Exhibit 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of September 2, 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 Neil J. Abitabilo (the " Executive" ).
WHEREAS, the Company desires to employ the Executive as its Director of Finance and in such other capacities as the Company and the Executive may agree from time to time.
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 Director of Finance of the Company, upon the terms and conditions herein contained during the Employment Term, and in such capacity the Executive agrees to serve the Company faithfully and to the best of his ability. During the Employment Term, the Executive also agrees to serve, if requested by the Company, at no compensation in addition to that provided for in this Agreement, in the position of Director of Finance of Group and as an officer of the Company or Group and of any subsidiary of Group or the Company.
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 or otherwise engage in activities which would interfere with his faithful performance of his duties hereunder. Notwithstanding the foregoing, the Executive may serve as a member of board of directors of and may provide consultation services for third parties, provided, that such services shall not interfere with the performance of Executive' s duties hereunder and further , provided , that such third parties do not engage in any business in competition with any business conducted by Group, the Company or their respective subsidiaries.
1.3. Term of Employment . The Executive' s employment under this Agreement shall commence as of the date hereof (the " Effective Date" ) and shall continue at the will of the Company. The Company shall have the right to terminate the employment of the Executive at any time with or without cause or reason. Such period of Executive' s employment under this Agreement shall be referred to herein as the " Employment Term."
2. SALARY
2.1. Base Salary . (a) From the Effective Date, the Executive shall be
entitled to receive a base salary (" Base Salary" ) at a rate of $225,000 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.
(b) Commencing January 1, 2004, the Base Salary shall be increased to $250,000 per annum.
(c) Commencing May 1, 2004, the Base Salary shall be increased to $275,000 per annum.
(d) Commencing September 1, 2004, the Base Salary shall be increased to $300,000 per annum.
(e) Notwithstanding anything set forth in this Section 2.1 which may be to the contrary, in the event that prior to September 1, 2004, the Executive shall be appointed as Chief Financial Officer of the Company or Group, the Base Salary shall be increased as of the date of such appointment to $300,000 per annum, and in such event Subsections (b), (c) or (d) as the case may be shall be of no further force or effect.
(f) Commencing November 1, 2005 and each anniversary date thereof during the Employment Term, the Base Salary shall be increased by a percentage which shall equal 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 immediately preceding 12-month period, provided , such annual increase pursuant to this subparagraph (f) shall not be less than 3% and not greater than 5%.
2.2 Deferred Compensation Plan . The Executive shall be entitled to participate in the Company' s senior executive deferred compensation plan whereby the Executive will receive deferred compensation after the end of each calendar year of the Company, providing the Executive remains an employee of the Company through the end of such calendar year, in an amount equal to five (5%) percent of the Base Salary paid to the Executive during the prior calendar year.
2.3 Bonus . The Executive shall be entitled participate in a senior bonus pool established for senior executives of the Company, other than the Chief Executive Officer of the Company, the amount of which participation shall be determined and shall be subject to the sole and exclusive determination of the Company.
3. EMPLOYEE BENEFITS
3.1. General Benefits . The Executive shall receive the following benefits during the Employment Term:
(a) the Executive, his spouse and minor children will be eligible to participate in benefit and health insurance programs of the Company consistent with those benefit programs
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provided from time to time to other senior executives of the Company;
(b) an automobile allowance of $500 per month commencing September 1, 2003, which allowance shall be increased to $750 per month commencing February 1, 2004 and thereafter increased to $1,000 per month commencing February 1, 2005;
(c) a life insurance policy for term life insurance in the amount of $100,000 provided in accordance with the Company' s benefit plan for its senior executives and any disability insurance benefits which the Company may provide in any future plan adopted for its senior executives.
3.2. Vacation . The Executive shall be entitled to (a) 10 days paid vacation for the fiscal year ending June 2004; (b) 15 days paid vacation for each of the fiscal years ending June 30, 2005 and June 30, 2006; and (c) thereafter 20 days paid vacation for each fiscal year thereafter 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 (including but not limited to expenses relating to telephone, cellular phone, computer access during travel, facsimile, parking, hotel accommodations, meals and/or air fare) upon presentation by the Executive of an itemized account of such expenditures in accordance with the Company practices consistently applied.
4. TERMINATION OF EMPLOYMENT
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