exv10w1






Exhibit 10.1




AMENDED AND RESTATED EMPLOYMENT AGREEMENT



This Amended and Restated Employment Agreement (this “AGREEMENT”), dated as of December 31, 2008,
is entered into by and between MOTORCAR PARTS OF AMERICA, INC., a New York corporation formerly
known as MOTORCAR PARTS & ACCESSORIES, INC. and currently having an address at 2929 California
Street, Torrance, California 90503 (the “COMPANY”), and Selwyn Joffe, an individual residing at
2687 Cordelia Road, Los Angeles, California 90049 (“EXECUTIVE”).




WITNESSETH:



WHEREAS, the COMPANY and EXECUTIVE have previously entered into an Employment Agreement dated as of
February 14, 2003, which was subsequently amended by that certain Amendment No. 1 dated as of
April 22, 2005, Amendment No. 2 dated as of October 31, 2006 and Amendment No. 3 dated as of
March 27, 2008 (as amended, the “Original Agreement”), pursuant to which the COMPANY employed
EXECUTIVE as its Chairman of the Board, President and Chief Executive Officer; and



WHEREAS, the COMPANY and EXECUTIVE desire to amend and restate the Original Agreement and to
continue to employ EXECUTIVE as the COMPANY’S Chairman of the Board, President and Chief Executive
officer upon the terms and subject to the conditions contained herein.



NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:





	1.	 	EMPLOYMENT. Subject to and upon the terms and conditions contained in this AGREEMENT, the
COMPANY hereby agrees to employ EXECUTIVE and EXECUTIVE agrees to be employed by the COMPANY,
for the period set forth in Paragraph 2 hereof, to render the services to the COMPANY, its
affiliates and/or subsidiaries as described in Paragraph 3 hereof.
	 
	2.	 	TERM. EXECUTIVE’S term of employment under this AGREEMENT shall commence on the
COMMENCEMENT DATE and shall continue for a period through and including August 31, 2012 (the
“EMPLOYMENT TERM”), unless extended in writing by both parties or earlier terminated pursuant
to the terms and conditions set forth herein.
	 
	3.	 	DUTIES.






	 	(a)	 	EXECUTIVE shall be employed as the COMPANY’S Chairman of the
Board, President and Chief Executive Officer and shall report to the COMPANY’S
Board of Directors. It is agreed that EXECUTIVE shall perform his service in
the COMPANY’S Torrance, California, facilities, or any other facilities
mutually agreeable to the parties.




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	 	(b)	 	EXECUTIVE agrees to abide by all By-Laws and applicable
policies of the Company promulgated from time to time by the Board of Directors
of the COMPANY and its constituent committees (together with its appropriate
committees, the “BOARD OF DIRECTORS”).






	4.	 	EXCLUSIVE SERVICES AND BEST EFFORTS. EXECUTIVE shall devote all of his working time,
attention, best efforts and ability to the service of the COMPANY, its affiliates and
subsidiaries during the term of this AGREEMENT; provided that the foregoing shall not prohibit
EXECUTIVE from serving on the boards of directors of any other company, whether for-profit or
not-for-profit.
	 
	5.	 	COMPENSATION. As compensation for his services and covenants hereunder, the COMPANY shall
pay EXECUTIVE the following:






	 	(a)	 	Base Salary; Benefits. The COMPANY shall pay EXECUTIVE
a base salary (“SALARY”) of Five Hundred Thousand Dollars ($500,000) per year.
The EXECUTIVE shall receive such additional benefits as are usually provided
from time to time to senior executives of the COMPANY.
	 
	 	(b)	 	Bonus. EXECUTIVE shall participate in the COMPANY’S
Executive Bonus Program as adopted and amended from time to time by the
COMPANY’S Board of Directors.
	 
	 	(c)	 	Stock Options. As additional consideration for the
services performed by EXECUTIVE, the COMPANY has granted EXECUTIVE options to
purchase shares of the COMPANY’S common stock and may in the future grant
EXECUTIVE additional options (collectively, all options granted to EXECUTIVE by
the COMPANY at any time before or after the date hereof are referred to herein
as the “OPTIONS”). Upon the termination of this AGREEMENT for any reason other
than termination by the COMPANY for Cause or termination by EXECUTIVE without
Good Reason, any OPTIONS which are not fully vested shall immediately vest and
remain exercisable by EXECUTIVE for a period of two years or, if shorter, until
the ten year anniversary of the date of grant of each such OPTION.
	 
	 	(d)	 	Certain Transaction Fees. In the event of one or more
“PROPOSED TRANSACTIONS” (as defined in Exhibit A hereto) occurring during the
term of this AGREEMENT, EXECUTIVE shall receive, as additional compensation
with respect to each PROPOSED TRANSACTION, a fee as set forth in Exhibit A
hereto (the “TRANSACTION FEES”).






	6.	 	BUSINESS EXPENSES. EXECUTIVE shall be reimbursed for, and entitled to advances (subject to
repayment to the COMPANY if not actually incurred by EXECUTIVE) with respect to, only those
business expenses incurred by him which are reasonable and




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	 	 	necessary for EXECUTIVE to perform
his duties under this AGREEMENT in accordance with policies established from time to time by
the COMPANY.
	 
	7.	 	EXECUTIVE BENEFITS.






	 	(a)	 	EXECUTIVE shall be entitled to four weeks paid vacation each
year during the EMPLOYMENT TERM.
	 
	 	(b)	 	The COMPANY may withhold from any benefits payable to EXECUTIVE
all federal, state, local and other taxes and amounts as shall be required
pursuant to law, rule or regulation. All of the benefits to which EXECUTIVE
may be entitled which are not specifically described herein may be changed from
time to time or withdrawn at any time in the sole discretion of the COMPANY, so
long as any such change or withdrawal are applicable to all of the relevant
COMPANY executives and to the relevant executives of any company which may
control the COMPANY.
	 
	 	(c)	 	During the EMPLOYMENT TERM the COMPANY shall provide to
EXECUTIVE an automobile allowance in the amount of Fifteen Hundred Dollars
($1500.00) per month, payable monthly. In addition, all costs of operating the
automobile, including fuel, oil, insurance, repairs, maintenance and other
expenses, shall be the responsibility of the COMPANY.
	 
	 	(d)	 	During the EMPLOYMENT TERM, if EXECUTIVE does not elect medical
insurance coverage for himself and his eligible family through the COMPANY, he
shall receive as an allowance for such medical insurance an amount equal to the
then cost which would be incurred by the COMPANY in supplying such coverage for
EXECUTIVE and his eligible family.






	8.	 	DEATH AND DISABILITY.






	 	(a)	 	The EMPLOYMENT TERM shall terminate on the date of EXECUTIVE’S
death, in which event EXECUTIVE’S accrued SALARY, BONUS and TRANSACTION FEES,
if any, reimbursable expenses and
benefits, including accrued but unused vacation time, owing to EXECUTIVE
through the date of EXECUTIVE’S death, shall be paid to the EXECUTIVE’S
estate, and EXECUTIVE’S estate shall assume EXECUTIVE’S rights under the
1994 Stock Option Plan and the related rights under this AGREEMENT.
EXECUTIVE’S estate will not be entitled to any other compensation upon
termination of this AGREEMENT pursuant to this Paragraph 8(a).
	 
	 	(b)	 	If, during the EMPLOYMENT TERM, in the opinion of a duly
licensed physician selected by COMPANY and reasonably acceptable to the
EXECUTIVE, EXECUTIVE, because of physical or mental illness or




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	 	 	 	incapacity,
shall become substantially unable to perform the duties and services required
of him under this AGREEMENT for a period of 180 consecutive days, the COMPANY
may, upon at least ten days’ prior written notice given at any time after the
expiration of such 180-day period to EXECUTIVE of its intention to do so,
terminate this AGREEMENT as of such date as may be set forth in the notice. In
case of such termination, EXECUTIVE shall be entitled to receive his accrued
SALARY, BONUS and TRANSACTION FEES, if any, reimbursable expenses and benefits
owing to EXECUTIVE through the date of termination. In addition, EXECUTIVE
shall be entitled to receive the benefits payable pursuant to the POLICY
described in Paragraph 8(c) below. EXECUTIVE will not be entitled to any other
compensation upon termination of this AGREEMENT pursuant to this
Paragraph 8(b).
	 
	 	(c)	 	During the EMPLOYMENT TERM, the COMPANY will pay EXECUTIVE
$24,000 per annum to be used by EXECUTIVE to purchase disability insurance for
EXECUTIVE’S benefit.






	9.	 	TERMINATION.






	 	(a)	 	The COMPANY may terminate the employment of EXECUTIVE for Cause
(as hereinafter defined); provided, however, that such termination shall only
become effective if the COMPANY (acting upon duly adopted resolutions of the
Board) shall first give EXECUTIVE written notice of the material breach or
default, which notice shall (i) identify in reasonable detail the manner in
which the COMPANY believes that EXECUTIVE has breached or defaulted under this
AGREEMENT or in the performance of his duties and (ii) indicate the steps
required to cure such breach or default, and EXECUTIVE shall fail within 20
business days after receipt of such notice to substantially remedy or correct
the same. Upon any such termination, the COMPANY shall be released from any
and all further obligations under this AGREEMENT, except that the COMPANY shall
be obligated to pay EXECUTIVE his accrued SALARY, BONUS and TRANSACTION FEES,
if any, reimbursable expenses and benefits owing to EXECUTIVE through the day
on which EXECUTIVE is terminated.
EXECUTIVE will not be entitled to any other compensation upon termination of
this AGREEMENT pursuant to this Paragraph 9(a).
	 
	 	(b)	 	As used in this AGREEMENT, the term “Cause” shall mean:
(i) the willful failure of EXECUTIVE to perform his duties pursuant to
Paragraph 3 hereof, which failure is not cured by EXECUTIVE as described in
subparagraph (a) above, or (ii) the commission by EXECUTIVE of an act involving
moral turpitude, dishonesty, theft or fraudulent business conduct in connection
with EXECUTIVE’S performance of his duties for COMPANY.




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	 	(c)	 	EXECUTIVE may voluntarily terminate this AGREEMENT for Good
Reason. For purposes of this AGREEMENT, “Good Reason” shall mean: (i) any
reduction of EXECUTIVE’S title, status, authority, responsibilities or
compensation; (ii) relocation of EXECUTIVE’S principal place of work by a
distance of 50 miles or more; or (iii) the COMPANY’S breach of this AGREEMENT.
Following the occurrence of any Good Reason, EXECUTIVE may voluntarily
terminate this AGREEMENT if the circumstances constituting the Good Reason have
not been cured within 30 days after EXECUTIVE provides written notice thereof
to the COMPANY.
	 
	 	(d)	 	If EXECUTIVE shall voluntarily terminate this AGREEMENT
pursuant to the provisions of Paragraph 9(c) or if the COMPANY shall terminate
EXECUTIVE without Cause, then the COMPANY shall pay EXECUTIVE’S SALARY (at the
annual rate in effect immediately prior to the Termination Date), EXECUTIVE’S
average bonus earned for the two years immediately prior to the year in which
this AGREEMENT is so terminated or, if such termination occurs within the first
three months of the COMPANY’S fiscal year, for the second and third years
preceding the year in which such termination occurs (in either case, payable by
no later than January 31 of each year), and all benefits identified in
Paragraphs 7 and 8(c) (including without limitation EXECUTIVE’S automobile
allowance) through the later of that date which is two years after the
Termination Date or August 31, 2012. The COMPANY shall also pay EXECUTIVE any
accrued TRANSACTION FEES and any reimbursable expenses owed to EXECUTIVE
through the Termination Date. For the purposes of the foregoing payments, the
foregoing annual SALARY rate shall be the rate paid to EXECUTIVE without regard
to any purported reduction or attempted reduction of such rate by the COMPANY.
EXECUTIVE shall not be required to mitigate the amount of any payment provided
for in this Paragraph 9 by seeking employment or otherwise, nor shall the
amount of any payment or benefit provided for in this Paragraph 9 be reduced by
any compensation earned by EXECUTIVE as the result of consultancy with or
employment by another entity, by retirement benefits, by offset against any
amount claimed to be owed by EXECUTIVE to the COMPANY, or otherwise.
	 
	 	(e)	 	For purposes of this AGREEMENT, a “Change in Control” shall
have occurred if:






	 	(i)	 	any “person,” as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (other than the COMPANY, any trustee or
other fiduciary holding securities under an employee benefit plan of
the COMPANY, any corporation owned, directly or indirectly, by the
stockholders of the COMPANY in substantially the same proportions as
their ownership of stock of the COMPANY, Mel




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	 	 	 	Marks, Richard Marks or
any affiliate or family relative of either of them, or any trust for
the benefit thereof), individually or as a group, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the COMPANY representing more
than 50% of the combined voting power of the COMPANY’S then outstanding
securities;
	 
	 	(ii)	 	the shareholders of the COMPANY approve a
merger or consolidation of the COMPANY with any other corporation,
other than (A) a merger or a consolidation which would result in the
voting securities of the COMPANY outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50%
of the combined voting power of the voting securities of the COMPANY or
such surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the COMPANY (or similar transaction) in which no
“person” (as hereinabove defined) acquires more than 50% of the
combined voting power of the COMPANY’S then outstanding securities; or
	 
	 	(iii)	 	the shareholders of the COMPANY approve an
agreement for the sale or disposition by the COMPANY of all or
substantially all of the COMPANY’S assets.






	 	(f)	 	If a Change in Control of the COMPANY shall occur, then
EXECUTIVE shall be entitled to receive a “Sale Bonus” equal to the sum of
(i) two times EXECUTIVE’S SALARY (at the annual rate in effect immediately
prior to the date of the Change in Control), plus (ii) two times EXECUTIVE’S
average bonus earned for the two years immediately prior to the year in which
the Change in Control occurs. For the purposes of the foregoing payments, the
foregoing annual SALARY rate shall be the rate paid to EXECUTIVE without regard
to any purported reduction or attempted reduction of such rate by the COMPANY.
The Sale Bonus shall be paid to EXECUTIVE in a lump sum on the closing date of
the Change in Control transaction.
	 
	 	(g)	 	If a Change in Control shall occur, then EXECUTIVE shall have
the right to voluntarily terminate this AGREEMENT with effect on or after the
one year anniversary of the Change in Control upon the giving of at least 90
days’ prior written notice to the COMPANY delivered at any time. In such
event, the COMPANY shall pay EXECUTIVE’S SALARY (at the annual rate in effect
immediately prior to the Termination Date), EXECUTIVE’S average bonus earned
for the two years immediately prior to the year in which EXECUTIVE terminates
this AGREEMENT (payable by no later than January 31 of each year), and all
benefits




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	 	 	 	identified in Paragraphs 7 and 8(c) (including without limitation
EXECUTIVE’S automobile allowance) through that date which is one year after the
Termination Date. The COMPANY shall also pay EXECUTIVE any accrued TRANSACTION
FEES and any reimbursable expenses owed to EXECUTIVE through the Termination
Date. EXECUTIVE shall not be required to mitigate the amount of any payment
provided for in this Paragraph 9 by seeking employment or otherwise, nor shall
the amount of any payment or benefit provided for in this Paragraph 9 be
reduced by any compensation earned by EXECUTIVE as the result of consultancy
with or employment by another entity, by retirement benefits, by offset against
any amount claimed to be owed by EXECUTIVE to the COMPANY, or otherwise.
	 
	 	(h)	 	In the event that the benefits provided for in this Agreement
or otherwise payable to EXECUTIVE constitute “parachute payments” within the
meaning of Section 280G of the Internal Revenue Code (the “Code”) and will be
subject to the excise tax imposed by Section 4999 of the Code, then EXECUTIVE
shall receive: (i) a payment from the COMPANY sufficient to pay the excise
tax, if any, incurred with respect to the first Three Million Dollars
($3,000,000) of such parachute payments, and (ii) an additional payment from
the COMPANY (the “gross-up”) sufficient to pay the excise tax and federal and
state income taxes arising from the payments by the COMPANY to EXECUTIVE
pursuant to this sentence. By way of example, if the aggregate amount of
“parachute payments” (within the meaning of Section 280G of the Code) paid to
EXECUTIVE is Three Million Five Hundred Thousand Dollars ($3,500,000) and
EXECUTIVE’S “base amount” (within the meaning of Section 280G of the Code) is
Seven Hundred Fifty Thousand Dollars ($750,000), then the COMPANY shall pay the
excise tax and gross-up on Two Million Two Hundred Fifty Thousand Dollars
($3,000,000 — $750,000 = $2,250,000) since no excise tax would be payable on
the first Seven Hundred Fifty Thousand Dollars ($750,000) and EXECUTIVE would
be responsible to pay the excise tax on the Five Hundred Thousand Dollars
($500,000) in excess of Three Million Dollars ($3,000,000). The determination
of EXECUTIVE’S excise tax liability and the amount, if any, required to be paid
to EXECUTIVE under this Paragraph 9(h) shall be made in writing by the
COMPANY’S independent auditors (the “Accountants”). For purposes of making the
calculations required by this
Paragraph 9(h), the Accountants 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. The COMPANY and EXECUTIVE shall furnish to the Accountants
such information and documents as the Accountants may reasonably request in
order to make a determination under this Paragraph. The COMPANY shall bear
all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Paragraph 9(h).




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	 	(i)	 	Section 409A Compliance.






	 	(i)	 	To the fullest extent applicable, amounts and
other benefits payable under this AGREEMENT are intended to be exempt
from the definition of “nonqualified deferred compensation” under
Section 409A of the Code (“Section 409A”) in accordance with one or
more of the exemptions available under the final Treasury regulations
promulgated under Section 409A and, to the extent that any such amount
or benefit is or becomes subject to Section 409A due to a failure to
qualify for an exemption from the definition of nonqualified deferred
compensation in accordance with such final Treasury regulations, this
AGREEMENT is intended to comply with the applicable requirements of
Section 409A with respect to such amounts or benefits. This AGREEMENT
shall be interpreted and administered to the extent possible in a
manner consistent with the foregoing statement of intent. In this
regard, notwithstanding anything in this AGREEMENT to the contrary, the
following provisions shall apply.
	 
	 	(ii)	 	To the extent that any bonus becomes payable
pursuant to Paragraph 5(b), then such bonus shall be paid no later than
two and one-half months after the end of the COMPANY’S taxable year in
which the bonus was earned (or if later, two and one-half months after
the end of the calendar year in which the bonus was earned). To the
extent that any taxable reimbursement of expenses or benefits becomes
payable pursuant to Paragraphs 6, 7, 8(c), 24 or any other provision of
this AGREEMENT, then such taxable reimbursements shall be paid no later
than March 15 of the calendar year following the calendar year in which
the reimbursed costs were incurred.
	 
	 	(iii)	 	In the event EXECUTIVE becomes entitled to
reimbursement of taxes and a gross-up payment under Paragraph 9(h),
such reimbursement and gross-up payment shall in no event be made later
than December 31 of the year following the year during which the
related taxes are remitted to the Internal Revenue Service, and all
payments to the Accountants pursuant to Paragraph 9(h) shall be made no
later than the end of the calendar
year following the calendar year in which the related work is
performed by the Accountants.
	 
	 	(iv)	 	For purposes of clarification, in the event
EXECUTIVE becomes entitled to receive continued payment of EXECUTIVE’S
SALARY and average bonus following the Termination Date pursuant to
Paragraphs 9(d) or (g), the SALARY shall be payable in accordance with
the COMPANY’S normal payroll procedures through the applicable date
specified in Paragraphs 9(d) or (g), and




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	 	 	 	the average bonus shall be
paid in each month of January occurring through the applicable date
specified in Paragraphs 9(d) or (g).
	 
	 	(v)	 	The Termination Date for purposes of
determining the date that any payment or benefit which is treated as
nonqualified deferred compensation under Section 409A is to be paid or
provided (or in determining whether an exemption to such treatment
applies), and for purposes of determining whether EXECUTIVE is a
Specified Employee (as defined below) on the Termination Date, shall be
the date on which EXECUTIVE has incurred a “separation from service”
within the meaning of Treasury Regulation Section 1.409A-1(h), or in
subsequent IRS guidance under Section 409A.
	 
	 	(vi)	 	If EXECUTIVE is a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code as determined by
the Compensation Committee (“Specified Employee”) on the Termination
Date and, due to the failure of an amount or other benefit that is
payable under this AGREEMENT on account of EXECUTIVE’S “separation from
service,” within the meaning of Section 409A(a)(2)(A)(i) of the Code
(other than a separation from service as a result of EXECUTIVE’S
death), to qualify for any of the exemptions from the definition of
nonqualified deferred compensation available under Section 1.409A-1(b)
of the Treasury Regulations, the COMPANY reasonably determines that
such amount or other benefit constitutes nonqualified deferred
compensation that will subject EXECUTIVE to “additional tax” under
Section 409A(a)(1)(B) of the Code (together with any interest or
penalties imposed with respect to, or in connection with, such tax, a
“409A Tax”) with respect to the payment of such amount or benefit if
paid at the time specified in the AGREEMENT, then notwithstanding any
contrary provision of this AGREEMENT (including the other subparagraphs
of this Paragraph 9(i)), the payment thereof shall be postponed to the
first business day of the seventh month following the Termination Date
or, if earlier, the date of EXECUTIVE’S death (the “Delayed Payment
Date”). In the event that this subparagraph (vi) requires a delay of
any payment, such payment shall be accumulated and paid in a single
lump sum on the Delayed Payment Date together with
interest for the period of delay, compounded monthly, equal to the
prime lending rate then used by CitiBank, N.A., in New York City and
in effect as of the date the payment would otherwise have been
provided and any remaining payments and benefits due under the
AGREEMENT shall be paid in accordance with the normal payment dates
specified for them herein. In the event that this subparagraph
(vi) requires a delay in the provision of any in-kind benefit, then
continuation of such benefit during the delay period is conditioned
on pre-payment by EXECUTIVE to the COMPANY




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	 	 	 	 of the full taxable value
of the benefit, and the COMPANY shall repay EXECUTIVE for the
payments made by EXECUTIVE pursuant to the terms of this sentence on
the Delayed Payment Date.
	 
	 	(vii)	 	Any series of payments (including in-kind
benefits) provided under this AGREEMENT shall for all purposes of
Section 409A be treated as a series of separate payments and not as a
single payment.
	 
	 	(viii)	 	The COMPANY and EXECUTIVE agree to cooperate and work together to
avoid the imposition of a 409A Tax, and may take such other mutually
agreeable actions at such times and in such manners as are permitted
under Section 409A.






	10.	 	DISCLOSURE OF INFORMATION AND RESTRICTIVE COVENANT. EXECUTIVE acknowledges that, by his
employment, he has been and will be in a confidential relationship with the COMPANY and will
have access to confidential information and trade secrets of the COMPANY, its subsidiaries and
affiliates. Confidential information and trade secrets include, but are not limited to,
customer, supplier, and client lists, marketing, distribution and sales strategies and
procedures, operational and equipment techniques, business plans and system, quality control
procedures and systems, special projects and technological research, including projects,
research and reports for any entity or client or any project, research, report or the like
concerning sales or manufacturing or new technology, EXECUTIVE compensation plans and any
other information relating thereto, and any other records, files, drawings, inventions,
discoveries, applications, processes, data, and information concerning the business of the
COMPANY which are not in the public domain. EXECUTIVE agrees that in consideration of the
execution of this AGREEMENT by the COMPANY:






	 	(a)	 	EXECUTIVE will not, during the term of this AGREEMENT or at any
time thereafter, use, or disclose to any third party, trade secrets or
confidential information of the COMPANY, including but not limited to,
confidential information or trade secrets belonging or relating to the COMPANY,
its subsidiaries, affiliates, customers and clients or proprietary processes or
procedures of the COMPANY, its subsidiaries, affiliates, customers and clients.
Proprietary processes and procedures
shall include, but shall not be limited to, all information which is known
or intended to be known only to executives of the COMPANY or others in a
confidential relationship with the COMPANY or its respective subsidiaries
and affiliates which relates to business matters.
	 
	 	(b)	 	EXECUTIVE will not, during the term of this AGREEMENT, directly
or indirectly, under any circumstance other than at the direction and for the
benefit of the COMPANY, engage in or participate in any business activity,
including, but not limit to, acting as a director, franchiser or franchisee,
proprietor, syndicate member, shareholder or creditor or with a




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	 	 	 	person having
any other relationship with any other business, company, firm occupation or
business activity, in any geographic area within the United States that is,
directly or indirectly, competitive with any business completed by the COMPANY
or any of its subsidiaries or affiliates during the term of this AGREEMENT.
Should EXECUTIVE own 5% or less of the issued and outstanding shares of a class
of securities of a corporation the securities of which are traded on a national
securities exchange or in the over-the-counter market, such ownership shall not
cause EXECUTIVE to be deemed a shareholder under this Paragraph 10(b).
	 
	 	(c)	 	EXECUTIVE will not, during the term of this AGREEMENT, on his
behalf or on behalf of any other business enterprise, directly or indirectly,
under any circumstance other than at the direction and for the benefit of the
COMPANY, solicit or induce any creditor, customer, supplier, officer, EXECUTIVE
or agent of the COMPANY or any of its subsidiaries or affiliates to sever its
relationship with or leave the employ of any such entities.
	 
	 	(d)	 	This Paragraph 10 and Paragraphs 11, 12 and 13 hereof shall
survive the expiration or termination of this AGREEMENT for any reason.
	 
	 	(e)	 	It is expressly agreed by EXECUTIVE that the nature and scope
of each of the provisions set forth above in this Paragraph 10 are reasonable
and necessary. If, for any reason, any aspect of the above provisions as it
applies to EXECUTIVE is determined by a court of competent jurisdiction to be
unreasonable, or unenforceable, the provision shall only be modified to the
minimum extent required to make the provisions reasonable and/or enforceable,
as the case may be. EXECUTIVE acknowledges and agrees that his services are of
a unique character and expressly grants to the COMPANY or any subsidiary,
successor or assignee of the COMPANY, the right to enforce the provisions above
through the use of all remedies available at law or in equity, including, but
not limited to, injunctive relief.






	11.	 	COMPANY PROPERTY.






	 	(a)	 	Any patents, inventions, discoveries, applications or process,
designs, devised, planned, applied, created, discovered or invented by
EXECUTIVE in the course of EXECUTIVE’S employment under this AGREEMENT and
which pertain to any aspect of the COMPANY’S or its respective subsidiaries’
or affiliates’ business shall be the sole and absolute property of the
COMPANY, and EXECUTIVE shall make prompt report thereof to the COMPANY and
promptly execute any and all documents reasonably requested to assure the
COMPANY the full and complete ownership thereof.
	 
	 	(b)	 	All records, files, lists, including computer generated lists,
drawings, documents, equipment and similar items relating to the COMPANY’S




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	 	 	 	business which EXECUTIVE shall prepare or receive from the COMPANY shall remain
the COMPANY’S sole and exclusive property. Upon termination of this AGREEMENT,
EXECUTIVE shall promptly return to the COMPANY all property of the COMPANY in
his possession. EXECUTIVE further represents that he will not copy or cause to
be copied, print out or cause to be printed out any software, documents or
other materials originating with or belonging to the COMPANY. EXECUTIVE
additionally represents that, upon termination of his employment with the
COMPANY, he will not retain in his possession any such software, documents or
other materials.






	12.	 	REMEDY. It is mutually understood and agreed that EXECUTIVE’S services are special,
unique, unusual, extraordinary and of an intellectual character giving them a peculiar value,
the loss of which cannot be reasonably or adequately compensated in damages in an action at
law. Accordingly, in the event of any breach of this AGREEMENT by EXECUTIVE, including but
not limited to, the breach of the non-disclosure, non-solicitation and non-compete clauses of
Paragraph 10 hereof, the COMPANY shall be entitled to equitable relief by way of injunction or
otherwise in addition to damages the COMPANY may be entitled to recover.
	 
	13.	 	REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. In order to induce the COMPANY to enter into
this AGREEMENT, EXECUTIVE hereby represents and warrants to the COMPANY as follows:
(i) EXECUTIVE hereby has the legal capacity and unrestricted right to execute and deliver this
AGREEMENT and to perform all of his obligations hereunder; (ii) the execution and delivery of
this AGREEMENT by EXECUTIVE and the performance of his obligations hereunder will not will not
violate or be in conflict with any fiduciary or other duty, instrument, agreement, document,
arrangement or other understanding to which EXECUTIVE is a party or by which he is or may be
bound or subject; and (iii) EXECUTIVE is not a party to any instrument, agreement, document,
arrangement or other understanding with any person (other than the COMPANY) requiring or
restricting the use or disclosure of any confidential information or the provision of any
employment, consulting or other services, except any confidentiality agreements unrelated to
the COMPANY’S industry
and having no relationship or impact of any kind whatsoever with respect to this AGREEMENT
and the transactions contemplated hereby.
	 
	14.	 	NOTICES. All notices given hereunder shall be in writing and shall be deemed effectively
given when hand-delivered or mailed, if sent by registered or certified mail, return receipt
requested, addressed to EXECUTIVE at his address set forth on the first page of this AGREEMENT
or to the COMPANY at its address set forth on the first page of this AGREEMENT or to such
changed address as may be properly noticed hereunder.
	 
	15.	 	ENTIRE AGREEMENT. This AGREEMENT constitutes the entire understanding of the parties with
respect to its subject matter and no change, alteration or modification hereof may be made
except in writing signed by the parties hereto. Any prior or other agreements, promises,
negotiations or representations not expressly set forth in this AGREEMENT are of no force or
effect.




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	16.	 	SEVERABILITY. If any provision of the Agreement shall be unenforceable under any
applicable law, then notwithstanding such unenforceability, the remainder of this AGREEMENT
shall continue in full force and effect.
	 
	17.	 	WAIVERS, MODIFICATIONS. No amendment, modification or waiver of any provision of this
AGREEMENT shall be effective unless the same shall be in writing and signed by each of the
parties hereto, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
	 
	18.	 	INDEMNIFICATION. COMPANY shall indemnify EXECUTIVE against any and all claims of third
parties arising out of his earlier services to the COMPANY and out of the performance of his
duties pursuant to this AGREEMENT to the fullest extent permitted by law.
	 
	19.	 	ASSIGNMENT. Neither this AGREEMENT, nor any of EXECUTIVE’S rights, powers, duties or
obligation hereunder, may be assigned by EXECUTIVE. This AGREEMENT shall be binding upon and
inure to the benefit of EXECUTIVE and his heirs and legal representatives and the COMPANY and
its successors and assigns.
	 
	20.	 	APPLICABLE LAW. This AGREEMENT shall be deemed to have been made, drafted, negotiated and the
transactions contemplated hereby consummated and fully performed in the State of California,
without regard to the conflicts of law rules thereof. Nothing contained in this AGREEMENT
shall be construed so as to require the commission of any act contrary to law, and whenever
there is any conflict between any provision of this AGREEMENT and any statue, law,
ordinance, order or regulation, contrary to which the parties hereto have no legal right to
contract, the latter shall prevail, but in such event any provision of this AGREEMENT so
affected shall be curtailed and limited only to the extent necessary to bring it within
applicable legal requirements.
	 
	21.	 	ARBITRATION; JURISDICTION AND VENUE; PREVAILING PARTY. All disputes or controversies
between COMPANY and EXECUTIVE arising out of, in connection with or relating to this AGREEMENT
shall be exclusively heard, settled and determined by arbitration before a retired Federal or
California judge to be held in the City of Los Angeles, County of Los Angeles. The
arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and
Procedures. The parties also agree that judgment may be entered on the arbitrator’s award by
any court having jurisdiction thereof and the parties consent to the jurisdiction of any court
located in the City of Los Angeles, County of Los Angeles, for this purpose. The arbitrator
shall allocate all of the costs of the arbitration, including the fees of the arbitrator and
the reasonable attorneys’ fees and expenses of the prevailing party, against the party who did
not prevail.
	 
	22.	 	FULL UNDERSTANDING. EXECUTIVE represents and agrees that he fully understands his rights
to discuss all aspects of this AGREEMENT with his private attorney, that to the extent, if
any, that he desires, he availed himself of this right, that he has carefully read and fully
understands all of the provisions of this AGREEMENT, that he is competent to execute this
AGREEMENT, that his agreement to execute the Agreement has not been obtained by any duress and
that he freely and voluntarily enters




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	 	 	into it, and that he has read this document in its
entirety and fully understands the meaning, intent and consequences of this document.
	 
	23.	 	COUNTERPARTS. This AGREEMENT may be executed in any number of counterparts, each of which
shall be deemed an original and all of which taken together shall constitute one and the same
agreement.
	 
	24.	 	LEGAL REPRESENTATION AND LEGAL EXPENSES. The parties hereto acknowledge that each has been
represented by independent counsel of such party’s own choice throughout all of the
negotiations which preceded the execution of this AGREEMENT and in connection with the
preparation and execution of this AGREEMENT or has had the opportunity to do so and has not
availed himself of it. The COMPANY shall reimburse EXECUTIVE for all reasonable legal fees
and disbursements incurred by EXECUTIVE in connection with the negotiation, preparation and
execution of this AGREEMENT.





[SIGNATURE PAGE FOLLOWS]




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     IN WITNESS WHEREOF, the parties have executed this AGREEMENT as of the date first above
written.



	 	 	 	 	 
	 	THE COMPANY:



MOTORCAR PARTS OF AMERICA, INC.

 	 
	 	By:  	/s/ Michael M. Umansky 	 
	 	 	Michael M. Umansky 	 
	 	 	Vice President, General Counsel & Secretary 	 
	 
	 
	 

	EXECUTIVE:	 	 
	 
	 	 	 	 
	 	/s/ Selwyn Joffe 	 
	 

	 

SELWYN JOFFE
	 





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EXHIBIT A



As part of EXECUTIVE’S obligations to the COMPANY, EXECUTIVE will identify prospective buyers and
sellers who may be interested in acquiring or selling businesses or lines of businesses upon terms
and conditions and in a form satisfactory to COMPANY (including any transaction resulting in a
change of control, and without regard to form, sometimes described herein as a “PROPOSED
TRANSACTION”).



In the event of a closing of any PROPOSED TRANSACTION(s) at any time during the term of this
AGREEMENT, EXECUTIVE shall be entitled to a fee as provided in this Paragraph. In any such event,
the COMPANY shall pay EXECUTIVE a transaction fee upon the closing of a PROPOSED TRANSACTION in an
amount (the “TRANSACTION FEE”) equal to 1% of the “total consideration.” The “total consideration”
shall equal (a) the sum of all cash consideration paid by the acquirer plus all Non-Cash
Consideration (as defined below) received as consideration for the transaction, including any
contingent payments of cash or securities and the aggregate amount of any dividends (other than
normal quarterly or annual cash dividends) or other distributions declared by the acquired entity
in connection with a PROPOSED TRANSACTION, reduced by (b) any cash payments or any Non-Cash
Consideration subsequently returned to the acquirer pursuant to the agreement (the “Purchase
Agreement”) out of an escrow account, through an offset against an earn-out amount or through
another holdback arrangement, regardless of the reason for such return. “Non-Cash Consideration”
shall have the following meaning: (i) publicly traded securities shall be valued at the average of
their closing prices (as reported in The Wall Street Journal), for the five trading days
immediately prior to closing of the transaction between COMPANY and the other party and (ii) any
other non-cash consideration shall be valued at the fair market value thereof as determined in good
faith by the Board of Directors of COMPANY. Debt assumed by the acquirer shall not constitute
consideration or Non-Cash Consideration for purposes of calculating the TRANSACTION FEE.



Subject to the terms and conditions of this paragraph, the TRANSACTION FEE shall be deemed earned
and payable upon receipt of the total consideration at the closing with respect to a PROPOSED
TRANSACTION and, with respect to contingent or deferred payments, whether pursuant to promissory
notes or other securities, if any, from time to time, only upon the receipt thereof by the seller
or holder of its equity interests. If for any reason whatsoever, including, without limitation,
the act, omission, negligence or willful default of any party, including the COMPANY, a PROPOSED
TRANSACTION is not consummated, then EXECUTIVE shall not be entitled to any TRANSACTION FEE. The
TRANSACTION FEE shall, at COMPANY’S sole option, be payable in kind, depending upon the form of
consideration paid by the acquirer, in the same proportions of cash and securities as paid by the
acquirer. In the event that the Purchase Agreement provides that all or any part of the total
consideration paid shall be deposited into an escrow account at closing (the “ESCROWED PORTION”),
then the amount of the TRANSACTION FEE proportional to the ESCROWED PORTION shall not be payable
until the ESCROWED PORTION is released. If the ESCROWED PORTION is released in installments, then
a portion of EXECUTIVE’S TRANSACTION FEE will be payable in proportion to each installment released
and EXECUTIVE shall not be entitled to receive any amount with respect to any ESCROWED PORTION
which is returned to the acquirer. However, in any instance where any cash or securities which
have previously been distributed to




EXHIBIT A-1




 









 







the seller or holder of its equity interests are required to be returned to the acquirer for any
reason, EXECUTIVE shall not be required to return any portion of the TRANSACTION FEE. EXECUTIVE
hereby agrees that any securities received by him as part of the TRANSACTION FEE hereunder shall be
acquired and held subject to the same restrictions, if any, applicable to the securities issued by
the acquirer or any affiliate thereof and that securities delivered to EXECUTIVE may bear an
appropriate legend with respect to any such restrictions.




EXHIBIT A-2