AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
AMENDED
AND RESTATED
This
Amended and Restated Executive Employment Agreement (this "Agreement") is
entered into as of February 8, 2008 by and between Xxxxxx X. Xxxxxxx Xx., a
natural person ("Executive"), and Aftermarket Technology Corp., a Delaware
corporation (“ATC”). As used herein, the “Company” refers to ATC
and/or any subsidiary of ATC. The parties hereto agree as
follows:
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the
severance amount will equal 300% of the sum of such annual base salary and
target bonus. Subject to Section 11, the severance shall be paid
in equal installments on each of the Company’s regular payroll dates during the
two-year period following the Termination Date, unless the Termination Date
occurs within 18 months after a Change in Control, in which case the severance
will be paid in a single lump sum within ten business days after the Termination
Date. The Company will pay up to $25,000 of the cost of an
executive level individualized career transition program through a professional
outplacement firm mutually selected by the Company and the Executive if such
program is initiated within 30 days after the Termination Date. If
Executive dies after the Termination Date, the payment or payments due
thereafter under this Section 5(f) shall be made to Executive’s estate but
the career transition benefits shall terminate as of the date of
death. As a condition to receiving the payments and benefits provided
by this Section 5(f) (other than payment for all accrued salary through the
Termination Date and the Earned Benefits, which shall be payable in any case),
Executive shall execute and deliver to the Company on the Termination Date a
general release in the form attached hereto as Exhibit A.
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(i) In
the case of termination pursuant to Section 5(a) or Company termination
without Cause, such restricted stock and unvested options will continue to vest
after the Termination Date according to their vesting schedules notwithstanding
the fact that Executive has ceased to be an employee of the
Company.
(ii) In
the case of Executive’s death, such restricted stock and unvested options shall
fully vest as of the Termination Date.
(iii) In
the case of voluntary resignation, such restricted stock and unvested options
will terminate on the Termination Date unless the Board determines that
Executive has provided prior to the termination of Executive’s employment all
services and cooperation required by the Board to transition Executive’s
position to a successor (regardless of whether an orderly transition has
actually occurred), in which case such restricted stock and unvested options
will continue to vest after the Termination Date according to their vesting
schedules notwithstanding the fact that Executive has ceased to be an employee
of the Company.
(iv) In
the case of termination for Cause, restricted stock and unvested options will
terminate on the Termination Date.
(v) Except
in the case of termination for Cause, options that are vested as of the
Termination Date or subsequently vest pursuant to this Section 5(i) shall
remain in effect and be exercisable until the tenth anniversary of the date of
grant.
(i) "Cause" means the occurrence
or existence of any of the following with respect to Executive, as determined by
the Company in its sole discretion:
(A) a
material breach by Executive of (x) his duty not to engage in any
transaction that represents, directly or indirectly, self-dealing with the
Company or any of its affiliates that has not been approved by the Company, or
(y) the terms of this Agreement, if in any such case such material breach
remains uncured after the lapse of 30 days following the date that the Company
has given Executive written notice thereof;
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(B) the
material breach by Executive of any duty referred to in clause (A) above as to
which at least one written notice has been given pursuant to clause
(A);
(C) any
act of dishonesty, misappropriation, embezzlement, intentional fraud or similar
conduct involving the Company or any of its affiliates;
(D) the
conviction or the plea of nolo contendere or the equivalent in respect of a
felony involving moral turpitude;
(E) any
intentional damage of a material nature to any property of the Company or any of
its affiliates; or
(F) the
repeated non-prescription use of any controlled substance or the repeated use of
alcohol or any other non-controlled substance that, in the reasonable
determination of the Company renders Executive unfit to serve in his capacity as
an employee of the Company or its affiliates.
(ii) “Change in Control” means the
first to occur of the following:
(A) any
sale or transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Company, on a consolidated basis, in one
transaction or a series of related transactions, unless, immediately after
giving effect to such transaction, at least 85% of the total voting power
normally entitled to vote in the election of directors, managers or trustees, as
applicable, of the transferee is “beneficially owned” by persons who,
immediately prior to the transaction, beneficially owned 100% of the total
voting power normally entitled to vote in the election of directors of the
Company;
(B) any
Person or Group is or becomes the "beneficial owner," directly or indirectly, of
more than 35% of the total voting power in the aggregate of all classes of
capital stock of the Company then outstanding normally entitled to vote in
elections of directors;
(C) during
any period of 12 consecutive months, individuals who at the beginning of such
12-month period constituted the Company’s Board of Directors (together with any
new directors whose election by such Board or whose nomination for election by
the shareholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Company’s Board
of Directors then in office; or
(D) a
reorganization, merger or consolidation of the Company the consummation of which
results in the outstanding securities of any class of the Company’s capital
stock being exchanged for or converted into cash, property and/or a different
kind of securities, unless, immediately after giving effect to such
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transaction,
at least 85% of the total voting power normally entitled to vote in the election
of directors, managers or trustees, as applicable, of the entity surviving or
resulting from such reorganization, merger or consolidation is “beneficially
owned” by persons who, immediately prior to the transaction, beneficially owned
100% of the total voting power normally entitled to vote in the election of
directors of the Company.
(iii) “Earned Benefits” means any
(A) bonus that is payable to Executive pursuant to the terms of
(x) any annual Incentive Compensation Plan for a year ended prior to the
Termination Date that has not been paid prior to the Termination Date and
(y) the annual Incentive Compensation Plan for any subsequent years in the
case of a termination pursuant to Section 5(a) if the Termination Date
occurs on or before the last day of such annual Incentive Plan,
(B) vacation time that has accrued and not been used as of the Termination
Date, (C) other entitlements to cash payments that have accrued and not
been paid as of the Termination Date, and (D) any deferred compensation earned
by Executive prior to termination. Notwithstanding other provisions
of this Agreement regarding the timing of payment of Earned Benefits,
(x) any annual Incentive Compensation Plan bonus will not be paid until the
completion of audited consolidated financial statements for the year to which
such Incentive Compensation Plan relates, and (y) deferred compensation
will be paid as provided in the Company’s deferred compensation
plan.
(iv) “LTIP Payment” means the
amount, if any, that would have been payable to Executive under the cash award
component of any Long-Term Incentive Plan if he had remained employed by the
Company through December 31 of the last year of such Plan multiplied by a
fraction (A) the numerator of which is the number of days starting
January 1 of the first year of such Long-Term Incentive Plan (e.g.,
January 31, 2006 in the case of the 2006-2008 Long-Term Incentive Plan)
through the Termination Date and (B) the denominator of which is the number
of days in such Long-Term Incentive Plan (e.g., 1,095 in the case of the
2006-2008 Long-Term Incentive Plan).
(v) “Person” and “Group” have the meanings
used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended, whether or not such sections apply to the transaction in
question.
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exclusive
property of the Company or such affiliate and shall not be removed from the
premises of the Company or its affiliate under any circumstances whatsoever
without the prior written consent of the Company, except when (and only for the
period) necessary to carry out Executive's duties hereunder, and if removed
shall be immediately returned upon any termination of his employment and no
copies thereof shall be kept by Executive.
(a) If
the aggregate of all “parachute payments” (as such term is used under Code
Section 280G) exceeds 300% of the “base amount” (as such term is used under Code
Section 280G), then the Company shall pay to Executive a tax gross-up payment so
that after payment by or on behalf of Executive of all federal, state and local
excise,
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income,
employment, Medicare and any other taxes (including any related penalties and
interest) resulting from the payment of the parachute payments and the tax
gross-up payments to Executive by the Company, Executive retains on an after-tax
basis an amount equal to the amount that Executive would have retained if
Executive had not been subject to the Parachute Excise Tax; provided, however,
that the Company’s maximum tax gross-up payment under this Section 10 shall
not exceed $5,000,000.
(b) The
computation of the excess parachute payment in accordance with Code Section 280G
shall be done by a nationally recognized and reputable independent accounting or
valuation firm selected and paid for by the Company.
(c) Executive
shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of any tax
gross-up payments. Such notification shall be given as soon as
practicable but no later than ten (10) business days after Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be
paid. Executive shall not pay such claim prior to the expiration of
the thirty (30)-day period following the date on which Executive gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies Executive in writing prior to the expiration of such period that it
desires to contest such claim, Executive shall:
(i) give
the Company any information reasonably requested by the Company relating to such
claim,
(ii) take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate
with the Company in good faith in order effectively to contest such claim,
and
(iv) permit
the Company to participate in any proceedings relating to such
claim;
provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold Executive harmless, on an after-tax basis,
for any excise tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 10, the Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute
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such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay such
claim and xxx for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any excise tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a gross-up payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If,
after the receipt by Executive of an amount advanced by the Company pursuant to
this Section 10, Executive becomes entitled to receive any refund with respect
to such claim, Executive shall (subject to the Company’s complying with the
requirements of this Section 10) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to this Section 10, a determination is made
that Executive shall not be entitled to any refund with respect to such claim
and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of gross-up payment required to be paid.
(a) If
payment or provision of any amount or other benefit that is “deferred
compensation” subject to Section 409A of the Code at the time otherwise
specified in this Agreement or elsewhere would subject such amount or benefit to
additional tax pursuant to Section 409A(a)(1)(B) of the Code, and if payment or
provision thereof at a later date would avoid any such additional tax, then the
payment or provision thereof shall be postponed to the earliest date on which
such amount or benefit can be paid or provided without incurring any such
additional tax. In the event this Section 11 requires a deferral of
any payment, such payment shall be accumulated and paid in a single lump sum on
such earliest date without interest.
(b) If
any payment or benefit permitted or required under this Agreement, or otherwise,
is reasonably determined by either party to be subject for any reason to a
material risk of additional tax pursuant to Section 409A(a)(1)(B) of the Code,
including when final regulations are issued thereunder, then the parties shall
negotiate in good faith on appropriate provisions to avoid such risk without
materially changing the economic value of this Agreement to either
party.
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To the
Company:
0000 Xxxx
Xxxxx, Xxxxx 000
Xxxxxxx
Xxxxx, XX 00000
Attention: General
Counsel
Facsimile: (000)
000-0000
To
Executive:
Xxxxxx X.
Xxxxxxx Xx.
0000
Xxxxx Xxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
With a
copy to
Xxxxxxx
X. Rock
Xxxxxxxxxx,
Rock, Xxxx & Xxxxxxx LLP
0000
Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000-0000
Facsimile: (000)
000-0000
or to
such other address or to the attention of such other person as the recipient
party will have specified by prior written notice to the sending
party.
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(h) Governing Law and
Venue. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws (without reference to choice or
conflict of laws) of the State of Illinois. The parties to this
Agreement hereby irrevocably consent to the exclusive venue and jurisdiction of
the state and federal courts sitting in the State of Illinois for any matter or
controversy concerning either the existence or enforcement of this Agreement and
hereby waive any contention that Illinois is an improper or inconvenient
forum.
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/s/
Xxxxxx X. Xxxxxxx, Xx.
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Xxxxxx
X. Xxxxxxx Xx.
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| AFTERMARKET TECHNOLOGY CORP. | ||
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By:
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/s/ Xxxxxx
Xxxxxxxxxxxx
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Xxxxxx
Xxxxxxxxxxxx
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Vice
President
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GENERAL
RELEASE
THIS
GENERAL RELEASE is entered into by the undersigned (“Employee”) as of the date
appearing next to Employee’s signature hereto.
WHEREAS,
Employee’s employment with Aftermarket Technology Corp. and/or one of its
subsidiaries (Aftermarket and its subsidiaries being referred to collectively as
the “Company”) is being terminated and the Company will provide Employee with
certain benefits upon the termination of employment provided that, among other
things, Employee executes and delivers this General Release;
(a) releases
and discharges the Company and its officers, directors, employees, benefit plan
administrators and trustees, and agents (collectively, the “Released Parties”)
from any and all claims, liabilities, demands and causes of action, whether
known or unknown, fixed or contingent, that Employee may have or claim to have
against any of the Released Parties relating to, or arising out of, Employee’s
employment with the Company or the termination thereof, and
(b) covenants
not to initiate or participate in (except pursuant to a lawful subpoena) any
lawsuit or other legal proceeding asserting any such claims, liabilities,
demands or causes of action.
This
General Release shall be broadly construed to include, but not be limited to,
all claims under any federal, state, or local laws, statutes, regulations, or
ordinances (including those prohibiting employment discrimination, such as the
federal Age Discrimination in Employment Act), and all claims in contract or
tort including, but not limited to, claims for breach of contract, negligence,
defamation, and wrongful or retaliatory discharge. This General
Release does not include any claim Employee may have (i) based upon facts
occurring after the date that Employee executes this General Release or (ii)
relating to benefits or payments to which Employee is entitled after the
Termination Date (as defined in that certain Executive Employment Agreement
dated as of January ___, 2007 between Employee
and the Company) pursuant to the Executive Employment Agreement.
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Executed:
______________________ , 20___
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EMPLOYEE:
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[NAME]
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