EX-10.2






Exhibit 10.2



EMPLOYMENT AGREEMENT




This EMPLOYMENT AGREEMENT (the “Agreement” or “Employment Agreement”) dated March 7, 2011
(“Effective Date”) between Eugene S. Putnam, Jr. (“Employee”) and Universal Technical Institute,
Inc., a Delaware corporation (the “Company”) provides:



WHEREAS, the Company wishes to obtain the future services of Employee and Employee is willing
to continue to provide services to the Company; and



WHEREAS, the parties wish to revise and update the existing Employment Agreement between them
to reflect the current status of Employee’s employment and to ensure compliance with applicable
laws and regulations; and



WHEREAS, Employee wishes to have the protection provided for in this Agreement and, in
exchange for such protection, is willing to give to the Company, under certain circumstances, a
covenant not to compete and a release of all liability.



NOW, THEREFORE, the parties hereto agree as follows:



1. Previous Agreement Superseded. The previous Employment Agreement between the
parties dated July 24, 2008 (the “Previous Employment Agreement”) is hereby superseded, replaced in
its entirety and considered null and void.



2. Definitions.




a. “Board of Directors” means the Board of Directors of the Company.




b. “Cause” means any one (1) or more of the following:




(i) Employee’s conviction of, or plea of guilty or nolo contendere to, any
felony or a crime involving embezzlement, conversion of property or moral turpitude;




(ii) A finding by a majority of the Board of Directors of Employee’s fraud,
embezzlement or conversion of the Company’s property;




(iii) Employee’s conviction of, or plea of guilty or nolo contendere to, a
crime involving the acquisition, use or expenditure of federal, state or local
government funds relating to the business and affairs of the Company;




(iv) A final, nonappealable administrative or judicial determination that
Employee committed fraud or any other violation of law involving federal, state or
local government funds relating to the business and affairs of the Company;




(v) A finding by a majority of the Board of Directors of Employee’s knowing
breach of any of Employee’s fiduciary duties to any company in the Company Group or
the Company’s stockholders or making of an intentional misrepresentation or omission
which breach, misrepresentation or omission would reasonably be expected to have a
material adverse effect on the business relationship, the business, properties,
assets, operations, condition (financial or other) or prospects of any company in
the Company Group;




(vi) Employee’s alcohol or substance abuse, which materially interferes with
Employee’s ability to discharge the duties, responsibilities and obligations
prescribed by this Agreement as determined by a majority of the Board of Directors;




(vii) Employee’s material and knowing failure to observe or comply with law
applicable to the business of the Company as an officer or employee of the Company
which would reasonably be expected to have a material adverse effect on the business
relationship, the business, properties, assets, operations, condition (financial or
other), or prospects of any company in the Company Group as determined by a majority
of the Board of Directors;




(viii) Employee’s willful gross misconduct relating to the business of the
Company that results in significant harm to the Company or its operation,
properties, reputation, goodwill or business relationships as determined by a
majority of the Board of Directors,




provided that (i) any finding or determination made by the Board of Directors concerning the
existence of Cause must be made in good faith and not for purposes of evading the Company’s
obligations hereunder; and (ii) a finding or determination of Cause by the Board of
Directors may not be made unless, prior to determining that Cause exists, the Employee shall
be given written notice stating in reasonable detail the facts and circumstances deemed by
the Company to constitute Cause, and thirty (30) days from receipt of such notice Employee
has failed to cure the facts and circumstances set forth in such notice.




c. “Change of Control” means: (i) any sale, lease, exchange, or other transfer (in one
(1) transaction or series of related transactions) of all or substantially all of the
Company’s assets to any person or group of related persons under Section 13(d) of the
Securities and Exchange Act of 1934 (“Group”); (ii) the Company’s shareholders approve and
complete any plan or proposal for the liquidation or dissolution of the Company; (iii) any
person or Group becomes the beneficial owner, directly or indirectly, of shares representing
more than 50% of the aggregate voting power of the issued and outstanding stock entitled to
vote in the election of directors of the Company (“Voting Stock”) and such person or Group
has the power and authority to vote such shares; (iv) any person or Group acquires
sufficient shares of Voting Stock to elect a majority of the members of the Board of
Directors; or (v) the completion of a merger or consolidation of the Company with another
entity in which holders of the Company’s stock immediately before the completion of the
transaction hold, directly or indirectly, immediately after the transaction, 50% or less of
the common equity interest in the surviving corporation in the transaction. Notwithstanding
the foregoing, in no event will a Change of Control be deemed to have occurred as a result
of an initial public offering of the Company’s stock. Also, notwithstanding anything to the
contrary herein, the fact that a transaction or event is defined as a Change of Control for
purposes of this Agreement shall not evidence or infer that the transaction or event
constitutes a change of control for purposes of, including but not limited to, any
determination or definition of the Department of Education, any licensing agency, or for
determining the duties of the Company’s Board of Directors under Delaware corporate law.




d. “Code” means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.




e. “Company Group” shall mean the entities listed on Schedule 1.




f. “Compete” shall mean to directly or indirectly own, operate, manage, join, control,
be employed by, be a consultant to, invest in, or become a director, officer, agent,
partner, member, independent contractor or shareholder of any Competitive Business, as
defined below. As used in this Agreement, “Compete” does not include purely passive
investments in any publicly traded company so long as Employee does not directly or
indirectly own, acquire or obtain options to acquire, 5% or more of any class of shares in
such company.




g. “Competitive Business” means any post secondary educational institution or entity
which conducts educational programs in the areas of automotive, motorcycle, marine, diesel
or collision repair and refinishing technologies (or a combination of these programs).




h. “Confidential Information” means any confidential information including, without
limitation, any study, data, calculations, software, storage media or other compilation of
information, patent, patent application, copyright, “know-how”, trade secrets, customer,
student or prospective student lists or information, details of client, consultant, student,
vendor, supplier or manufacturer contracts, pricing policies, operational methods, marketing
plans or strategies, product development techniques or plans, business acquisition plans or
any portion or phase of any scientific or technical information, ideas, discoveries,
designs, computer programs (including source or object codes), processes, procedures,
formulae, improvements or other proprietary or intellectual property of any company in the
Company Group, whether or not in written or tangible form, and whether or not registered,
and including all files, records, manuals, books, catalogues, memoranda, notes, summaries,
plans, reports, records, documents and other evidence thereof. Notwithstanding the
foregoing, the term Confidential Information does not include, and there shall be no
obligation hereunder with respect to, information that is or becomes generally available to
the public other than as a result of a disclosure by the Employee not permissible hereunder.




i. “Disability” means Employee is either:




(i) determined to be totally disabled by the Social Security Administration; or




(ii) determined to be disabled pursuant to the Company’s disability plans for a
period of at least three (3) months.




j. “Good Reason,” when used with reference to a voluntary termination by Employee of
Employee’s employment with the Company, shall mean any of the following conditions, provided
that Employee (i) provides the Company with actual notice of the condition giving rise to
the termination within ninety (90) days of Employee’s knowledge of the initial existence of
the condition, (ii) provides the Company with the opportunity to cure within thirty (30)
days of the notice, and (iii) terminates employment within two (2) years of the initial
existence of the condition:




(a) A material diminution in any of the following:




A. Employee’s base compensation;




B. Employee’s authority, duties or responsibilities; provided that, a
material diminution of Employee’s authority, duties or responsibilities
shall be deemed to have occurred if Employee ceases to have such
authorities, duties or responsibilities with respect to the entity which is
the ultimate parent entity of the Company Group following a Change of
Control.




(b) A material change in the geographic location at which the Employee must
perform the services; or




(c) Any other action or inaction that constitutes a material breach by the
Company of this Agreement and such breach is not cured as set forth in 2.j. (ii)
above.




k. “Market” means anywhere in the United States or Puerto Rico. If an arbitrator or
arbitration panel finds that this definition of Market is unreasonable, then the Market will
be considered to mean all states in which the Company has a campus or other training center
and all states that are contiguous to a state in which the Company has a campus or other
training center. If an arbitrator or arbitration panel finds that definition of Market is
unreasonable, the Market shall mean all states in which the Company has a campus or other
training center.




l. “Position” means the particular position of President and Chief Financial Officer.




m. “Regulations” means any laws, ordinances, regulations or rules of any governmental,
regulatory or administrative body, agent or authority, any court or judicial authority, or
any public, private or industry regulatory authority.




n. “Severance Period” means the period of time that the Company continues to pay
Employee as set forth in Section 9.a.




o. “Specified Employee” means any Company employee that the Company determines is a
Specified Employee within the meaning of Section 409A of the Code. The Company shall
determine whether an employee is a Specified Employee by applying reasonable, objectively
determinable identification procedures set forth in a resolution of the Board of Directors
issued before December 31, 2007.




p. “Term of Employment” means the period commencing on the Effective Date and
terminating three (3) years after the Effective Date. Employee acknowledges that the Company
has no obligation to continue Employee’s employment or this Agreement beyond the Term of
Employment. The Term of Employment may also be terminated with or without cause and without
notice subject to the provisions of Section 8 and Section 9.




q. “Termination Date” shall mean the last day of Employee’s employment with the
Company.



3. Nature of Employment. Subject to the terms of this Agreement, the Company hereby
agrees to continue to employ Employee in the Position, and Employee hereby agrees to accept the
continuation of such employment in the Position, for the Term of Employment under this Agreement.



4. Extent of Employment.



While employed:




a. Employee agrees to perform the duties of the Position faithfully and to the best of
Employee’s ability at the principal offices of the Company or in locations as may be
designated temporarily from time to time by the Company or as necessary to fulfill the
duties of the Position. Employee shall report to the Chief Executive Officer, or as
otherwise directed by the Board of Directors.




b. Employee shall abide by the policies, rules, customs, and usages as established by
or existing at the Company.




c. Employee shall devote all of his business time, energy and skill as may be
reasonably necessary for the performance of the duties, responsibilities, and obligations of
the Position.




d. Employee shall not knowingly breach or violate any Regulations or rules of any
governmental or regulatory body in any material respect and shall not act in any manner
which might reasonably be expected to have a material adverse effect on the ongoing
business, properties, assets, operations, condition (financial or other), business
relationships or prospects of any company in the Company Group.




e. Employee shall not commit or engage in any conduct, through action or omission,
which would constitute any of the offenses set forth in the definition of “Cause” under this
Agreement.




f. Employee agrees to live in the Phoenix, Arizona metropolitan area.



5. Compensation. While Employee is employed by the Company, the Company shall pay
Employee as follows:




a. A base salary, paid in twenty six (26) equal installments, at a rate of Four Hundred
Fifty Thousand Dollars ($450,000) per annum. The Board of Directors shall annually, and in
its sole discretion, determine whether the base salary should be increased and, if so, in
what amount.




b. An annual bonus based on Employee’s performance as determined and approved by the
Board of Directors based on performance parameters set by the Board of Directors. Such
bonus will be determined at the sole discretion of the Board of Directors, and may not be
paid at all. Employee acknowledges that no bonus will be paid if performance parameters are
not met. If the Board of Directors determines that such bonus shall be paid, such bonus
shall be paid by the fifteenth (15th) day of the third (3rd) month of the Employee’s taxable
year following the year in which the Employee becomes entitled to such bonus.



6. Reimbursement of Expenses. While Employee is employed, the Company shall reimburse
Employee for reasonably documented travel expenses, entertainment and other expenses reasonably
incurred by Employee in connection with the performance of the duties of the Position and, in each
case, according to the reasonable rules, policies, customs and usage promulgated by the Company
from time to time. All reimbursements shall be made within thirty (30) days of Employee’s
submission of any reasonably documented expense reimbursement claim. The amount of expenses
eligible for reimbursement provided during one (1) taxable year shall not affect the amount of
expenses eligible for reimbursement or in-kind benefits provided during any other taxable year.
Employee may not elect to receive cash or any other benefit in lieu of the reimbursements provided
by this Section.



7. Benefits. While Employee is employed, the Employee shall be entitled to
perquisites and benefits established from time to time, at the sole discretion of the Board of
Directors for the Position, including without limitation, health, short and long term disability,
pension and life insurance benefits consistent with past practice, or as increased from time to
time; provided that the perquisites and benefits provided to Employee shall be at least
substantially equal to those provided to any other officer of the Company.



8. Termination of Employment for Cause or without Good Reason. At any time during the
Term of Employment, Company may terminate Employee for Cause effective upon the giving to Employee
a written notice of termination. If Employee’s employment is terminated for Cause or Employee
voluntarily terminates without Good Reason, Employee shall be entitled to:




a. Payment of accrued and unpaid base salary and unused vacation through the
Termination Date;




b. Reimbursement for expenses incurred through the Termination Date as set forth in
Section 6.



9. Termination of Employment without Cause, for Good Reason, upon Change of Control, or
due to the Death or Disability of Employee. During the Term of Employment, the Company may
terminate Employee without Cause and without providing notice to Employee, and Employee may
terminate employment with the Company for Good Reason. Employee’s death or Disability shall cause
termination of Employee’s employment.




a. During the Term of Employment, if Employee is terminated without Cause or if
Employee terminates for Good Reason, either of which occurs without a Change of Control,
Employee shall be entitled to the following items so long as Employee has signed the release
described in Section 11 below and not revoked it:




(i) The Company shall provide the items set forth in Section 8.a. and 8.b.
above.




(ii) The Company shall pay to Employee, an amount equal to Employee’s base
salary at the highest rate in effect at any time during the twelve (12) months
immediately preceding the Termination Date, payable for a period of twenty-four (24)
months (the “Severance Period”). Employee will be paid this amount in equal
bi-weekly installments according to the Company’s regular payroll periods and
practices. The first payment to which Employee is entitled shall be paid on the
first pay date immediately following the first (1st) day of the month
following the revocation period, if any, as set forth in Exhibit A. At all
times, the right to each bi-weekly payment made under this Section 9 shall be
treated as the right to a series of separate payments within the meaning of 26
C.F.R. § 1.409A-2(b)(2)(iii).




(iii) Employee will be eligible for the fiscal year bonus if such bonus is
approved by the Board of Directors based upon parameters set by the Board of
Directors. The amount of any such bonus will be pro-rated based on the Termination
Date and shall be paid at the time other employees are paid the bonus, but in no
event will such bonus be paid after the fifteenth (15th) day of the third (3rd)
month of the Employee’s taxable year following the year in which the Employee
becomes entitled to such bonus.




(iv) Employee’s then current medical and dental benefits will continue pursuant
to Company policy and the provisions of any applicable benefit plan. Beginning on
the first (1st) day that active employee coverage is ineffective, Employee may elect
to continue current medical and dental benefits for up to eighteen (18) months in
accordance with any applicable plan provisions and the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA). In addition, the Company will continue to pay a
monthly amount equal to the Company paid portion of the insurance premium for the
coverage held by Employee as of the Termination Date, and any administrative fee,
for a period of eighteen (18) months. In addition, for a period of six (6) months
following the expiration of COBRA coverage the Company shall maintain, at Company
expense, health care insurance benefits comparable to that provided to Employee
under COBRA. Upon Employee’s employment with another employer, to the extent
Employee and his dependants are eligible for substantially equivalent benefits under
the new employer’s plan, the Company will no longer be obligated to pay for the
continuation coverage.




The provision of medical and dental benefits during the six (6) months
following the expiration of COBRA coverage is subject to the requirements of Section
409A of the Code. To ensure compliance with Section 409A, the Company will assure
that such benefits are payable at a specified time or pursuant to a fixed schedule
within the meaning of 26 C.F.R. § 1.409A-3(1)(iv). In order to ensure compliance
with this provision of the regulations, the benefits eligible for reimbursement in
one (1) taxable year will not affect the benefits eligible for reimbursement by the
Company in a different taxable year. All reimbursements of benefits must be made no
later than December 31 of the taxable year following the taxable year in which the
expense was incurred. Employee may not elect to receive cash or any other benefit
in lieu of the benefits provided by this Section.




(v) All stock Awards (as defined by any applicable Plan), including stock
options and restricted stock, shall be governed by the terms and provisions of the
Plan and the grant Agreement under which such Award was granted.




(vi) Employee’s participation in and/or coverage under all other employee
benefit plans, programs or arrangements sponsored or maintained by the Company shall
cease to be effective as of the Termination Date, unless such benefit, program or
plan is inalienable under the law.




(vii) The Company shall pay for twelve (12) months of outplacement services
through a provider selected by the Company for the twelve (12) month period
immediately following the Termination Date.




(viii) The children of Employee shall be eligible to attend any Company
location or program without paying tuition. The benefit provided pursuant to this
Section 9.a.(viii) shall be made available to Employee until Employee’s children
reach age twenty-six (26). To ensure compliance with Section 409A, the Company will
assure that such benefits are payable at a specified time or pursuant to a fixed
schedule within the meaning of 26 C.F.R. § 1.409A-(3)(1)(iv). The amount of in kind
benefits provided pursuant to this provision in one (1) taxable year will not affect
the amount of the benefits provided in a different taxable year. Employee may not
elect to receive cash or any other benefit in lieu of the benefits provided by this
Section.




b. During the Term of Employment, if Employee is terminated without Cause or if
Employee terminates for Good Reason, either of which occurs within twelve (12) months of a
Change of Control, Employee shall be entitled to the following items so long as Employee has
signed the release described in Section 11 below and not revoked it:




(i) Except for the bonus set forth in Section 9.a.(iii), all of the payments
and benefits as set forth in Section 9.a. above; and




(ii) The Company shall also pay to Employee Employee’s maximum targeted bonus
for the fiscal year in which the Termination Date occurs prorated to the Termination
Date. Employee will be paid this bonus amount over the Severance Period in equal
bi-weekly installments according to the Company’s regular payroll periods and
practices.




c. Unless otherwise prohibited by law, Employee’s employment with the Company will
terminate on the effective date of Employee’s Disability. The effective date of Employee’s
Disability, which will be Employee’s Termination Date for purposes of this Section 9.c., is
the last day of the third (3rd) month on which Employee receives disability benefits
pursuant to a Company sponsored disability plan or the day on which Employee is determined
to be totally disabled by the Social Security Administration. Employee shall be entitled to
the following items upon Employee’s Disability, so long as Employee has signed the release
described in Section 11 below and not revoked it:




(i) Severance payments as provided under Section 9.a.(ii); and




(ii) All the payments and benefits set forth in Section 9.a.(i), (iii), (iv),
(v), (vi), (vii) and (viii); and




(iii) Disability benefits under the applicable plan or practice.




d. During the Term of Employment if Employee dies, Employee’s estate shall be entitled
to the following items:




(i) Severance payments as provided under Section 9.a.(ii), provided however
that the severance payments payable under Section 9.a.(ii) shall begin on the first
(1st) day of the month following the date of Employee’s death; and




(ii) All the payments and benefits set forth in Section 9.a.(i), (iii), (v),
and (vi), (viii); and




(iii) Employee’s dependents, if any, who are covered by Employee’s health or
dental insurance at the time of death shall be eligible for the benefits provided
under Section 9.a.(iv).




e. To the extent Employee’s Termination Date is prior to the date on which the Company
has paid any bonus to which the Employee may be entitled for the fiscal year immediately
preceding the Termination Date, (i.e. between the end of the fiscal year and the bonus
payout), Employee will receive such bonus in a lump sum on the same date as Employee would
have received such bonus had Employee remained continuously employed by the Company. In all
cases, the bonus payment to which Employee is entitled pursuant to this Section 9.e, if any,
will be paid to Employee on or before the fifteenth (15th) day of the third (3rd) month of
Employee’s taxable year following the taxable year in which Employee became entitled to the
bonus.




f. If any payment or benefit Employee would receive under this Agreement, when combined
with any other payment or benefit Employee receives pursuant to the termination of
Employee’s employment with the Company (“Payment”), would:




(i) constitute a “parachute payment” within the meaning of Section 280G of the
Code, and




(ii) but for this sentence, be subject to the excise tax imposed by Section
4999 of the Code (the “Excise Tax”), then such Payment shall be whichever of the
following amounts, taking into account the applicable federal, state and local
employment taxes, income taxes, and the Excise Tax, results in Employee’s receipt,
on an after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax:




	 	(a)	 	the full amount of such Payment;
or






	 	(b)	 	such lesser amount (with cash
payments being reduced) as would result in no portion of the
Payment being subject to the Excise Tax.






(iii) All determinations required to be made under this Section 9.f., including
whether and to what extent the Payments shall be reduced and the assumptions to be
utilized in arriving at such determination, shall be made by a national independent
accounting firm registered with the Public Company Accounting Oversight Board as
will be designated by the Company (the “Accounting Firm”). The Accounting Firm shall
provide detailed supporting calculations both to Employee and the Company at such
time as is requested by the Company. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. For purposes of making the calculations
required by this Section 9.f., the Accounting Firm may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable,
good-faith interpretations concerning the application of Sections 280G and 4999 of
the Code.




(iv) To the extent any reduction of the Payments becomes necessary pursuant to
this Section 9.f., the reduction first shall apply to amounts payable pursuant to
this Section 9, or pursuant to any other arrangement, that are not subject to
Section 409A of the Code. If the amount of the necessary reduction exceeds the
amount of the payments described in the preceding sentence, the reduction will then
apply on a proportional basis to amounts payable to Employee that are subject to the
requirements of Section 409A of the Code.




g. Notwithstanding any other provision of this Agreement to the contrary, neither the
time nor the schedule of any payment under this Agreement may be accelerated or subject to a
further deferral except as provided in 26 C.F.R. § 1.409A-3(j)(4).




h. The Employee does not have any right to make any election regarding the time or form
of any payment due under this Agreement.




i. If the Company fails to make any payment under this Agreement, either intentionally
or unintentionally, within the time period specified in this Agreement, but the payment is
made within the same calendar year, such payment will be treated as made within the time
period specified in the Agreement pursuant to 26 C.F.R. § 1.409A-3(d). In addition, if a
payment is not made due to a dispute with respect to such payment, the payment may be
delayed in accordance with 26 C.F.R. § 1.409A-3(g).




j. For purposes of this Agreement, Employee’s Termination Date shall be the date on
which Employee incurs a “Separation from Service.” For this purpose, the term “Separation
from Service” means either (1) the termination of Employee’s employment with the Company and
all affiliates, or (2) a permanent reduction in the level of bona fide services that
Employee provides to the Company and all affiliates to an amount that is 20% or less of the
average level of bona fide services that Employee provided to the Company and all affiliates
in the immediately preceding thirty-six (36) months, with the level of bona fide services to
be calculated in accordance with regulations issued by the United States Treasury Department
pursuant to Section 409A of the Code.




Employee’s relationship is treated as continuing while Employee is on military leave,
sick leave, or other bona fide leave of absence (if the period of such leave does not exceed
six (6) months, or if longer, so long as Employee’s right to reemployment with the Company
or an affiliate is provided either by statute or contract). If Employee’s period of leave
exceeds six (6) months and Employee’s right to reemployment is not provided either by
statute or by contract, the relationship between Employee and the Company is deemed to
terminate on the first day immediately following the expiration of such six (6) month
period. Whether a termination has occurred will be determined based on all of the facts and
circumstances.




For purposes of this paragraph, the term “affiliate” shall have the meaning set forth
in 26 C.F.R. § 1.409A-1(h)(3) (which generally requires 50% common ownership).




If Employee is providing services to the Company in more than one (1) capacity, for
example as both an employee and a member of the Board of Directors or an independent
contractor for the Company, Employee must terminate employment with or services to the
Company in all capacities in order to have a Separation from Service for purposes of this
Agreement.




k. This Agreement shall be administered in compliance with Section 409A of the Code or
an exception thereto and each provision of the Agreement shall be interpreted, to the extent
possible, to comply with Section 409A or an exception thereto.



Notwithstanding any of the foregoing, if the Employee is a Specified Employee on the Termination
Date, all bi-weekly payments, if any, that are to be made following the fifteenth (15th) day of the
third (3rd) month of the Employee’s taxable year following the Employee’s taxable year in which
Termination Date occurred, but before the date which is six (6) months following the Termination
Date, shall be paid in a lump-sum on the first (1st) day of the seventh (7th) month following the
Employee’s Termination Date or, if earlier, the date the Employee dies following the Termination
Date.



10. Mitigation or Reduction of Benefits. In the event of termination of employment as
set forth in Section 9 above, Employee shall not be required to mitigate the amount of any payment
provided for in that Section by seeking other employment or otherwise. Except as otherwise
specifically set forth herein, the amount of any payment or benefits provided in Section 9 shall
not be reduced by any compensation or benefits or other amounts paid to or earned by Employee as
the result of employment by another employer after the Termination Date.



11. Release. In order to receive payments and benefits described in Section 9, other
than those provided in Section 8 and those provided in the event of Employee’s death, Employee must
execute a Release in the form attached as Exhibit A, and that Release must become effective
by Employee not revoking it. If Employee fails to sign the Release within the period provided in
the Release, or if Employee revokes the Release within the seven (7) day revocation period provided
therein, Employee will forfeit any right to the payments and benefits described in Section 9. As a
general rule, Employee shall receive the Release from the Company on or before Employee’s
Termination Date, but in no event will Employee receive the Release more than ten (10) days
following Employee’s Termination Date. Notwithstanding anything in this Agreement to the contrary,
if the period during which Employee may consider and revoke the Release spans two (2) calendar
years, the installment severance payments to which Employee is entitled pursuant to Sections
9.a.(ii), 9.b.(ii) and 9.c.(i) shall commence in the second (2nd) calendar year.



12. Covenant Not to Compete. In consideration of this Agreement, and the employment
under it, the parties have agreed to the following Covenant Not to Compete.




a. Post Termination Restrictions. Employee acknowledges that the services provided
under this Agreement give Employee the opportunity to have special knowledge of the Company,
its Confidential Information, and the capabilities of individuals employed by or affiliated
with the Company. Employee further acknowledges that interference with those business or
employment relationships with the Company would cause irreparable injury to the Company.
Consequently, Employee covenants and agrees that:




(i) From the Effective Date hereof until twenty-four (24) months (or for
eighteen (18) months if an arbitrator or arbitration panel finds that twenty-four
(24) months are unreasonable) after the Termination Date, Employee will not, without
the express written approval of a majority of the Board of Directors, directly or
indirectly, anywhere in the Market, in one (1) or a series of transactions, Compete
against Company, as defined in Section 2 above, without regard to (a) whether the
Competitive Business has its office or other business facilities within or outside
the Market, (b) whether any of the activities of the Employee referred to above
occur or are performed within or outside the Market, or (c) whether the Employee
resides, or reports to an office, within or outside the Market.




(ii) From the effective date hereof until twenty-four (24) months after the
Termination Date (which shall not be reduced by (a) any period of violation of this
Agreement by Employee or (b) if the Company is the prevailing party in any
litigation to enforce its rights under this Section 12, the period which is required
for such litigation), Employee will not, without the express prior written approval
of a majority of the Board of Directors, directly or indirectly, in one (1) or a
series of transactions: (i) recruit, solicit or otherwise induce or influence any
proprietor, partner, stockholder, lender, director, officer, employee, sales agent,
joint venturer, investor, lessor, customer, agent, representative or any other
person which has a business relationship with the Company or had a business
relationship with the Company within the twelve (12) month period preceding the date
of the incident in question, to discontinue, reduce or modify such employment,
agency or business relationship with the Company; or (ii) employ or seek to employ
or cause any Competitive Business to employ or seek to employ any person or agent
who is then (or was at any time within twelve (12) months prior to the date the
Employee or the Competitive Business employs or seeks to employ such person)
employed or retained by the Company. Notwithstanding the foregoing, nothing herein
shall prevent the Employee from providing a personal letter of recommendation to an
employee of the Company with respect to a future or any other employment
opportunity.




(iii) The scope and term of this Section 12 would not preclude Employee from
earning a living in an occupation or position with an entity that is not a
Competitive Business.




b. Acknowledgment Regarding Restrictions. Employee recognizes and agrees that the
restraints contained in Section 12 (both separately and in total) are reasonable and should
be fully enforceable in view of the high level positions Employee has had with the Company,
and the Company’s legitimate interests in protecting its Confidential Information and its
goodwill and relationships. Employee specifically hereby acknowledges and confirms that
Employee is willing and intends to, and will, abide fully by the terms of Section 12 of this
Agreement. Employee further agrees that the Company would not have adequate protection if
Employee were permitted to work in a Competitive Business in violation of the terms of this
Agreement since the disclosure of Confidential Information is inevitable and the Company
would be unable to verify whether its Confidential Information was being disclosed and/or
misused.




c. Company’s Right to Cease and Recoup Payments and Obtain Injunctive Relief. In the
event of a breach or imminent breach of any of Employee’s duties or obligations under this
Agreement, the Company shall be entitled to immediately cease all payments and benefits to
Employee under Section 9 and, in the event of an actual breach, require Employee to disgorge
and repay to Company all payments and benefits previously paid to or conferred upon Employee
under Section 9 of this Agreement after the commencement of Employee’s breach. Employee
agrees that if Employee breaches any duties or obligations Employee has under this
Agreement, that, except for sums set forth in Section 8, Employee has no right to any money
or benefits under Section 9 of this Agreement and that Employee must return any money paid
to Employee under that section. In addition to any other legal or equitable remedies the
Company may have (including any right to damages that it may suffer), the Company shall be
entitled to temporary, preliminary and permanent injunctive relief restraining such breach
or imminent breach. Employee hereby expressly acknowledges that the harm which might result
to Company’s business as a result of noncompliance by Employee with any of the provisions of
this Agreement would be largely irreparable. Each party undertakes and agrees that if he/it
breaches or threatens to breach the Agreement, he/it shall be liable for any attorneys’ fees
and costs incurred by the other party in enforcing its rights hereunder.




d. Employee Agreement to Disclose this Agreement. Employee agrees to disclose, during
the Severance Period, the terms of this Section 12 to any potential future employer.




e. Survival. The terms of this entire Section 12 shall survive the termination of
Employee’s employment under this Agreement regardless of who terminates employment or the
reasons therefore.



13. Confidential Information.




a. During and after the Term of Employment, Employee will not, directly or indirectly,
in one (1) or a series of transactions, disclose to any person, or use or otherwise exploit
for the Employee’s own benefit or for the benefit of anyone other than the Company, any
Confidential Information, whether prepared by Employee or not; provided, however, that any
Confidential Information may be disclosed (i) to officers, representatives, employees and
agents of the Company who need to know such Confidential Information in order to perform the
services or conduct the operations required or expected of them in the business, and (ii) in
good faith by the Employee in connection with the performance of Employee’s duties hereunder
to persons who are authorized to receive such information by the Company. Employee shall use
Employee’s best efforts to prevent the removal of any Confidential Information from the
premises of the Company, except as required in Employee’s normal course of employment by the
Company. Employee shall use Employee’s best efforts to cause all persons or entities to whom
any Confidential Information shall be disclosed by Employee hereunder to observe the terms
and conditions set forth herein as though each such person or entity was bound hereby.
Employee shall have no obligation hereunder to keep confidential any Confidential
Information, if and to the extent disclosure of any such information is specifically
required by law or requested by a governmental agency; provided, however, that in the event
disclosure is required by applicable law or requested by a governmental agency, the Employee
shall provide the Company with prompt notice of such requirement or request, prior to making
any disclosure, so that the Company may seek an appropriate protective order. At the request
of the Company, Employee agrees to deliver to the Company, at any time during the Term of
Employment, or thereafter, all Confidential Information which Employee may possess or
control. Employee agrees that all Confidential Information of the Company (whether now or
hereafter existing) conceived, discovered or made by Employee during the Term of Employment
exclusively belongs to the Company (and not to Employee). Employee will promptly disclose
such Confidential Information to the Company and perform all actions reasonably requested by
the Company to establish and confirm such exclusive ownership.




b. The terms of this entire Section 13 shall survive the termination of Employee’s
employment under this Agreement regardless of who terminates employment or the reasons
therefore.



14. Notice. All notices hereunder shall be in writing and shall be deemed to have
been duly given (a) when delivered personally or by courier, or (b) on the third
(3rd)business day following the mailing thereof by registered or certified mail, postage
prepaid, or (c) on the first (1st) business day following the mailing thereof by
overnight delivery service, in each case addressed as set forth below:



If to the Company:



Universal Technical Institute, Inc.



16220 N. Scottsdale,



Suite 100



Scottsdale, Arizona 85254



Facsimile No.: (623) 445-9501



Attn: General Counsel



With a copy to:



Chairman of the Compensation Committee



of the Board of Directors



16220 N. Scottsdale Rd.



Scottsdale, Arizona 85254



If to Employee:



Eugene Putnam



4327 N. 64th Street



Scottsdale, AZ 85251



Any party may change the address to which notices are to be addressed by giving the other party
written notice in the manner herein set forth.



15. Employee Expenses in the Event of Dispute. If Employee’s employment is terminated
by the Company within the Term of Employment and there is a dispute with respect to this Agreement,
then all of Employee’s reasonable legal expenses incurred by Employee (a) to defend the validity of
this Agreement, (b) if Employee’s employment has been terminated for Cause, to contest such
termination, (c) to contest any determinations by the Company concerning the amounts payable by the
Company under this Agreement, or (d) to otherwise obtain or enforce any right or benefit provided
to Employee by this Agreement, shall be paid by the Company if Employee is the prevailing party.
Such expenses shall be paid, if at all, within thirty (30) days of the date of the determination
that Employee is the prevailing party, but in no event later than December 31st of the taxable year
following the year in which the Employee incurred the expenses. The expenses reimbursed in one (1)
taxable year will not affect the expenses eligible for reimbursement by the Company in a different
taxable year. All reimbursements of the expenses must be made no later than December 31st of the
taxable year following the taxable year in which the expenses were incurred. The Employee may not
elect to receive cash or any other benefit in lieu of the benefits provided by this Section.



16. Agreement to Arbitrate. All disputes or claims regarding this Agreement shall be
submitted for resolution exclusively to binding arbitration under the Commercial Rules of
Arbitration of the American Arbitration Association in Phoenix, Arizona. The arbitrator or
arbitration panel shall have the authority to award temporary or permanent injunctive relief and to
award attorneys’ fees and costs to the prevailing party. Any temporary or permanent injunctive
relief ordered by the arbitrator or the arbitration panel may be enforced in court by either party
by seeking judicial confirmation of such award.



17. Successors; Binding Agreement.




a. The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, upon or prior to such succession, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would have
been required to perform it if no such succession had taken place. A copy of such
assumption and agreement shall be delivered to Employee promptly after its execution by the
successor. Failure of the Company to obtain such agreement upon or prior to the
effectiveness of any such succession shall be deemed to be a material breach of this
Agreement. As used in this Agreement, “Company” shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 17 or which otherwise becomes bound by
the terms and provisions of this Agreement by operation of law.




b. This Agreement is personal to Employee and Employee may not assign or delegate any
part of Employee’s rights or duties hereunder to any other person, except that this
Agreement shall inure to the benefit of, and be enforceable by, Employee’s legal
representatives, executors, administrators, heirs and beneficiaries.



18. Severability. If any provision of this Agreement or the application thereof to
any person or circumstance shall to any extent be held to be invalid or unenforceable, the
remainder of this Agreement and the application of such provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be affected thereby, and each
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
An arbitrator or arbitration panel can reasonably modify this Agreement by rewriting it and/or it
can “blue-pencil” this Agreement by striking things out.



19. Headings. The headings in this Agreement are inserted for convenience of
reference only and shall not in any way affect the meaning or interpretation of this Agreement.



20. Counterparts. This Agreement may be executed in one (1) or more identical
counterparts, each of which shall be deemed an original but all of which together shall constitute
one (1) and the same instrument.



21. Waiver. Neither any course of dealing nor any failure or neglect of either party
hereto in any instance to exercise any right, power or privilege hereunder or under law shall
constitute a waiver of such right, power or privilege or of any other right, power or privilege or
of the same right, power or privilege in any other instance. Without limiting the generality of the
foregoing, Employee’s continued employment without objection shall not constitute Employee’s
consent to, or a waiver of, Employee’s rights with respect to any circumstances constituting Good
Reason. All waivers by either party hereto must be contained in a written instrument signed by the
party to be charged therewith, and, in the case of the Company, by a resolution adopted by a
majority of the Board of Directors.



22. Entire Agreement. This instrument constitutes the entire agreement of the parties
in this matter and shall supersede any other agreement between the parties, oral or written,
concerning the same subject matter.



23. Amendment. This Agreement may be amended only by a writing which makes express
reference to this Agreement as the subject of such amendment and which is signed by Employee and by
the Chairman of the Compensation Committee of the Board of Directors or the Chairman’s designee.



24. Governing Law. In light of Company’s and Employee’s substantial contacts with the
State of Arizona, the facts that the Company is headquartered in Arizona and Employee resides in
and provides services to the Company in Arizona, the parties’ interests in ensuring that disputes
regarding the interpretation, validity and enforceability of this Agreement are resolved on a
uniform basis, and Company’s execution of, and the making of, this Agreement in Arizona, the
parties agree that: (a) any arbitration or litigation involving any noncompliance with or breach of
the Agreement, or regarding the interpretation, validity and/or enforceability of the Agreement,
shall be filed and conducted exclusively in the state of Arizona; and (b) the Agreement shall be
interpreted in accordance with and governed by the laws of the State of Arizona, without regard for
any conflict/choice of law principles.



1



IN WITNESS WHEREOF, Employee and the Company have executed this Agreement as of the day and
year first above written.




UNIVERSAL TECHNICAL INSTITUTE, INC.




By:/s/ Chad A. Freed




	 	 	Its: SVP and General Counsel






EMPLOYEE:




/s/Eugene S. Putnam




	 	 	Eugene S. Putnam, Jr.





SCHEDULE 1




Companies in the Company Group consist of:




a. Universal Technical Institute, Inc.




b. UTI Holdings, Inc.




c. U.T.I. of Illinois, Inc.




d. Universal Technical Institute of Texas, Inc.




e. Universal Technical Institute of California, Inc.




f. Custom Training Group, Inc.




g. The Clinton Harley Corporation




h. Universal Technical Institute of Arizona, Inc.




i. Universal Technical Institute of North Carolina, Inc.




j. Universal Technical Institute of Northern California, Inc.




k. Universal Technical Institute of Massachusetts, Inc.




l. Universal Technical Institute of Pennsylvania, Inc.




m. Universal Technical Institute of Phoenix, Inc.




n. Universal Technical Institute of Northern Texas, Inc.



Exhibit A

RELEASE




This RELEASE (the “Release”) dated     ,        is by and between Eugene S. Putnam, Jr.
(“Employee”) and Universal Technical Institute, Inc., a Delaware corporation (“Company”);



WHEREAS, the Company and Employee are parties to an Employment Agreement dated March 7, 2011
(the “Employment Agreement”), which provides certain protection to Employee during employment and
upon termination of employment; and



WHEREAS, the execution of this Release is a condition precedent to, and material inducement
to, the Company’s provision of certain benefits under the Employment Agreement;



NOW, THEREFORE, the parties hereto agree as follows:



1. Mutual Promises. The Company undertakes the obligations contained in the Employment
Agreement, which are in addition to any compensation to which Employee might otherwise be entitled,
in exchange for Employee’s promises and obligations contained herein. The Company’s obligations are
undertaken in lieu of any other employment benefits.



2. Release of Claims; Agreement Not to File Suit.




a. Employee, for and on behalf of him or herself and his/her heirs, beneficiaries,
executors, administrators, successors, assigns and anyone claiming through or under any of
the foregoing, agrees to, and does, release and forever discharge the Company and its
subsidiaries and affiliates, each of their shareholders, directors, officers, employees,
agents and representatives, and its successors and assigns (collectively, the “Company
Released Persons”), from any and all matters, claims, demands, damages, causes of action,
debts, liabilities, controversies, judgments and suits of every kind and nature whatsoever,
foreseen or unforeseen, known or unknown, which have arisen or could arise from matters
which occurred prior to the date of this Release, which matters include without limitation:
(i) the matters covered by the Employment Agreement and this Release, and (ii) Employee’s
employment, and/or termination from employment with the Company.




b. Employee, for and on behalf of him or herself and his/her heirs, beneficiaries,
executors, administrators, successors, assigns, and anyone claiming through or under any of
the foregoing, agrees that Employee will not file or otherwise submit any arbitration
demand, claim, complaint, or action to any court, organization, or judicial forum (nor will
Employee permit any person, group of persons, or organization to take such action on
Employee’s behalf) against any Company Released Person arising out of any actions or
non-actions on the part of any Company Released Person arising out of the parties’
employment relationship before the date of this Release or any action taken after the date
of this Release pursuant to the Employment Agreement. Employee further agrees that in the
event that any person or entity should bring such a charge, claim, complaint, or action on
Employee’s behalf, Employee hereby waives and forfeits any right to recovery under said
claim and will exercise every good faith effort to have such claim dismissed.




c. The charges, claims, complaints, matters, demands, damages, and causes of action
referenced in Sections 2(a) and 2(b) include, but are not limited to: (i) any breach of an
actual or implied contract of employment between Employee and any Company Released Person,
(ii) any claim of unjust, wrongful, or tortious discharge (including, but not limited to,
any claim of fraud, negligence, retaliation for whistle blowing, or intentional infliction
of emotional distress), (iii) any claim of defamation or other common law action, or (iv)
any claims of violations arising under the Civil Rights Act of 1964, as amended, 42 U.S.C.
§2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. §621 et seq., the
Americans with Disabilities Act of 1990, 42 U.S.C. §12101 et seq., the Fair Labor Standards
Act of 1938, as amended, 29 U.S.C. §201 et seq., the Rehabilitation Act of 1973, as amended,
29 U.S.C. §701 et seq., the Family and Medical Leave Act, or any other relevant federal,
state, or local statutes or ordinances, or any claims for pay, vacation pay, insurance, or
welfare benefits or any other benefits of employment with any Company Released Person
arising from events occurring prior to the date of this Release other than those payments
and benefits specifically provided herein.




d. This Release shall not affect Employee’s right to any governmental benefits payable
under any Social Security or Worker’s Compensation law now or in the future.




e. This Release does not affect Employee’s right to participate in any federal, state
or local investigation by any governmental agency or to challenge the validity of this
Agreement. Further, this Release is not intended to be a release of any claims under the
Arizona Minimum Wage Act, effective January 1, 2007.



3. Release of Benefit Claims. Employee, for and on behalf of him or herself and his/her
heirs, beneficiaries, executors, administrators, successors, assigns and anyone claiming through or
under any of the foregoing, further releases and waives any claims for pay, vacation pay, insurance
or welfare benefits or any other benefits of employment with any Company Released Person arising
from events occurring prior to the date of this Release other than claims to the payments and
benefits specifically provided for in the Employment Agreement and claims for benefits which are
not subject to waiver under the law.



4. Revocation Period; Knowing and Voluntary Agreement. Employee acknowledges that he/she is
knowingly and voluntarily waiving and releasing any rights he/she may have under the Age
Discrimination in Employment Act, as amended, (“ADEA”). Employee also acknowledges that the
consideration given for the waiver and release in the preceding Section is in addition to anything
of value to which he/she would be entitled to without this Agreement. Employee further acknowledges
that Employee is advised by this writing, as required by the ADEA, that: (a) this waiver and
release do not apply to any rights or claims that may arise after execution date of this Agreement;
(b) Employee has been advised of having had the right to consult with an attorney prior to signing
this Agreement; (c) Employee has twenty-one (21) days to consider this Agreement (although Employee
may choose to voluntarily execute this Agreement earlier); (d) Employee has seven (7) days
following the signing of this Agreement by the parties to revoke the Agreement; and (e) this
Agreement shall not be effective until the date upon which the revocation period has expired, which
shall be the eighth day after this Agreement is executed by the Employee.



5. Severability. If any provision of this Release or the application thereof to any person or
circumstance shall to any extent be held to be invalid or unenforceable, the remainder of this
Release and the application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby, and each provision of this
Release shall be valid and enforceable to the fullest extent permitted by law.



6. Headings. The headings in this Release are inserted for convenience of reference only and
shall not in any way affect the meaning or interpretation of this Release.



7. Counterparts. This Release may be executed in one (1) or more identical counterparts, each
of which shall be deemed an original but all of which together shall constitute one (1) and the
same instrument.



8. Entire Agreement. This Release and related Employment Agreement constitutes the entire
agreement of the parties in this matter and shall supersede any other agreement between the
parties, oral or written, concerning the same subject matter.



9. Governing Law. This Release shall be governed by, and construed and enforced in accordance
with, the laws of the State of Arizona, without reference to the conflict of laws rules of such
State.



IN WITNESS WHEREOF, Employee and the Company have executed this Release as of the day and year
first above written.




UNIVERSAL TECHNICAL INSTITUTE, INC.




By:




Its:




EMPLOYEE:




Eugene S. Putnam, Jr.




2