EXHIBIT 10.22


 


EXECUTIVE EMPLOYMENT AGREEMENT


 


This Employment Agreement (“Agreement”) is entered
into 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 ATC
and/or any subsidiary of ATC.  The
parties hereto agree as follows:


 


1.             Employment
and Term.


 


(a)           Full
Time and Best Efforts.  Subject to
the terms set forth herein, the Company agrees to employ Executive in a management
capacity and Executive hereby accepts such employment.  During the term of his employment, Executive
will devote his full time, best efforts and attention to the performance of his
duties hereunder and to the business and affairs of the Company and its
subsidiaries.


 


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


 


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


 


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


 


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


 


2.             Compensation
and Benefits.


 


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


 


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


 





















 


limitation, any stock option plan) of the Company
generally available to Company employees of a level comparable to
Executive.  Such participation shall be
subject to and on a basis consistent with the terms, conditions and administration
of any such plan.  Executive understands
that (i) the Company shall have discretion to determine Executive’s level
of participation in any such plan and (ii) any such plan may be modified
or eliminated in the Company’s sole discretion in accordance with applicable
law and the terms of such plan.


 


(c)           Participation
in Benefit Plans.  During the term
hereof, Executive shall be entitled to participate in any group insurance,
hospitalization, medical, dental, health and accident, disability, retirement income
or similar plan or program of the Company to the extent that he is eligible
under the general provisions thereof. 
The Company may, in its discretion and from time to time, establish
additional management benefit programs as it deems appropriate.  Executive understands that any such plans may
be modified or eliminated in the Company’s discretion in accordance with
applicable law.


 


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


 


3.             Perquisites.


 


(a)           Financial Planning/Club Dues Allowance.  During
each calendar year during the term hereof, Executive will receive reimbursement
for expenses incurred during such year for (i) personal financial/tax
planning, (ii) estate planning (including legal fees) and (iii) club
(e.g., country club, health club, social
club) dues; provided, however, that the reimbursable
amount for any such year shall not exceed 2% of Executive’s base salary paid
during such year.


 


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


 


4.             Business
Expenses.  Executive shall be
reimbursed for documented and reasonable business expenses in connection with
the performance of his duties hereunder.


 


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


 


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


 


(b)           Voluntary
Termination.  Executive may
voluntarily terminate his employment with the Company at any time upon 30 days’
prior written notice.  Within ten days
after the Termination Date, Executive shall receive payment for all accrued salary
through the Termination Date and the Earned Benefits, after which no further
compensation of any kind or severance payment will be payable under this
Agreement.


 


(c)           Termination
Upon Disability.  The Company may
terminate Executive’s employment in the event Executive suffers a disability
that renders Executive unable to perform the essential functions of his
position, even with reasonable accommodation in compliance with the Americans
with Disabilities Act, for three consecutive months within any six month
period.  Within ten days after the
Termination Date, which in this event shall be the date upon which notice of
termination is given, Executive shall receive payment for all accrued salary
through the Termination Date and the Earned Benefits, after which no further
compensation will be payable under this Agreement.  The foregoing shall not affect any rights
that Executive may have under applicable workers’ compensation laws or any disability
plan of the Company.


 


(d)           Termination
Without Cause.  The Company may
terminate Executive’s employment without Cause at any time upon 30 days’ prior
written notice.  Executive will be deemed
to have been terminated without Cause if the Company elects not to renew this
Agreement pursuant to Section 1(e). 
Within ten days after the Termination Date, Executive shall receive
payment for all accrued salary through the Termination Date and the Earned
Benefits.  In addition


 


(i)            During
the 18-month period following the Termination Date the Company will offer
continued medical-related insurance coverage to Executive at the levels and at
the rates applicable from time to time to comparable active employees of the
Company.  Medical-related insurance
coverage includes health, dental, vision and/or cancer.  COBRA continuation coverage eligibility shall
commence as of the day following the end of such 18-month period.  Notwithstanding the above, coverage under the
Company’s group medical plan shall cease on the date (A) Executive fails
to pay the required premium on time, (B) Executive becomes eligible for
coverage 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)           The
Company shall pay Executive as severance the following:


 


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


 


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


 


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


 


(iii)          The
Company will pay up to $25,000 of the cost of an executive level individualized
career transition program through a professional outplacement firm selected by
the Company if such program is initiated within 30 days after the Termination
Date.


 


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


 


(e)           Fundamental
Changes.  If the Company
(i) materially diminishes Executive’s duties, authority, responsibility or
compensation without performance justification, or (ii) breaches this
Agreement 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 such
diminution or breach, as the case may be, by the end of such 30-day
period.  A termination in such
circumstances shall be treated as a Company termination without Cause and
Executive shall be entitled to the payments and benefits provided in Section 5(d).


 


(f)            No
Other Payments or Benefits.  Except
as otherwise expressly provided in this Agreement, (i) after the
Termination Date Executive will not be entitled to any payments from the
Company and (ii) on the Termination Date Executive’s participation in and
coverage under the Company’s benefit programs (including the ATC Retirement
Savings Plan (i.e., the 401(k) plan) and the
Company’s group life and disability insurance plans) shall cease; provided that Executive shall retain any
right to convert to individual coverage as permitted under these insurance
plans and to any vested benefits under the 401(k) plan and the Company’s stock
option plans.


 


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


 


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(h)           Definitions.


 


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


 


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


 


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


 


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


 


(D)          the conviction or the
plea of nolo contendere or the equivalent in respect of a felony involving
moral turpitude;


 


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


 


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


 


(G)           failure to perform his
duties in a reasonably satisfactory manner where such failure has continued for
30 days following written notice thereof; provided,
however, that this Section 5(h)(i)(G) shall cease to be of
effect upon a Change in Control.


 


(ii)           “Change in Control” means the first to
occur of the following:


 


(A)          any sale or
transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Company, on a consolidated basis, in one
transaction or a series of related transactions, unless, immediately after
giving effect to such transaction, at least 85% of the total voting power
normally entitled to vote in the election of directors, managers or trustees,
as applicable, of the transferee is “beneficially owned” by persons who,
immediately prior to the transaction, beneficially owned 100% of the total
voting power normally entitled to vote in the election of directors of the
Company;


 


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


 


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outstanding normally
entitled to vote in elections of directors, unless the percentage so owned by
an Excluded Person is greater;


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


 


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


 


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


 


(iv)          “Excluded Person” has the
meaning set forth in that certain Indenture dated as of August 2, 1994 by
and among the Company, the Guarantors named therein and American Bank National
Association.


 


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


 


(vi)          “Person”  and  “Group” have the meanings used for purposes of Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, whether or
not such sections apply to the transaction in question.


 


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


 


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


 


(ix)           “Termination Year” means the calendar year
in which the Termination Date occurs.


 


6.             Proprietary
Information Obligations.  Prior
to and/or during the term of employment under this Agreement, Executive has had
and/or will have access to and has become and/or will become acquainted with
the confidential and proprietary information of the Business (as defined in Section 8)
and the Company and its affiliates, including but not limited to confidential
and proprietary information or plans regarding customer relationships;
personnel; sales, marketing, and financial operations and methods; trade
secrets; formulas; devices; secret inventions; processes and other compilations
of information, records, and specifications (collectively “Proprietary
Information”).  Executive shall not
disclose any of the Proprietary Information directly or indirectly, or use it
in any way, either during the term of this Agreement, or at any time
thereafter, except as required in the course of his employment hereunder or as
authorized in writing by the Company. 
All files, records, documents, computer-recorded information, drawings,
specifications, equipment and similar items relating to the Business or the
Company or its affiliates, whether prepared by Executive or otherwise coming
into his possession prior to or during the term of this Agreement, shall remain
the exclusive property of the Company or such affiliate and shall not be
removed from the premises of the Company or its affiliate under any circumstances
whatsoever without the prior written consent of the Company, except when (and
only for the period) necessary to carry out Executive’s duties hereunder, and
if removed shall be immediately returned upon any termination of his employment
and no copies thereof shall be kept by Executive.


 


7.             Noninterference.  While employed by the Company and for a
period of three years thereafter, Executive shall not, without the prior
written consent of the Company, interfere with the Company or any of its
affiliates by directly or indirectly soliciting, attempting to solicit,
inducing, or otherwise causing or assisting any person who is then employed by
the Company or any of its affiliates to terminate such employment in order to
become an employee, consultant or independent contractor to or for any employer
other than the Company or such affiliate.


 


8.             Noncompetition.  Executive agrees that during the term of this
Agreement and for a period of 24 months after the termination hereof, he will
not, without the prior consent of the Company, directly or indirectly, have an
interest in, be employed by, be connected with, or have an interest in (as an
employee (whether full-time, part-time or temporary), consultant, officer,
director, partner, stockholder, joint venturer, promoter or lender), any person
or entity owning, managing, controlling, operating or otherwise participating
or 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’s
trade secrets or (ii) in competition with the Business (or any portion
thereof) in any of the 50 states in the United States of America; provided, however, that the foregoing shall not prevent
Executive from being a stockholder of less than 1% of the issued and
outstanding securities of any class of a corporation listed on a national
securities exchange or designated as national market system securities on an
interdealer quotation system by the


 


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


 


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


 


10.          Miscellaneous.


 


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


 


To the Company:


 


Aftermarket
Technology Corp.

One Oak Hill Center, Suite 400

Westmont, IL 60559

Attention:         Chief Executive Officer

Facsimile:          (630) 455-0630


 


To Executive:


 


Todd R. Peters

3606 Lakeshore Drive

Waterford, MI 48329


 


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


 


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


 


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(c)           Entire
Agreement.  This Agreement
constitutes the full and complete understanding and agreement of the parties
with respect to the subject matter hereof and supersedes all prior oral and written
and contemporaneous oral understandings and agreements with respect to the
subject matter hereof.


 


(d)           Counterparts.  This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.


 


(e)           Successors
and Assigns.  This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive
and the Company, and their respective successors and assigns, except that
Executive may not delegate any of his duties hereunder and he may not assign
any of his rights hereunder without the prior written consent of the Company.


 


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


 


(g)           Amendments;
No Waivers.  Any provision of this
Agreement may be amended or waived if such amendment or waiver is in writing
and signed, in the case of an amendment, by all parties hereto, and in the case
of a waiver, by the party against whom the waiver is to be effective.  No waiver by a party of any breach of this
Agreement shall be deemed to extend to any prior or subsequent breach or affect
in any way any rights arising by virtue of any prior or subsequent breach.  No failure or delay by a party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.


 


(h)           Governing Law and Venue.  This
Agreement shall be governed by and construed and enforced in accordance with
the internal laws (without reference to choice or conflict of laws) of the State of Illinois.  The parties to this Agreement hereby
irrevocably consent to the exclusive venue and jurisdiction of the state and
federal courts sitting in the State of Illinois for any matter or controversy
concerning either the existence or enforcement of this Agreement and hereby
waive any contention that Illinois is an improper or inconvenient forum.


 


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


 


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IN WITNESS WHEREOF, the parties have executed this
Agreement 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

  



 


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