ fees),
whether or not resulting from third-party claims, including interest and
penalties with respect thereto, asserted against or incurred or sustained by an
Indemnitee in connection with or arising out of any personal guaranty or
undertaking by the Executive of any obligation of Group, the Company or any of
their subsidiaries (collectively a “Guaranty”).


 


7.2.                              Future
Subsidiaries. In the event, Group, the Company or any of their subsidiaries
acquires or forms a subsidiary after the date hereof, Group and the Company
shall cause such newly acquired or formed subsidiary to execute and deliver a
supplement to this Amendment, which supplement shall provide that such newly
acquired or formed subsidiary will indemnify the Indemnitees in accordance with
Section 7.1 hereof.


 


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7.3. Compensation.
Group, the Company and each of their subsidiaries shall jointly pay to the
Executive additional compensation hereunder in consideration of any Guaranty
made by the Executive provided, Greenwich Street Capital Partners Inc.
or its affiliates (“Greenwich”) is compensated for any such similar commitment,
guaranty or undertaking. Such additional compensation shall be based upon the
rate of compensation paid by Group, the Company and/or their subsidiaries to
Greenwich for any such similar commitment, guaranty or undertaking by them of
such obligation of Group, the Company and/or their subsidiaries.


 


9.    MISCELLANEOUS


 


9.1. 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.


7 North Street


Staten Island, NY 10302


Attention: Corporate
Secretary


 


with a copy to each of:


 


GSCP III Holdings (AE),
LLC


c/o Greenwich Street
Capital Partners, Inc.


388 Greenwich Street, 36th
Floor


New York, NY 10013


Fax: (212) 816-0166


Attention: Sanjay Patel


 


To the Executive:


 


Domenic Gatto


136 Monmouth Road


Monmouth Township, NJ
08831


Fax: (732) 251-5519


 


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with a copy to:


 


Silverman Sclar Shin
& Byrne P.C.


381 Park Avenue South,
Suite 1601


New York, NY 10016


Fax: (212) 779-8858


Attention: Peter R.
Silverman


 


Any such notice or
communication shall be sent certified or registered mail, return receipt
requested, or by facsimile, 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.


 


9.2. 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.


 


9.3. 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.


 


9.4. 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


 


16

















 


Executive, including the
Prior Agreement. The Agreement may be amended at any time by mutual written
agreement of the parties hereto.


 


9.5. 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.


 


9.6. 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.


 


9.7. Survival.
Sections 3.4 (relating to non-renewal), Article 4 (relating to early
termination), 5 (relating to Permanent Disability), 6 (relating to
noncompetition, nonsolicitation and confidentiality) and 8.6 (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.


 


9.8. 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.


 


9.9. 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.


 


[signature page
follows]


 


17

















 


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/ SANJAY PATEL

  	
   

  
	
   

  	
   

  	
  Name:  Sanjay Patel

  
	
   

  	
   

  	
  Title:  Chairman of the Board of Directors

  
	
   

  	
   

  
	
   

  	
  ATLANTIC EXPRESS

  
	
   

  	
  TRANSPORTATION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SANJAY PATEL

  	
   

  
	
   

  	
   

  	
  Name:  Sanjay Patel

  
	
   

  	
   

  	
  Title:  Chairman of the Board of Directors

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  /s/ DOMENIC GATTO

  	
   

  
	
   

  	
  Domenic Gatto

  



 


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