# **EXHIBIT 10.22**

 

# **EXECUTIVE EMPLOYMENT AGREEMENT**

 

This Employment Agreement (“Agreement”) is enteredinto as of March 9, 2004 by and between Todd R. Peters, a natural person (“Executive”),and Aftermarket Technology Corp., a Delaware corporation (“ATC”).  As used herein, the “Company” refers to ATCand/or any subsidiary of ATC.  Theparties hereto agree as follows:

 

**1.****             Employmentand Term.**

 

(a)           FullTime and Best Efforts.  Subject tothe terms set forth herein, the Company agrees to employ Executive in a managementcapacity and Executive hereby accepts such employment.  During the term of his employment, Executivewill devote his full time, best efforts and attention to the performance of hisduties hereunder and to the business and affairs of the Company and itssubsidiaries.

 

(b)           Duties.  Executive shall perform such duties for theCompany and its subsidiaries as are customarily associated with a managementposition, consistent with the Bylaws of the Company and as required by theofficer or officers to whom Executive reports.

 

(c)           CompanyPolicies.  The employmentrelationship between the parties shall be governed by the general employmentpolicies and practices of the Company, except that when the terms of thisAgreement differ from or are in conflict with such employment policies andpractices, this Agreement shall control.

 

(d)           Term.  The initial term of employment of Executiveunder this Agreement shall begin as of the date hereof and end on the thirdanniversary the date hereof, subject to the provisions for terminationcontained in Section 5 and renewal contained in Section 1(e).

 

(e)           Renewal.  Unless the Company shall have given Executivenotice that this Agreement shall not be renewed at least 30 days prior to theend of the initial term referred to in Section 1(d), the term of thisAgreement shall be automatically extended for a period of one year, suchprocedure to be followed in each such successive period.

 

**2.****             Compensationand Benefits.**

 

(a)           Salary.  Executive shall receive for services to berendered hereunder an annual base salary of $300,000.00, payable on the Company’sregular payroll dates, subject to increase at the discretion of the Company,and subject to standard withholdings for taxes and social security and thelike.  The Company shall review Executive’ssalary on a periodic basis and may, in its sole discretion, increase Executive’ssalary.

 

(b)           IncentivePlans.  During the term hereof,Executive shall be eligible to participate in any annual incentive bonus planand long-term incentive plan (including, without

 

----

 

limitation, any stock option plan) of the Companygenerally available to Company employees of a level comparable toExecutive.  Such participation shall besubject to and on a basis consistent with the terms, conditions and administrationof any such plan.  Executive understandsthat (i) the Company shall have discretion to determine Executive’s levelof participation in any such plan and (ii) any such plan may be modifiedor eliminated in the Company’s sole discretion in accordance with applicablelaw and the terms of such plan.

 

(c)           Participationin Benefit Plans.  During the termhereof, Executive shall be entitled to participate in any group insurance,hospitalization, medical, dental, health and accident, disability, retirement incomeor similar plan or program of the Company to the extent that he is eligibleunder the general provisions thereof. The Company may, in its discretion and from time to time, establishadditional management benefit programs as it deems appropriate.  Executive understands that any such plans maybe modified or eliminated in the Company’s discretion in accordance withapplicable law.

 

(d)           Vacation.  Executive shall be entitled to a period ofannual paid vacation time equal to the period provided to employees of acomparable level by the Company’s policies and procedures.  The days selected for Executive’s vacationmust be mutually agreeable to the Company and Executive.

 

**3.****             Perquisites.**

 

(a)           Financial Planning/Club Dues Allowance.  Duringeach calendar year during the term hereof, Executive will receive reimbursementfor expenses incurred during such year for (i) personal financial/taxplanning, (ii) estate planning (including legal fees) and (iii) club(*e.g.,* country club, health club, socialclub) dues; *provided, however,* that the reimbursableamount for any such year shall not exceed 2% of Executive’s base salary paidduring such year.

 

(b)           Automobile.  Executive shall beentitled to a monthly automobile allowance, subject to applicable withholding.

 

**4.****             BusinessExpenses.**  Executive shall bereimbursed for documented and reasonable business expenses in connection withthe performance of his duties hereunder.

 

**5.****             Terminationof Employment.**  The date on whichExecutive’s employment by the Company ceases, under any of the followingcircumstances, shall be defined herein as the “Termination Date.”  All capitalized terms used in this Section 5without definition will have the meanings set forth in Section 5(h).

 

2

----

 

(a)           Terminationfor Cause.  The Company may terminateExecutive’s employment at any time for Cause immediately upon written notice toExecutive of the circumstances leading to such termination for Cause.  If Executive’s employment is terminated forCause, Executive shall receive payment for all accrued salary through theTermination Date (which in this event shall be the date upon which notice oftermination is given) and the Earned Benefits. The Company shall have no obligation to pay severance of any kind nor tomake any payment in lieu of notice if Executive is terminated for Cause.

 

(b)           VoluntaryTermination.  Executive mayvoluntarily terminate his employment with the Company at any time upon 30 days’prior written notice.  Within ten daysafter the Termination Date, Executive shall receive payment for all accrued salarythrough the Termination Date and the Earned Benefits, after which no furthercompensation of any kind or severance payment will be payable under thisAgreement.

 

(c)           TerminationUpon Disability.  The Company mayterminate Executive’s employment in the event Executive suffers a disabilitythat renders Executive unable to perform the essential functions of hisposition, even with reasonable accommodation in compliance with the Americanswith Disabilities Act, for three consecutive months within any six monthperiod.  Within ten days after theTermination Date, which in this event shall be the date upon which notice oftermination is given, Executive shall receive payment for all accrued salarythrough the Termination Date and the Earned Benefits, after which no furthercompensation will be payable under this Agreement.  The foregoing shall not affect any rightsthat Executive may have under applicable workers’ compensation laws or any disabilityplan of the Company.

 

(d)           TerminationWithout Cause.  The Company mayterminate Executive’s employment without Cause at any time upon 30 days’ priorwritten notice.  Executive will be deemedto have been terminated without Cause if the Company elects not to renew thisAgreement pursuant to Section 1(e). Within ten days after the Termination Date, Executive shall receivepayment for all accrued salary through the Termination Date and the EarnedBenefits.  In addition

 

(i)            Duringthe 18-month period following the Termination Date the Company will offercontinued medical-related insurance coverage to Executive at the levels and atthe rates applicable from time to time to comparable active employees of theCompany.  Medical-related insurancecoverage includes health, dental, vision and/or cancer.  COBRA continuation coverage eligibility shallcommence as of the day following the end of such 18-month period.  Notwithstanding the above, coverage under theCompany’s group medical plan shall cease on the date (A) Executive failsto pay the required premium on time, (B) Executive becomes eligible forcoverage under Medicare or the group health plan of any other employer, or(C) the Company terminates its group medical plan as to all its employees.

 

(ii)           TheCompany shall pay Executive as severance the following:

 

(A)          If the Termination Dateoccurs other than within 18 months after a Change in Control, an amount equalto (x) 150% of Executive’s annual base salary as in effect immediatelyprior to the Termination Date plus (y) the Prorated Bonus.  The severance called for by clause (x) shallbe paid in equal installments on each of the

 

3

----

 

Company’s regular payroll dates during the 18-monthperiod commencing on the first such payroll date following the Termination Dateand the Prorated Bonus will be paid if and when the Company generally paysbonuses under the IC Plan to its other employees with respect to theTermination Year.

 

(B)           If the Termination Dateoccurs within 18 months after a Change in Control, an amount equal to(x) 150% of Executive’s annual base salary as in effect immediately priorto the Termination Date plus (y) 100% of Executive’s target bonus underthe IC Plan for the Termination Year, plus (z) the Pro Forma Bonus.  The severance shall be paid in a single lumpsum within ten days after the Termination Date.

 

(iii)          TheCompany will pay up to $25,000 of the cost of an executive level individualizedcareer transition program through a professional outplacement firm selected bythe Company if such program is initiated within 30 days after the TerminationDate.

 

If Executive dies after the Termination Date, thepayment or payments due thereafter under Section 5(d)(ii)(A) or (B) shallbe made to Executive’s estate but the benefits provided inSections 5(d)(i) and (iii) shall terminate as of the date of death.  As a condition to receiving the payments andbenefits provided by this Section 5(d) (other than payment for all accruedsalary through the Termination Date and the Earned Benefits, which shall bepayable in any case), Executive shall execute and deliver to the Company on theTermination Date a general release in the form attached hereto asExhibit A.

 

(e)           FundamentalChanges.  If the Company(i) materially diminishes Executive’s duties, authority, responsibility orcompensation without performance justification, or (ii) breaches thisAgreement in any material respect, Executive may terminate his employment, *provided* that Executive has given the Company 30 days’written notice prior to such termination and the Company has not cured suchdiminution or breach, as the case may be, by the end of such 30-dayperiod.  A termination in suchcircumstances shall be treated as a Company termination without Cause andExecutive shall be entitled to the payments and benefits provided in Section 5(d).

 

(f)            NoOther Payments or Benefits.  Exceptas otherwise expressly provided in this Agreement, (i) after theTermination Date Executive will not be entitled to any payments from theCompany and (ii) on the Termination Date Executive’s participation in andcoverage under the Company’s benefit programs (including the ATC RetirementSavings Plan (*i.e.*, the 401(k) plan) and theCompany’s group life and disability insurance plans) shall cease; *provided* that Executive shall retain anyright to convert to individual coverage as permitted under these insuranceplans and to any vested benefits under the 401(k) plan and the Company’s stockoption plans.

 

(g)           Withholding.  Any amounts payable under this Section 5shall be subject to standard withholdings for taxes and social security and thelike.

 

4

----

 

(h)           Definitions.

 

(i)            “*Cause*” means the occurrence or existence of any of thefollowing with respect to Executive, as determined by the Company in its solediscretion:

 

(A)          a material breach byExecutive of (x) his duty not to engage in any transaction thatrepresents, directly or indirectly, self-dealing with the Company or any of itsaffiliates that has not been approved by the Company, or (y) the terms ofhis employment, if in any such case such material breach remains uncured afterthe lapse of 30 days following the date that the Company has given Executivewritten notice thereof;

 

(B)           the material breach byExecutive of any duty referred to in clause (A) above as to which at least onewritten notice has been given pursuant to clause (A);

 

(C)           any act of dishonesty,misappropriation, embezzlement, intentional fraud or similar conduct involvingthe Company or any of its affiliates;

 

(D)          the conviction or theplea of nolo contendere or the equivalent in respect of a felony involvingmoral turpitude;

 

(E)           any intentional damageof a material nature to any property of the Company or any of its affiliates;

 

(F)           the repeatednon-prescription use of any controlled substance or the repeated use of alcoholor any other non-controlled substance that, in the reasonable determination ofthe Company renders Executive unfit to serve in his capacity as an employee ofthe Company or its affiliates; or

 

(G)           failure to perform hisduties in a reasonably satisfactory manner where such failure has continued for30 days following written notice thereof; *provided,however,* that this Section 5(h)(i)(G) shall cease to be ofeffect upon a Change in Control.

 

(ii)           *“Change in Control”* means the first tooccur of the following:

 

(A)          any sale ortransfer or other conveyance, whether direct or indirect, of all orsubstantially all of the assets of the Company, on a consolidated basis, in onetransaction or a series of related transactions, unless, immediately aftergiving effect to such transaction, at least 85% of the total voting powernormally 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 totalvoting power normally entitled to vote in the election of directors of theCompany;

 

(B)           any Personor Group other than an Excluded Person is or becomes the “beneficial owner,”directly or indirectly, of more than 35% of the total voting power in theaggregate of all classes of capital stock of the Company then 

 

5

----

 

outstanding normallyentitled to vote in elections of directors, unless the percentage so owned byan Excluded Person is greater;

(C)           during anyperiod of 12 consecutive months, individuals who at the beginning of such12-month period constituted the Company’s Board of Directors (together with anynew directors whose election by such Board or whose nomination for election bythe shareholders of the Company was approved by a vote of a majority of thedirectors then still in office who were either directors at the beginning ofsuch period or whose election or nomination for election was previously soapproved) cease for any reason to constitute a majority of the Company’s Boardof Directors then in office; or

 

(D)          areorganization, merger or consolidation of the Company the consummation ofwhich results in the outstanding securities of any class of the Company’scapital stock being exchanged for or converted into cash, property and/or adifferent kind of securities, unless, immediately after giving effect to suchtransaction, at least 85% of the total voting power normally entitled to votein the election of directors, managers or trustees, as applicable, of theentity surviving or resulting from such reorganization, merger or consolidationis “beneficially owned” by persons who, immediately prior to the transaction,beneficially owned 100% of the total voting power normally entitled to vote inthe election of directors of the Company.

 

(iii)          *“Earned Benefits”* means any (x) bonusthat is payable to Executive under the IC Plan with respect to the calendaryear preceding the Termination Year but that has not been paid prior to theTermination Date, (y) vacation time that has accrued as of the TerminationDate, and (z) other entitlements to cash payments that have accrued as ofthe Termination Date.

 

(iv)          *“Excluded Person”* has themeaning set forth in that certain Indenture dated as of August 2, 1994 byand among the Company, the Guarantors named therein and American Bank NationalAssociation.

 

(v)           *“IC Plan”* means the Company’s annualincentive compensation plan or similar plan instituted in place of theincentive compensation plan.

 

(vi)          *“Person”**and**“Group”* have the meanings used for purposes of Sections13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, whether ornot such sections apply to the transaction in question.

 

(vii)         *“Pro Forma Bonus”* means (A) thegreater of (x) Executive’s bonus under the IC Plan for the TerminationYear based on the Company’s projected performance for the Termination Year,such projection to be determined by annualizing the performance for thosemonths of the Termination Year that are completed prior to the TerminationDate, or (y) Executive’s target bonus under the IC Plan for theTermination Year multiplied by (B) a fraction (x) the numerator ofwhich is the number of days that have elapsed in the Termination Year throughthe Termination Date and (y) the denominator of which is 365.

 

6

----

 

(viii)        *“Prorated Bonus”* means the bonus, if any,that would have been payable to Executive under the IC Plan with respect to theTermination Year multiplied by a fraction (A) the numerator of which isthe number of days that have elapsed in the Termination Year through theTermination Date and (B) the denominator of which is 365.

 

(ix)           *“Termination Year”* means the calendar yearin which the Termination Date occurs.

 

**6.****             ProprietaryInformation Obligations.**  Priorto and/or during the term of employment under this Agreement, Executive has hadand/or will have access to and has become and/or will become acquainted withthe confidential and proprietary information of the Business (as defined in Section 8)and the Company and its affiliates, including but not limited to confidentialand proprietary information or plans regarding customer relationships;personnel; sales, marketing, and financial operations and methods; tradesecrets; formulas; devices; secret inventions; processes and other compilationsof information, records, and specifications (collectively “ProprietaryInformation”).  Executive shall notdisclose any of the Proprietary Information directly or indirectly, or use itin any way, either during the term of this Agreement, or at any timethereafter, except as required in the course of his employment hereunder or asauthorized in writing by the Company. All files, records, documents, computer-recorded information, drawings,specifications, equipment and similar items relating to the Business or theCompany or its affiliates, whether prepared by Executive or otherwise cominginto his possession prior to or during the term of this Agreement, shall remainthe exclusive property of the Company or such affiliate and shall not beremoved from the premises of the Company or its affiliate under any circumstanceswhatsoever without the prior written consent of the Company, except when (andonly for the period) necessary to carry out Executive’s duties hereunder, andif removed shall be immediately returned upon any termination of his employmentand no copies thereof shall be kept by Executive.

 

**7.****             Noninterference.**  While employed by the Company and for aperiod of three years thereafter, Executive shall not, without the priorwritten consent of the Company, interfere with the Company or any of itsaffiliates by directly or indirectly soliciting, attempting to solicit,inducing, or otherwise causing or assisting any person who is then employed bythe Company or any of its affiliates to terminate such employment in order tobecome an employee, consultant or independent contractor to or for any employerother than the Company or such affiliate.

 

**8.****             Noncompetition.**  Executive agrees that during the term of thisAgreement and for a period of 24 months after the termination hereof, he willnot, without the prior consent of the Company, directly or indirectly, have aninterest in, be employed by, be connected with, or have an interest in (as anemployee (whether full-time, part-time or temporary), consultant, officer,director, partner, stockholder, joint venturer, promoter or lender), any personor entity owning, managing, controlling, operating or otherwise participatingor assisting in any business that is either (i) similar to the Business(or any portion thereof) and would benefit from the disclosure of the Company’strade secrets or (ii) in competition with the Business (or any portionthereof) in any of the 50 states in the United States of America; *provided, however*, that the foregoing shall not preventExecutive from being a stockholder of less than 1% of the issued andoutstanding securities of any class of a corporation listed on a nationalsecurities exchange or designated as national market system securities on aninterdealer quotation system by the

 

7

----

 

National Association of Securities Dealers, Inc.  Without limiting the generality of theforegoing, a business will be deemed to be in competition with the Business ata given point in time if any of the customers of such business were customersof the Business at any time during the 18 months preceding the time inquestion.  As used herein, “Business”means the Company’s businesses of remanufacturing and distributing drive trainand electronic products used in the repair of vehicles and providing valueadded warehouse and distribution services, return material reclamation anddisposition services.

 

**9.****             Remedies.**  Executive acknowledges that a breach orthreatened breach by Executive of any the provisions of Sections 6, 7 or 8will result in the Business and the Company and its affiliates sufferingirreparable harm that cannot be calculated or fully or adequately compensatedby recovery of damages alone. Accordingly, Executive agrees that the Company shall be entitled tointerim, interlocutory and permanent injunctive relief, specific performanceand other equitable remedies, in addition to any other relief to which theCompany may become entitled should there be such a breach or threatened breach.

 

**10.****          Miscellaneous.**

 

(a)           Notices.  Any notices provided hereunder must be inwriting and shall be deemed effective upon the earlier of (i) personaldelivery (including personal delivery by telecopy, if a copy is sent by mail orovernight delivery), (ii) the business day following being sent through anovernight delivery service, or (iii) the third business day after mailingby first class mail to the recipient at the address indicated below:

 

To the Company:

 

AftermarketTechnology Corp.One Oak Hill Center, Suite 400Westmont, IL 60559Attention:         Chief Executive OfficerFacsimile:          (630) 455-0630

 

To Executive:

 

Todd R. Peters3606 Lakeshore DriveWaterford, MI 48329

 

or to such other address or to the attention of suchother person as the recipient party will have specified by prior written noticeto the sending party.

 

(b)           Severability. The provisions of this Agreement are severable and, if any court ofcompetent jurisdiction determines that any provision contained in thisAgreement shall, for any reason, be invalid, illegal or unenforceable in anyrespect, such invalidity, illegality or unenforceability shall not affect anyother provision of this Agreement, and this Agreement shall be reformed andconstrued so that such invalid or illegal or unenforceable provision would bevalid, legal and enforceable to the maximum extent possible.

 

8

----

 

(c)           EntireAgreement.  This Agreementconstitutes the full and complete understanding and agreement of the partieswith respect to the subject matter hereof and supersedes all prior oral and writtenand contemporaneous oral understandings and agreements with respect to thesubject matter hereof.

 

(d)           Counterparts.  This Agreement may be executed on separatecounterparts, any one of which need not contain signatures of more than oneparty, but all of which taken together will constitute one and the sameagreement.

 

(e)           Successorsand Assigns.  This Agreement isintended to bind and inure to the benefit of and be enforceable by Executiveand the Company, and their respective successors and assigns, except thatExecutive may not delegate any of his duties hereunder and he may not assignany of his rights hereunder without the prior written consent of the Company.

 

(f)            Attorney’sFees.  If any legal proceeding isnecessary to enforce or interpret the terms of this Agreement, or to recoverdamages for breach therefore, the prevailing party shall be entitled toreasonable attorney’s fees, as well as costs and disbursements, in addition toany other relief to which he or it may be entitled.

 

(g)           Amendments;No Waivers.  Any provision of thisAgreement may be amended or waived if such amendment or waiver is in writingand signed, in the case of an amendment, by all parties hereto, and in the caseof a waiver, by the party against whom the waiver is to be effective.  No waiver by a party of any breach of thisAgreement shall be deemed to extend to any prior or subsequent breach or affectin any way any rights arising by virtue of any prior or subsequent breach.  No failure or delay by a party in exercisingany right, power or privilege hereunder shall operate as a waiver thereof norshall any single or partial exercise thereof preclude any other or furtherexercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shallbe cumulative and not exclusive of any rights or remedies provided by law.

 

(h)           Governing Law and Venue.  ThisAgreement shall be governed by and construed and enforced in accordance withthe internal laws (without reference to choice or conflict of laws) of the State of Illinois.  The parties to this Agreement herebyirrevocably consent to the exclusive venue and jurisdiction of the state andfederal courts sitting in the State of Illinois for any matter or controversyconcerning either the existence or enforcement of this Agreement and herebywaive any contention that Illinois is an improper or inconvenient forum.

 

(i)            Construction.  The captions herein are included forconvenience of reference only and shall be ignored in the construction orinterpretation hereof.  Neither partyhereto, nor its respective counsel, shall be deemed the drafter of thisAgreement, and all provisions of this Agreement shall be construed inaccordance with their fair meaning, and not strictly for or against eitherparty hereto.

 

9

----

 

IN WITNESS WHEREOF, the parties have executed thisAgreement effective as of the date first above written.

 

 
|   |   | /s/ Todd R. Peters            |
|--------|--------|-------------------------------|
|   |   | Todd R. Peters                |
|   |   |                          |
|   |   |                          |
|   |   | AFTERMARKET  TECHNOLOGY CORP. |
|   |   |                          |
|   |   |                          |
|   |   | By:                           |   | /s/ Donald T.  Johnson, Jr |
|   |   |                          |   | Donald  T. Johnson, Jr. |
|   |   |                          | President and Chief Executive Officer |

 

10

----