ABX performs services for DHL Network Operations (USA), Inc. pursuant to an ACMI Service Agreement (the "ACMI agreement") and for DHL Express (USA), Inc. pursuant to a Hub and Line-Haul Services Agreement (the "Hub Services agreement"), both dated August 15, 2003. DPWN Holdings (USA), Inc. is the parent of DHL Network Operations (USA), Inc. and DHL Express (USA), Inc., which entities may hereinafter collectively be referred to as "DHL", and guarantees the obligations of its subsidiaries under their respective agreements with ABX. The ACMI and Hub Services agreements accounted for approximately 73% of ATSG's revenues during the first six months of 2008.   

On May 28, 2008, DHL announced plans to restructure its U.S operations by terminating through June 30, 2009, the services of 55 DC-9 aircraft that ABX is operating on behalf of DHL under the ACMI agreement. DHL further announced that it was negotiating an agreement with United Parcel Service, Inc. ("UPS"), pursuant to which it would transfer to UPS no later than by the end of 2009, substantially all of the remaining services that ABX is performing for DHL under the ACMI and Hub Services agreements. ATSG estimates that approximately 6,000 employees working in Wilmington, Ohio will lose their jobs as a result of the restructuring plan, in the event it is fully implemented.

Under the Agreement, DHL will pay to or reimburse ABX for certain costs incurred in providing severance, retention and other benefits to certain employees performing services under the ACMI and Hub Services agreements whose employment is terminated as a result of DHL's implementation of its U.S. restructuring plan. The severance plan benefits include salary continuation and the provision of health insurance COBRA benefits for a defined period based on the number of years the employee has worked for ABX.

DHL will also reimburse ABX for retention benefits paid to certain of ABX's employees that continue working for ABX until their employment is terminated in conjunction with the transition of the services to UPS. The retention benefits are contingent upon DHL consummating an agreement with UPS and will be paid in a lump sum in conjunction with the termination of employment.

DHL will also reimburse ABX for the costs incurred in paying a productivity bonus to certain employees at the end of each month that such employees meet certain attendance goals.

While not provided for under ABX's collective bargaining agreement with its pilots' union, the Agreement also calls upon DHL to reimburse ABX for the costs incurred, as may be agreed by DHL, in establishing a plan for its pilots, subject to and contingent upon the agreement of ABX and its pilots' union with respect to the terms thereof, to address issues arising from DHL's implementation of its U.S. restructuring plan.

In addition to the foregoing severance, retention and productivity benefits, DHL will reimburse ABX for the costs incurred in providing transition services, such as career counseling and job placement services, to certain ABX employees whose employment is terminated as a result of DHL's restructuring plan.