exv10w8



 



September 12, 2003



Exhibit 10.8



Mr. Charlie Dickson

67 Woodridge Drive

New Canaan, CT 06840


Dear Charlie:


Welcome to the United Components family. All of us at United Components and
Carlyle are enthusiastic about your joining our team and look forward to
working with you.


Detailed below is a summary of the mutually agreed upon terms of your
employment. Although you are being hired as Chief Financial Officer of United
Components, Inc. (“UCI”), you shall be employed by Champion Laboratories, Inc
(“Champion”). For purposes of this agreement, as the context requires herein,
UCI and any of its direct or indirect subsidiaries, including but not limited
to Champion, individually or collectively, shall be referred to in this
Agreement as the “Company.”



	 	 	 
	Employment Term	 	
The initial term of employment under
this agreement (the “Initial Term”)
shall be for the period beginning on
the September 2, 2003, (the
“Effective Date”) and ending on the
third anniversary thereof, unless
earlier terminated as provided
herein. The employment term shall
automatically be extended for
successive one-year periods
(“Extension Terms” and, collectively
with the Initial Term, the “Term”)
unless you or the Company give
notice of non-extension to the other
party no later than 90 days prior to
the expiration of the
then-applicable Term.
	 	 	 
	Position and Duties	 	
You shall serve as Chief Financial
Officer of the Company and shall
have the authorities duties and
responsibilities customarily
commensurate with such position and
such additional customary
responsibilities, duties and
authority as may from time to time
be reasonably assigned to you by the
Board. You shall report to me and
will be subject to my oversight and
direction. You shall devote
substantially all your working time
and efforts to the business and
affairs of the Company and agree to
observe and comply with the
Company’s rules and policies as
adopted by the Company from time to
time.
	 	 	 
	 	 	
As of the Effective Date, Carlyle
shall cause you to be appointed or
elected to the Board of Directors of
United Components, Inc.






 







 



	 	 	 	 	 
	 	 	 	 	(the
“Board”). During the Term, the
Board shall propose you for
re-election to the Board.
	 	 	 	 	 
	Compensation	 	
•
	 	Base Salary. You shall receive a
base salary at a rate of $300,000
per annum, which shall be paid in
accordance with the customary
payroll practices of the Company,
subject to any increase as
determined by the Compensation
Committee of the Board in its sole
discretion (the “Annual Base
Salary”)
	 	 	 	 	 
	 	 	
•
	 	Bonus. During the Term, you will
be eligible to participate in an
annual performance-based bonus plan
established by the Compensation
Committee at a target level of
$150,000 (“Target Level”), and a
maximum of $450,000. Such bonus
shall be payable at such time as
bonuses are paid to other senior
executive officers who participate
therein. Notwithstanding the
foregoing, with respect to each of
the Company’s fiscal years that ends
during the Term, the amount of your
annual bonus payable pursuant to
such plan shall be determined by the
parameters established by the
Compensation Committee. With
respect to the fiscal year ending
December 31, 2003, you shall be
eligible to receive a prorated
portion 33% of your annual bonus
based on the number of days you are
employed by the Company during such
fiscal year
	 	 	 	 	 
	 	 	
•
	 	Benefits. You shall be entitled
to participate in the employee
benefit plans, programs and
arrangements sponsored by Champion
which are applicable to senior
officers of Champion.
	 	 	 	 	 
	 	 	
•
	 	Vacation. You shall be entitled
to four weeks of vacation annually.
	 	 	 	 	 
	Equity Participation	 	 	 	You shall be eligible to participate
in the Company’s stock option plan,
subject to all related documents.
You shall be granted a non-qualified
stock option to purchase 21,000
shares of common stock in the
Company’s parent company, UCI
Acquisition Holdings, Inc., at an
exercise price of $100.00 per share.
The right to exercise the option
will be eligible to vest over a
five-year time period in accordance
with the terms set forth on Appendix
A.
	 	 	 	 	 
	Termination of Employment	 	 	 	If your employment shall terminate
for Cause (as defined on Appendix
B), without Good Reason (as defined
on Appendix B), or due to
non-extension of this Agreement by
you, you shall not be entitled to
any severance payment or benefits
(other than any accrued but unpaid
Annual Base Salary and vacation
days)
	 	 	 	 	 
	 	 	 	 	If your employment shall terminate without Cause or for Good






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Reason,
the Company shall pay, in accordance
with normal payroll practices, your
Annual Base Salary for twelve months
and shall pay you a lump sum equal
to a pro-rata portion of your Target
Level annual bonus for the year of
termination, based on the number of
days you were employed by the
Company during the applicable year.
Additionally, you and your
dependents shall be eligible for
continuing coverage under all
Company group health benefit plans
for up to twelve months.
	 	 	 
	 	 	
If your employment shall terminate
due to your death, the Company shall
pay your estate, in accordance with
normal payroll practices, your
Annual Base Salary for six months
and shall pay you a lump sum equal
to a pro-rata portion of your Target
Level annual bonus for the year of
termination, based on the number of
days you were employed by the
Company during the applicable year,
as determined in good faith by the
Compensation Committee.
	 	 	 
	Confidentiality	 	
All information acquired by you from
the Company will be considered
“confidential” and will not be
disclosed by you without the prior
written consent of the Company. You
shall execute and abide by the terms
and conditions of the Company’s
customary confidentiality agreement,
the terms and conditions of which
are incorporated herein by
reference.
	 	 	 
	Non-Disclosure of
Proprietary
Information	 	
You shall, in perpetuity, maintain
in confidence any confidential or
proprietary information or trade
secrets relating to the Company.
Upon expiration of the Term, you
shall return all correspondence,
drawings, materials, documents, and
similar items concerning the
Company, its clients, products or
processes. You may respond to valid
subpoena, but shall give the Company
notice thereof.
	 	 	 
	Non-Competition and
and Non-
Solicitation	 	
At any time during the Term or
during the 12-month period following
the date of your termination for
Cause or resignation without Good
Reason, (i) you shall not directly
or indirectly engage in, or manage
or operate any person, firm,
corporation, partnership or business
that engages in any business which
materially competes with the Company
or any entity owned by the Company
(including any direct and indirect
subsidiaries of the Company)
anywhere in the world, and (ii) you
shall not, and shall not permit any
of your affiliates to, directly or
indirectly, recruit or otherwise
solicit or induce any non-clerical
employee, customer, subscriber or
supplier of the Company to terminate
its employment or arrangement with
the Company, otherwise change its
relationship with the Company, or
establish any relationship






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with you
or any of your affiliates for any
business purpose that is prohibited
by (i) above. Nothing herein shall
prevent you from serving as a
reference.
	 	 	 
	 	 	
Any violation of by you of this
non-compete and non-solicitation
clause shall result in your
forfeiture of any severance benefits
hereunder. Additionally, the
Company may seek any other remedy
which may be available at law or in
equity and shall be entitled to
specific performance and injunctive
relief.
	 	 	 
	Non-Disparagement	 	
At any time during the Term or
during the 12-month period following
the later of the expiration of the
Term or your date of termination for
any reason, each of the parties
hereto agrees that it will not
disparage or denigrate to any person
any aspect of his or its past
relationship with the other, nor the
character of the other or the
other’s agents, representatives,
products, or operating methods,
whether past, present, or future,
and whether or not based on or with
reference to their past
relationship; provided, however,
that this paragraph shall have no
application to any evidence or
testimony requested of either party
hereto by any court or government
agency.
	 	 	 
	Arbitration	 	
Any dispute or controversy arising
under or in connection with this
Agreement shall be settled
exclusively by arbitration,
conducted before an arbitrator in
New York, New York in accordance
with the rules of the American
Arbitration Association then in
effect. Judgment may be entered on
the arbitration award in any court
having jurisdiction, provided,
however, that the Company shall be
entitled to seek a restraining order
or injunction in any court of
competent jurisdiction to prevent
any continuation of any violation of
the covenants contained in this
Agreement and you hereby consent
that such restraining order or
injunction may be granted without
requiring the Company to post a
bond. The arbitrator shall require
the non-prevailing party to pay the
arbitrator’s full fees and expenses
or, if in the arbitrator’s opinion
there is no prevailing party, the
arbitrator’s fees and expenses will
be borne equally by the parties
thereto.






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     Charlie, should you have any questions regarding the foregoing, please feel
free calling me at any time. Otherwise, please sign where indicated below and
send the original copy to me. All of us look forward to working with you.


Yours truly,



	 	 	 
	Bruce M. Zorich	 	
Accepted and Agreed: /s/ CHARLIE DICKSON                                      
	CEO	 	                                               Charlie Dickson
	United Components, Inc.	 	 
	Director	 	 
	Champion Laboratories, Inc.	 	 






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APPENDIX A



Stock Option Terms



Subject to the terms of the stock option plan and the stock option agreement,
below is a summary of the vesting schedule for the stock options granted to
you. The stock option shall vest over a five-year time period according to the
following:


	•
	 	50% of the shares subject to the
stock option shall become exercisable based on the
passage of time, or 10% in each of the five years




	•
	 	50% of the shares subject to
the stock option shall become exercisable based on
Company performance (“performance option”), or 10% in
each of the five years. The breakdown of the
performance measures is as follows:




	•
	 	12.5% on achieving Case 1 EBITDA (2.5% each year)


	•
	 	12.5% on achieving Case 1 free cash flow(2.5% each
year)


	•
	 	12.5% on achieving Case 2 EBITDA (2.5% each year)


	•
	 	12.5% on achieving Case 2 free cash flow(2.5% each
year)




	•
	 	Any portion of the performance
option that does not vest in any
given fiscal year may vest in future years if certain
cumulative
EBITDA or free cash flow targets are achieved.




	•
	 	Once vested in a portion of the performance option, it can never
be lost due to subsequent Company performance.




	•
	 	Performance option vesting is based on total Company
performance and not on the results of individual businesses.




	•
	 	You will also be eligible for “super option” vesting upon
the Company achieving 110% or greater of the
Case 2 performance targets per your conversations with
Carlyle.




For your information, Case 1 and Case 2 five-year projections are contained in
Appendix C.







 


APPENDIX B



Definitions of Cause and Good Reason



The Company shall have “Cause” to terminate you upon:


	(i)
	 	your failure to follow a written order of the Board and such
failure is not remedied within 30 days after receipt of notice;




	(ii)
	 	your gross or willful misconduct with regard to the Company;




	(iii)
	 	your conviction of a felony or crime involving material dishonesty;




	(iv)
	 	fraud or personal dishonesty involving the Company’s assets; or




	(v)
	 	the unlawful use (including being under the influence) or
possession of illegal drugs on the Company’s premises or while
performing your duties and responsibilities for the Company.




You shall have “Good Reason” to resign your employment upon the occurrence of
any of the following:


	(i)
	 	a material diminution in the nature of scope of your
responsibilities, duties or authority; or




	(ii)
	 	the Company’s material breach of this agreement.




You may not resign your employment for Good Reason unless:


	(A)
	 	you have provided the Company
with at least 30 days prior written notice of your
intent to resign for Good Reason; and




	(B)
	 	the Company has not remedied the
alleged violation(s)
within the 30-day period.









 




APPENDIX C



Case 1 and Case 2 Projections