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Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated

Employment Agreement (“Agreement”) is entered into as of July 1, 2002 by

and between Michael T. DuBose, an individual (“Executive”), and Aftermarket

Technology Corp., a Delaware corporation (the “Company” or “ATC”).  For purposes of this Agreement, unless the

context otherwise requires, references to the “Company” shall include all

subsidiaries of the Company and any successor corporation or corporations which

may be the eventual successor to the present future business and/or assets of

the Company.  All capitalized terms used

in this Agreement without definition will have the meanings set forth in

Section 6(f).

 

1.  EMPLOYMENT BY THE COMPANY AND INITIAL

EMPLOYMENT TERM.

 

(a)  FULL TIME AND BEST EFFORTS.  Subject to the terms set forth herein, the

Company agrees to employ Executive during the Initial Employment Term (as

defined in Section 1(d)) as the Chairman, President and Chief Executive

Officer of the Company and Executive hereby accepts such employment.  In addition, during the Initial Employment

Term Executive shall serve as (i) President and Chief Executive Officer of ACI

Electronics Investment Corp.  and (ii)

Chief Executive Officer of each of Aaron’s Automotive Products, Inc., ACI

Electronics Holding Corp., ATC Information Services, Inc., ATS Remanufacturing,

Inc., Autocraft Industries, Inc., Autocraft Remanufacturing Corp., Component

Remanufacturing Specialists, Inc. and other subsidiaries expected to result

from future acquisitions.  During the

Initial Employment Term, Executive shall 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 will not engage in any other employment or business

activities for any direct or indirect remuneration.  During the Initial Employment Term and the Extended Employment

Term (as defined in Section 5(a), and together with the Initial Employment

Term, the “Employment Term”), Executive will not engage in any employment or

business activities that would be directly harmful or detrimental to, or that

may compete with, the business and affairs of the Company or any of its

subsidiaries, or that would interfere with his duties hereunder.

 

(b)  DUTIES. 

During the Initial Employment Term, Executive shall serve in an

executive capacity and shall perform such duties as are customarily associated

with his then current title, consistent with the Bylaws of the Company and as

required by the Company’s Board of Directors (the “Board”).  During the Initial Employment Term,

Executive agrees to devote his entire professional time, energies and skills to

his employment hereunder (reasonable vacations and absences because of illness

excepted).

 

(c)  COMPANY POLICIES.  The relationship between the parties during the Employment Term

shall be governed by, and Executive agrees to abide by, the general employment

policies and practices of the Company as in effect from time 

 

 

to time (all

of which are incorporated herein by reference), including but not limited to

those relating to protection of confidential information and assignment of

inventions, except that when the terms of this Agreement differ from or are in

conflict with the Company’s general employment policies or practices, this

Agreement shall control.

 

(d)  INITIAL EMPLOYMENT TERM.  The Initial Employment Term of Executive

under this Agreement is defined as the period commencing on the date hereof and

ending on (i) January 28, 2004, (ii) such date as this Agreement may

be terminated pursuant to Section 6, (iii) such date as the Initial

Term may be extended to pursuant to Section 1(e), or (iv) the date of

conversion of the Initial Employment Term to the Extended Employment Term as

provided in Sections 5(a).

 

(e)  RENEWAL. 

Subject to the provisions of Section 5(a), unless the

Company or Executive shall have given the other written notice that the Initial

Employment Term shall not be extended at least 90 days prior to the date on

which the Initial Employment Term is then scheduled to end, the Initial

Employment Term shall be automatically extended for a period of one year, such

procedure to be followed in each such successive period.  Each extension of the Initial Employment

Term shall continue to be subject to the provisions for termination set forth

herein and for conversion to the Extended Employment Term as provided in

Section 5(a).

 

2.  COMPENSATION AND BENEFITS.

 

(a)  SALARY; NONCOMPETITION PAYMENTS.

 

(i)            During the Initial

Employment Term, Executive shall receive for services to be rendered hereunder

an annual base salary (the “Base Salary”) initially equal to Five Hundred Fifty

Thousand Dollars ($550,000) payable on a monthly basis, subject to standard

withholdings for taxes and social security and the like.  Executive’s annual Base Salary will be

reviewed annually during the Initial Employment Term by the Board and adjusted

when deemed appropriate by the Board to adequately reflect the scope and

success of the Company’s operations.

 

(ii)           During the Extended

Employment Term, Executive shall receive for services to be rendered hereunder

an annual salary (the “Extended Employment Salary”) equal to Two Hundred

Thousand Dollars ($200,000) payable on a monthly basis, subject to standard

withholdings for taxes and social security and the like to the extent

applicable.

 

(iii)          As consideration

for the covenants set forth in Section 9 insofar as they apply to a period

that extends beyond January 28, 2004, the Company shall pay to Executive,

not later than thirty (30) days after the execution hereof, the sum of One

Million Dollars ($1,000,000), subject to standard withholdings for taxes and

social security and the like to the extent applicable.

 

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(b)  PARTICIPATION IN BENEFIT PLANS.  During the Employment Term, Executive shall

be entitled to participate in any group insurance, hospitalization, medical,

dental, health and accident, disability or similar plan or program of the

Company now existing or established hereafter to the extent that he is eligible

under the general provisions thereof. 

The Company may, in its sole discretion and from time to time, establish

additional senior management benefit programs as it deems appropriate.

 

(c)  VACATION. 

During the Initial Employment Term, Executive shall be entitled to a

period of annual vacation time equal to that provided to senior managers by the

Company’s policies and procedures regarding vacation, but in any event not less

than four weeks per year.  The days

selected for Executive’s vacation must be mutually agreeable to the Company and

Executive.

 

(d)  401(K) PLAN.  To the extent legally permitted and subject to all eligibility

requirements, during the Employment Term Executive shall be entitled to place a

portion of his Base Salary into a 401(K) or other qualified deferred tax

annuity plan of the Company or, if the Company does not have such a plan, of

any such plan of any of the Company’s subsidiaries, as may be designated by

Executive.

 

(e)  DISABILITY INSURANCE.  To the extent that Executive’s disability

insurance coverage in effect immediately prior to the date hereof may be

continued after the date hereof, during the Employment Term the Company shall

pay the premiums for such insurance to the extent that the annual coverage provided

thereby does not exceed the Base Salary or the Extended Employment Salary, as

applicable.

 

(f)  AUTOMOBILE ALLOWANCE.  During the Initial Employment Term,

Executive shall be entitled to a monthly automobile allowance of One Thousand

Two Hundred Dollars ($1,200.00).

 

(g)  RELOCATION EXPENSES.  Executive shall recover all benefits to

which he is entitled under the Company’s relocation policy and will be entitled

to the following additional benefits (to the extent such benefits are not

provided by the Company’s relocation policy): 

(i) reimbursement of actual travel and temporary living expenses

(grossed up to cover standard withholdings for tax and social security

purposes) to cover associated costs relating to temporary living expenses in

the Chicago, Illinois area; and (ii) the reimbursement of actual costs incurred

in transporting household goods to the Chicago, Illinois area and expenses

incidental to the purchase of a new residence in the Chicago, Illinois area.

 

(h)  EQUITY PLAN.  During the Initial Employment Term, Executive will be eligible to

participate in the Senior Management Equity Plan if and when established by the

Company.

 

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3.  OPTION AND BONUS PLANS.

 

(a)  PARTICIPATION.  During the Initial Employment Term, Executive shall be entitled

to participate in any stock option plan and any bonus or incentive plan of the

Company currently made available by the Company to executive employees of the

Company or which may be made available in the future to executive employees of

the Company, subject to and on a basis consistent with the terms, conditions

and administration of any such plan; PROVIDED, HOWEVER, that Executive’s annual

cash bonus will be as provided in Section 3(b).  Executive understands that any such plan may be modified or

eliminated in the Company’s discretion in accordance with applicable law.  During the Extended Employment Term

(i) Executive will continue to accrue vesting under stock options and

other incentive awards that were granted to Executive prior to the end of the

Initial Employment Term and that include vesting provisions conditioned upon

Executive continuing in the employment of the Company and (ii) Executive’s

employment with the Company will not be considered to have terminated for any

purposes, including for the purpose of the expiration of stock options or other

incentive awards that were granted to Executive prior to the end of the Initial

Employment Term.  During the Extended Employment

Term, Executive will not otherwise be entitled to participate in any stock

option plan or any bonus or incentive plan of the Company.

 

(b)  ANNUAL CASH BONUS.  For all annual periods ending during the Initial Employment Term,

Executive shall receive such cash bonus as the Board shall determine in its

sole discretion based upon the performance of the Company and its subsidiaries,

PROVIDED that the annual cash bonus target for Executive shall not exceed 75%

of the Base Salary for such year.  Such

bonuses may be paid at the end of the year in which such bonus is earned.  During the Extended Employment Term,

Executive will not be entitled to receive any annual or other bonus.

 

4.  REASONABLE BUSINESS EXPENSES AND SUPPORT.  Executive shall be reimbursed for documented

and reasonable business expenses incurred during the Employment Term in

connection with the performance of his duties hereunder.  Executive shall be furnished reasonable

office space, assistance and facilities during the Initial Employment Term.

 

5.  ELECTION TO CONVERT TO EXTENDED EMPLOYMENT

STATUS.

 

(a)  RIGHT TO CONVERT STATUS.  Unless the Company is then entitled to

terminate Executive’s employment pursuant to Section 6(a) or Executive is

then entitled to resign for Good Reason (as defined in Section 6(g)),

either the Company or Executive may elect to convert Executive’s employment

status (the “Conversion”) from that of Chairman, President and Chief Executive

Officer of the Company to that of an employee having such position (including,

without limitation the position of Chairman Emeritus or a member of the Board)

as the Board shall determine, effective as of a date (the “Conversion Date”)

specified in the written notice of such election, but in no event earlier than

the later to occur of 

 

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January 29,

2004 or the date that is 30 days after such written notice unless the Company

and Executive otherwise agree in writing. 

If Executive’s status is converted pursuant to the preceding sentence,

the terms of this Section 5 shall govern the provision of services by

Executive after the Conversion Date. 

The “Extended Employment Term” shall mean the period commencing on the

Conversion Date and ending on (i) the fifth anniversary of the Conversion

Date, (ii) such earlier or later date as the Company and Executive may

agree upon in writing, or (iii) the date on which the Extended Employment

Term is terminated pursuant to Section 6.

 

(b)  EXTENDED EMPLOYMENT DUTIES.  During the Extended Employment Term,

Executive shall retain the status of an employee of the Company and shall be

available to provide the Company, if requested, with such services as shall

from time to time be reasonably and specifically assigned to him by the Board;

PROVIDED, HOWEVER, such services shall not exceed twenty (20) hours per month

or one hundred fifty (150) hours per year. 

The services to be rendered by Executive under this Section 5 shall

include advice regarding the business, management and administration of the

Company and its subsidiaries.  Executive

shall report solely to the Board and shall be subject to direction solely from

the Board in the performance of his duties hereunder.

 

(c)  PLACE OF PERFORMANCE.  All services to be provided by Executive

under this Section 5 shall be provided either by telephone or in person at

the Company’s offices in Chicago, Illinois (or at such other offices as may be

mutually acceptable to Executive and the Company).  In each case, the services shall be provided upon reasonable

prior written notice to Executive by the Company, at such times as may be

reasonably requested by the Company and as may be mutually convenient to

Executive and the Company.

 

(d)  PAYMENTS UPON CONVERSION OF STATUS.  If Executive’s status is converted pursuant

to Section 5(a) (whether the Conversion is at the election of Executive or

the Company or at the agreement of the parties), within ten days after the

Conversion Date Executive (or his estate) shall receive payment for all accrued

Base Salary through the Conversion Date and the Earned Benefits.  In addition:

 

(i)  Through the tenth anniversary of the

Conversion 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 employees of the Company (active employees in the case of

benefits provided after the Extended Employment Term).  Medical-related insurance coverage includes

health, dental and/or vision. 

Notwithstanding the above, coverage under the Company’s group medical

plan shall cease on the date (A) Executive fails to pay the required

premium, if any, reasonably on time, (B) Executive becomes eligible for

comparable coverage under Medicare or the group health plan of any other

employer, or 

 

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(C) the Company

terminates its group medical plan as to all its employees.  If Executive dies prior to the tenth

anniversary of the Conversion Date, the foregoing benefit will terminate but

the Company will reimburse Executive’s surviving spouse for premium expenses

incurred, at the rates applicable from time to time charged to comparable

employees of the Company (active employees in the case of benefits provided

after the Extended Employment Term), if Executive’s spouse obtains COBRA

continuation coverage for applicable medical-related insurance.  Executive’s spouse will be entitled to such

reimbursement for 36 months or until the tenth anniversary of the Conversion

Date, whichever is sooner.  If the

Company terminates its group medical plan as to all its employees, the Company

will reimburse Executive for the costs of maintaining comparable coverage for

the required period.

 

(ii)  The Company shall pay Executive (or his

estate if he dies after the Conversion Date) as Conversion bonus an amount

equal to (A) 200% of Executive’s annual base salary as in effect

immediately prior to the Conversion Date plus (B) 200% of Executive’s

target bonus under the IC Plan for the calendar year in which the Conversion

shall occur, plus (C) the Prorated Bonus if the Conversion Date occurs

other than within 18 months after a Change in Control or (D) the Pro Forma

Bonus if the Conversion Date occurs within 18 months after a Change in Control.

 

(y)  If the Conversion Date occurs other than

within 18 months after a Change in Control, the Conversion bonus called for by

clauses (A) and (B) of this Section 5(d))(ii) shall be paid in equal

installments on each of the Company’s regular payroll dates during the 24-month

period commencing on the first such payroll date following the Conversion Date

and the Prorated Bonus called for by clause (C) of this

Section 5(d)(ii) will be paid if and when the Company generally pays

bonuses under the IC Plan to its other employees with respect to the calendar

year in which the Conversion occurs.

 

(z)  If the Conversion Date occurs within 18

months after a Change in Control, the Conversion bonus called for by

clauses (A) and (B) of this Section 5(d)(ii) and the Pro Forma Bonus

called for by clause (D) of this Section 5(d)(ii) shall be paid

within ten days after the Conversion Date.

 

As a condition

to receiving the payments and benefits provided by this Section 5(d)

(other than payment for all Base Salary accrued through the Conversion Date and

the Earned Benefits, which shall be payable in any case), (I) Executive

shall execute and deliver to the Company on the Conversion Date a

 

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general

release in the form attached hereto as Exhibit A and (II) Executive shall

not be in breach of any of the provisions of any of Sections 7, 8 or 9 hereof

at any time during the effectiveness thereof. 

 

6.  TERMINATION OF EMPLOYMENT.  The date on which Executive’s status as an

employee of the Company ceases, under any of the following circumstances, shall

be defined herein as the “Employment Termination Date.”

 

(a)  TERMINATION FOR CAUSE.

 

(i)            TERMINATION OF EMPLOYMENT.  During the Employment Term, the Board may

terminate Executive’s employment with the Company at any time for Cause (as

defined below), immediately upon notice to Executive of the circumstances

leading to such termination for Cause.

 

(ii)           In the event that Executive’s

employment is terminated for Cause during the Initial Employment Term,

Executive shall receive (x) payment for all Base Salary accrued through the

Employment Termination Date, which in this event shall be the date upon which

notice of termination is given, and (y) the Earned Benefits and the Company

shall have no obligation to make any payment in lieu of notice.  In the event that Executive’s employment is

terminated for Cause during the Extended Employment Term, Executive shall

receive payment for all accrued Extended Employment Salary through the

Employment Termination Date and any amounts not yet paid pursuant to

Section 5(d) and the Company shall have no obligation to make any other

payment or any payment in lieu of notice.

 

(iii)          DEFINITION OF CAUSE.  “CAUSE” means the occurrence or existence of

any of the following with respect to Executive, as determined by a majority of

the disinterested directors of the Board: (a) unsatisfactory performance (other

than unsatisfactory performance resulting from Executive’s incapacity due to

physical or mental illness that would qualify Executive for disability benefits

under the Company’s short-term or long-term disability plans) of Executive’s

duties or responsibilities as determined by the Board, PROVIDED that the

Company has given Executive written notice specifying the unsatisfactory

performance of his duties and responsibilities, which remains uncorrected by

Executive after the lapse of 30 days following the receipt of the written

notice; PROVIDED, FURTHER, that this clause (a) shall not apply during the

Extended Employment Term; (b) a material breach by Executive of any of his

material obligations hereunder which remains uncured after the lapse of 30 days

following the date that the Company has given Executive written notice thereof;

(c) a material breach by Executive of his duty not to engage in any transaction

that represents, directly or indirectly, self-dealing with the Company or any

of its Affiliates which has not been approved by a majority of the

disinterested directors of the Board or of the terms of his employment

relationship with the Company, 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; (d) the repeated unsatisfactory

performance or material breach by Executive of any

 

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obligation or

duty referred to in clause (a), (b) or (c) above as to which at least one

written notice has been given pursuant to such clause (a), (b) or (c); (e) any

act of willful dishonesty, misappropriation, embezzlement, intentional fraud or

similar conduct involving the Company or any of its Affiliates; (f) the

conviction or the plea of nolo contendre

or the equivalent in respect of a felony involving moral turpitude; (g) the

repeated non-prescription use of any controlled substance or the repeated use

of alcohol or any other non-controlled substance which, in the reasonable

determination of the Board, in any case described in this clause (g), renders

Executive unfit to serve in his capacity as an officer or employee of the

Company or its Affiliates; or (h) gross negligence or willful misconduct in the

performance of his duties hereunder, which conduct is materially injurious to

the Company, or a willful and material breach of this Agreement.

 

(b)  VOLUNTARY TERMINATION.

 

(i)            TERMINATION OF EMPLOYMENT.  During the Initial Employment Term,

Executive may voluntarily terminate his employment with the Company at any time

upon 90 days prior written notice. 

Within ten days after the Employment Termination Date, Executive shall

receive payment for all accrued Base Salary through the Employment Termination

Date and the Earned Benefits.

 

(ii)           TERMINATION OF EXTENDED EMPLOYMENT

TERM.  During the Extended Employment

Term, Executive may voluntarily terminate his employment with the Company at

any time upon 30 days prior written notice. 

Within ten days after the Employment Termination Date, Executive shall

receive payment for all accrued Extended Employment Salary through such

Employment Termination Date.

 

(c) 

OTHER TERMINATION OF INITIAL EMPLOYMENT TERM.

 

(i)            Executive’s employment during the

Initial Employment Term shall be terminated if (A)  the Company terminates Executive’s employment at any time during

the Initial Employment Term without Cause upon 30 days’ prior written notice,

(ii) the Company terminates Executive’s employment at any time during the

Initial Employment Term due to his disability, (iii) Executive dies at any time

during the Initial Employment Term or (iv) Executive resigns for Good Reason at

any time during the Initial Employment Term.

 

(ii)           If Executive’s employment is

terminated pursuant to this Section 6(c), within ten days after the

Employment Termination Date, Executive (or his estate) shall receive payment

for all accrued Base Salary through the Employment Termination Date, and the

Earned Benefits.  In addition:

 

(A)  Through the tenth anniversary of the

Employment 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

 

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of the

Company.  Medical-related insurance

coverage includes health, dental and/or vision.  Notwithstanding the above, coverage under the Company’s group

medical plan shall cease on the date (1) Executive fails to pay the

required premium, if any, reasonably on time, (2) Executive becomes

eligible for comparable coverage under Medicare or the group health plan of any

other employer, or (3) the Company terminates its group medical plan as to

all its employees.  If Executive dies

prior to the tenth anniversary of the Employment Termination Date, the

foregoing benefit will terminate but the Company will reimburse Executive’s

surviving spouse for premium expenses incurred, at the rates applicable from

time to time charged to comparable active employees of the Company, if

Executive’s spouse obtains COBRA continuation coverage for applicable

medical-related insurance.  Executive’s

spouse will be entitled to such reimbursement for 36 months or until the tenth

anniversary of the Employment Termination Date, whichever is sooner.  If the Company terminates its group medical

plan as to all its employees, the Company will reimburse Executive for the

costs of maintaining comparable coverage for the required period.

 

(B)  The Company shall pay Executive (or his

estate if he dies after the Employment Termination Date) as severance an amount

equal to (1) 200% of Executive’s annual base salary as in effect

immediately prior to the Employment Termination Date plus (2) 200% of

Executive’s target bonus under the IC Plan for the Termination Year, plus

(3) the Prorated Bonus if the Employment Termination Date occurs other

than within 18 months after a Change in Control or (4) the Pro Forma Bonus

if the Employment Termination Date occurs within 18 months after a Change in

Control.

 

(y)  If the Employment Termination Date occurs

other than within 18 months after a Change in Control, the severance called for

by Section 6(c)(ii)(B)(1) and (2) shall be paid in equal installments on

each of the Company’s regular payroll dates during the 24-month period

commencing on the first such payroll date following the Employment Termination

Date and the Prorated Bonus called for by Section 6(c)(ii)(B)(3) 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.

 

(z)  If the Employment Termination Date occurs

within 18 months after a Change in Control, the severance called for by

Section 6(c)(ii)(B)(1), (2) and (4) shall be paid within ten days after

the Employment Termination Date.

 

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(C)  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 Employment Termination Date.

 

(D)  The Company shall pay Executive (or his

estate if he dies after the Employment Termination Date) the sum of

(I) the One Million Dollars ($1,000,000) to be paid pursuant to

Section 2(a)(iii) (to the extent not previously paid (for this purpose,

treating any amounts withheld for taxes and social security and the like as

having been “paid” to Executive)) plus (II) One Million Dollars ($1,000,000)

as compensation for the Extended Employment Salary that Executive would have

otherwise earned during the Extended Employment Period pursuant to

Section 2(a)(ii).

 

(y)  If the Employment Termination Date occurs

other than within 18 months after a Change in Control, the payment called for

by clause (I) of this Section 6(c)(ii)(D) shall be paid within ten days

after the Employment Termination Date and the payment called for by clause (II)

of this Section 6(c)(ii)(D) shall be paid in equal installments on each of

the Company’s regular payroll dates during the 60-month period commencing on

the first such payroll date following the Employment Termination Date.

 

(z)  If the Employment Termination Date occurs

within 18 months after a Change in Control, all the payments called for by this

Section 6(c)(ii)(D) shall be paid within ten days after the Employment

Termination Date.

 

As a condition

to receiving the payments and benefits provided by this Section 6(c)(ii)

(other than payment for all Base Salary accrued through the Employment

Termination Date and the Earned Benefits, which shall be payable in any case),

(I) Executive shall execute and deliver to the Company on the Employment

Termination Date a general release in the form attached hereto as Exhibit A and

(II) Executive shall not be in breach of any of the provisions of any of

Sections 7, 8 or 9 hereof at any time during the effectiveness thereof.

 

(d)  OTHER TERMINATION OF EXTENDED EMPLOYMENT

TERM.

 

(i)            If the Extended Employment Term

shall commence, Executive’s employment by the Company shall be terminated if

(A) the Company terminates Executive’s employment by the Company at any

time during the Extended Employment Term without Cause upon 30 days’ prior

written notice, (B) the Company terminates Executive’s employment by the

Company at any time during the Extended Employment Term due to his disability,

(C) Executive dies at any

 

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time during

the Extended Employment Term or (D) Executive terminates his employment by the

Company for Good Reason at any time during the Extended Employment Term.

 

(ii)           If Executive’s employment by the

Company is terminated pursuant to this Section 6(d), within ten days after

the Employment Termination Date Executive (or his estate) shall receive payment

for all accrued Extended Employment Salary through the Employment Termination

Date.  In addition to the foregoing

payments specified in this Section 6(d)(ii):

 

(A)  Through the tenth anniversary of the

Conversion 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 and/or

vision.  Notwithstanding the above,

coverage under the Company’s group medical plan shall cease on the date

(1) Executive fails to pay the required premium, if any, reasonably on

time, (2) Executive becomes eligible for comparable coverage under

Medicare or the group health plan of any other employer, or (3) the

Company terminates its group medical plan as to all its employees.  If Executive dies prior to the tenth

anniversary of the Conversion Date, the foregoing benefit will terminate but

the Company will reimburse Executive’s surviving spouse for premium expenses

incurred, at the rates applicable from time to time charged to comparable

active employees of the Company, if Executive’s spouse obtains COBRA

continuation coverage for applicable medical-related insurance.  Executive’s spouse will be entitled to such

reimbursement for 36 months or until the tenth anniversary of the Conversion

Date, whichever is sooner.  If the

Company terminates its group medical plan as to all its employees, the Company

will reimburse Executive for the costs of maintaining comparable coverage for

the required period.

 

(B)  The Company shall pay Executive (or his

estate if he dies after the Employment Termination Date) in lieu of the

Extended Employment Salary that Executive would have otherwise earned during

the Extended Employment Term an amount equal to the Extended Employment Salary

payable to Executive during the period between such Employment Termination Date

and the date on which the Extended Employment Period would have otherwise

ended.

 

(y)  If the Employment Termination Date occurs

other than within 18 months after a Change in Control, the payments called for

by this Section 6(d)(ii)(B) shall be paid in equal monthly installments of

Sixteen Thousand Six Hundred and Sixty Six Dollars ($16,666)

 

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(subject to

pro ration for the first and last months of payment) on the first day of each

month during the remainder of such Extended Employment Term.

 

(z)  If the Employment Termination Date occurs

within 18 months after a Change in Control, the Payments called for by this

Section 6(d)(ii)(B) shall be paid within ten days after the Employment

Termination Date.

 

As a condition

to receiving the payments and benefits provided by this Section 6(d)(ii)

(other than payment for all accrued Extended Employment Salary through the

Employment Termination Date, which shall be payable in any case),

(I) Executive shall execute and deliver to the Company on the Employment

Termination Date a general release in the form attached hereto as Exhibit A and

(II) Executive shall not be in breach of any of the provisions of any of

Sections 7, 8 or 9 hereof at any time during the effectiveness thereof.

 

(e)  NO OTHER PAYMENTS OR BENEFITS.  Except as otherwise expressly provided in

this Agreement, (i) after the Employment Termination Date, Executive will not

be entitled to any payments from the Company and (ii) on the Employment

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.

 

(f)  WITHHOLDING.  Any amounts payable under this Agreement shall be subject to

standard withholdings for taxes and social security and the like to the extent

applicable.

 

(g)  DEFINITIONS.

 

(i)  “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

 

12

 

than 35% of

the total voting power in the aggregate of all classes of capital stock of the

Company then 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 Board

(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 members of the Board 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.

 

(ii)  “CONVERSION YEAR” means the calendar year in

which the Conversion Date occurs.

 

(iii)  “EARNED BENEFITS” means, with respect to a

Conversion or with respect to any termination during the Initial Employment

Term, any (x) bonus that is payable to Executive under the IC Plan with respect

to the calendar year preceding the year in which the Conversion Date or the

Employment Termination Date occurs but that has not been paid prior to the

Conversion Date or the Employment Termination Date, (y) vacation time that has

accrued as of the Conversion Date or the Employment Termination Date, and (z)

other entitlements to cash payments that have accrued as of the Conversion Date

or the Employment 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)  “GOOD REASON” means the occurrence of any of

the following events that remains uncured 15 days after Executive shall have

given the Company written

 

13

 

notice

thereof: (x) a reduction (which is not consented to by Executive) in

Executive’s Base Salary or Extended Employment Salary during the Employment

Term, (y) a material reduction in the aggregate level of Executive’s employee

benefits (other than stock-based compensation) during the Employment Term not

permitted or contemplated by the terms of this Agreement, or (z) a material and

adverse change in Executive’s duties or responsibilities during the Employment

Term.

 

(vi)  “IC PLAN” means the Company’s annual

incentive compensation plan or similar plan instituted in place of the

incentive compensation plan.

 

(vii)  “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.

 

(viii)  “PRO FORMA BONUS” means (A) the greater of

(x) Executive’s bonus under the IC Plan for the Conversion Year or the

Termination Year based on the Company’s projected performance for the

Conversion Year or the Termination Year, such projection to be determined by

annualizing the performance for those months of the Conversion Year or the

Termination Year that are completed prior to the Conversion Date or the

Employment Termination Date, or (y) Executive’s target bonus under the IC Plan

for the Conversion Year or the Termination Year multiplied by (B) a fraction

(x) the numerator of which is the number of days that have elapsed in the

Conversion Year or the Termination Year through the Conversion Date or the

Employment Termination Date and (y) the denominator of which is 365.

 

(ix)  “PRORATED BONUS” means the bonus, if any,

that would have been payable to Executive under the IC Plan with respect to the

Conversion Year or the Termination Year multiplied by a fraction (A) the

numerator of which is the number of days that have elapsed in the Conversion

Year or the Termination Year through the Conversion Date or the Employment

Termination Date and (B) the denominator of which is 365.

 

(x)  “TERMINATION YEAR” means the calendar year

in which the Employment Termination Date occurs.

 

(h)  RELOCATION UPON TERMINATION OF INITIAL

EMPLOYMENT TERM OR CONVERSION.  Upon

termination of Executive’s employment pursuant to Section 6(c) or the

Conversion pursuant to Section 5(a), Executive shall recover all benefits

to which he is entitled under the Company’s relocation policy and will be

entitled to the following additional benefits (to the extent such benefits are

not provided by the Company’s relocation policy): (i) reimbursement of actual

travel and temporary living expenses for a period not to exceed three months

(grossed up to cover standard withholdings for tax and social security

purposes) to cover associated costs relating to temporary living expenses in

the Williams, Oregon area; and (ii) the reimbursement of actual costs incurred

in

 

14

 

transporting

household goods to the Williams, Oregon area and expenses incidental to the

sale of Executive’s residence in the Chicago, Illinois area.

 

(i)  SECTIONS 280G AND 4999 OF THE INTERNAL

REVENUE CODE.  In the event Executive

is, as the result of the operation of this Agreement, the recipient of an

excess parachute payment, the Company will pay to Executive an additional

gross-up payment in order to put Executive in the same after-tax position that

Executive would have been in had no excise tax been imposed.

 

(j)  EFFECT OF CONVERSION OF STATUS.  Conversion of Executive’s status pursuant to

Section 5(a) (whether at the election of the Company or Executive or at

the agreement of the parties) will not be considered a termination of

employment under this Section 6.

 

7.  PROPRIETARY INFORMATION OBLIGATIONS.  Prior to the date hereof and during the

Employment Term, Executive has had and will have access to, and has and will

become acquainted with, the Company’s confidential and proprietary information,

including but not limited to information or plans regarding the Company’s

customer relationships, personnel, or 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 Company’s Proprietary Information

directly or indirectly, or use it in any way, either during the Employment Term

or at any time thereafter, except as required in the course of his employment

by the Company 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 of the Company, whether prepared by Executive or

otherwise coming into his possession, shall remain the exclusive property of

the Company and shall not be removed from the premises of the Company 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 returned to the Company immediately

following the Employment Termination Date, and no copies thereof shall be kept

by Executive; PROVIDED, HOWEVER, that Executive shall be entitled to retain

documents reasonably related to his interest as a shareholder and any documents

that were personally owned or acquired.

 

8.  NONINTERFERENCE.  Executive agrees that during the period

commencing on the date of this Agreement and ending on the date that is 12

months after the earlier of the Conversion Date or the Employment Termination

Date, he will not, without the prior written consent of a duly authorized

officer of the Company, interfere with the business of the Company by directly

or indirectly soliciting, attempting to solicit, inducing, assisting or

otherwise causing any employee of the Company to terminate his or her

employment in order to become an officer, director, manager, partner, employee,

consultant or independent contractor of, to or for any other employer.  The foregoing will not apply with respect to

any employee (a) who responds to a general public solicitation or advertisement

or (b) whose employment with the Company is terminated by the Company.

 

15

 

9.  NONCOMPETITION.  Executive agrees that during the period commencing

on the date of this Agreement and ending on the later to occur of

(a) January 28, 2009 or (b) the date that is 24 months after the

Employment Termination Date, he will not, without the prior written consent of

a duly authorized officer of the Company, directly or indirectly, have an

interest in, be employed by, be connected with, provide services to or have any

interest in, as an employee, consultant, officer, director, partner, manager,

stockholder, member or joint venturer, in any person or entity owning,

managing, controlling, operating or otherwise participating or assisting in any

business which is similar to or in competition with the business of the Company

as it existed during the Employment Term in any state in which the Company was

conducting business on or before the Employment Termination Date and continues

to do so thereafter; 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 National Association of Securities Dealers,

Inc.

 

10. 

MISCELLANEOUS.

 

(a)  NOTICES. 

Any notices provided hereunder must be in writing and shall be deemed

effective upon the earlier of personal delivery (including personal delivery by

telecopy or telex) or the third day after mailing by first class mail to the

recipient at the address indicated below:

 

To the Company:

 

Aftermarket Technology Corp.  

1 Oak Hill Center, Suite 400

Westmont, Illinois 60559

Attn: Joseph Salamunovich

Telecopier: (630) 455-2621

 

With a copy to:

 

Gibson, Dunn & Crutcher LLP

333 South Grand Avenue

Los Angeles, California 90071-3197

Attention: Bruce D.  Meyer, Esq.

Telecopier: (213) 229-7520

 

To Executive:

 

Michael T. 

DuBose

2220 Kincaid Road

Williams, Oregon 97544

Telecopier: (541) 846-0103

 

16

 

With a copy to:

 

Porter Wright

41 So. 

High Street

Columbus, Ohio 43215

Attention: Dan Costello, Esq.

Telecopier:

(614) 227-2100

 

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.  If any term or provision (or any portion thereof) of this

Agreement is determined by a court to be invalid, illegal or incapable of being

enforced by any rule of law or public policy, all other terms and provisions

(or other portions thereof) of this Agreement shall nevertheless remain in full

force and effect so long as the economic or legal substance of the transactions

contemplated hereby is not affected in any manner materially adverse to any

party.  Upon such determination that any

term or provision (or any portion thereof) is invalid, illegal or incapable of

being enforced, this Agreement shall be deemed to be modified so as to effect

the original intent of the parties as closely as possible to the end that the

transactions contemplated hereby and the terms and provisions hereof are

fulfilled to the greatest extent possible.

 

(c)  ENTIRE AGREEMENT.  This document constitutes the final, complete, and exclusive

embodiment of the entire agreement and understanding between the parties

related to the subject matter hereof and supersedes and preempts any prior or

contemporaneous understandings, agreements, or representations by or between

the parties, written or oral.

 

(d)  COUNTERPARTS.  This Agreement may be executed in 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 assign any of

his duties hereunder and he may not assign any of his rights hereunder without

the prior written consent of the Company.

 

(f)  AMENDMENTS. 

No amendments or other modifications to this Agreement may be made

except by a writing signed by both parties. 

No amendment or waiver of this Agreement requires the consent of any

individual, partnership, corporation or other entity not a party to this Agreement.  Nothing in this Agreement, express or

implied, is intended to confer upon any third person any rights or remedies

under or by reason of this Agreement.

 

17

 

(g)  CHOICE OF LAW.  All questions concerning the construction, validity and

interpretation of this Agreement will be governed by the internal law, and not

the law of conflicts, of the State of Delaware.

 

(h)  INTERPRETATION.  In interpreting this Agreement, all terms shall be construed in

accordance with their fair meaning and not strictly against any party as the

drafter hereof.

 

11. 

ARBITRATION.

 

(a)  Any disputes or claims arising out of or

concerning Executive’s employment with or termination by the Company, whether

arising under theories of liability or damages based upon contract, tort or

statute, shall be determined exclusively by arbitration before a single

arbitrator in accordance with the employment arbitration rules of the American

Arbitration Association (“AAA”), except as modified by this Agreement.  The arbitrator’s decision shall be final and

binding on both parties.  Judgment upon

the award rendered by the arbitrator may be entered in any court of competent

jurisdiction.  In recognition of the

fact that resolution of any disputes or claims in the courts is rarely timely

or cost effective for either party, the Company and Executive enter this mutual

agreement to arbitrate in order to gain the benefits of a speedy, impartial and

cost-effective dispute resolution procedure.

 

(b)  Any arbitration shall be held at such place

as the Company and Executive may agree in writing (or in the absence of such

agreement, in Los Angeles, California). 

The arbitrator shall be an attorney with substantial experience in

employment matters, selected by the parties alternately striking names from a

list of five such persons provided by the AAA office located nearest to the

place of arbitration, following a request by the party seeking arbitration for

a list of five such attorneys with substantial professional experience in

employment matters.  If either party

fails to strike names from the list, the arbitrator shall be selected from the

list by the other party.

 

(c)  Each party shall have the right to take the

deposition of one individual and any expert witness designated by the other

party.  Each party shall also have the

right to propound requests for production of documents to any party and the

right to subpoena documents and witnesses for the arbitration.  Additional discovery may be made only where

the arbitrator selected so orders upon a showing of substantial need.  The arbitrator shall have the authority to

entertain a motion to dismiss and/or a motion for summary judgment by any party

and shall apply the standards governing such motions under the Federal Rules of

Civil Procedure.  The arbitrator will

have authority in his or her discretion to grant injunctive relief, award

specific performance and impose sanctions upon any party to any such

arbitration.

 

(d)  The Company and Executive agree that they

will attempt, and they intend that they and the arbitrator should use their

best efforts in that attempt, to conclude the

 

18

 

arbitration

proceeding and have a final decision from the arbitrator within 120 days from

the date of selection of the arbitrator; PROVIDED, HOWEVER, that the arbitrator

shall be entitled to extend such 120-day period for a total of two 120-day

periods.  The arbitrator shall

immediately deliver a written award with respect to the dispute to each of the

parties, who shall promptly act in accordance therewith.

 

(e)  The Company and Executive shall each pay

half of the fees and expenses of the arbitrator.  Each party shall pay its own attorney fees and costs including,

without limitation, fees and costs of any experts.  However, attorney fees and costs incurred by the party that

prevails in any such arbitration commenced pursuant to this Section 11 or

any judicial action or proceeding seeking to enforce the agreement to arbitrate

disputes as set forth in this Section 11 or seeking to enforce any order

or award of any arbitration commenced pursuant to this Section 11 may be

assessed against the party or parties that do not prevail in such arbitration

in such manner as the arbitrator or the court in such judicial action, as the

case may be, may determine to be appropriate under the circumstances.  If any party prevails on a statutory claim

that entitles the prevailing party to a reasonable attorney fees (with or

without expert fees) as part of the costs, the arbitrator may award reasonable

attorney fees (with or without expert fees) to the prevailing party in accord

with such statute.  Any controversy over

whether a dispute is an arbitrable dispute or as to the interpretation or

enforceability of this paragraph with respect to such arbitration shall be

determined by the arbitrator.

 

(f)  In a contractual claim under this Agreement,

the arbitrator shall have no authority to add, delete or modify any term of

this Agreement.

 

IN WITNESS WHEREOF, the parties

have executed this agreement effective as of the date it is last executed below

by either party.

 

	

   

  	

  /s/ Michael T. DuBose

  
	

   

  	

  MICHAEL T.  DUBOSE

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  AFTERMARKET

  TECHNOLOGY CORP.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Joseph

  Salamunovich

  
	

   

  	

  Joseph Salamunovich, Vice President

  
					

 

19Blank

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement

(“Agreement”) is entered into as of July 1, 2002 by and between Barry C.

Kohn, an individual (“Executive”), and Aftermarket Technology Corp., a Delaware

corporation (the “Company” or “ATC”). 

For purposes of this Agreement, unless the context otherwise requires,

references to the “Company” shall include all subsidiaries of the Company and

any successor corporation or corporations which may be the eventual successor

to the present future business and/or assets of the Company.  All capitalized terms used in this Agreement

without definition will have the meanings set forth in Section 6(f).

 

1.  EMPLOYMENT BY THE COMPANY AND INITIAL

EMPLOYMENT TERM.

 

(a)  FULL TIME AND BEST EFFORTS.  Subject to the terms set forth herein, the

Company agrees to employ Executive during the Initial Employment Term (as

defined in Section 1(d)) as Chief Financial Officer of the Company and

Executive hereby accepts such employment. 

In addition, during the Initial Employment Term Executive shall serve as

Chief Financial Officer of ACI Electronics Investment Corp., Aaron’s Automotive

Products, Inc., ACI Electronics Holding Corp., ATC Information Services, Inc.,

ATS Remanufacturing, Inc., Autocraft Industries, Inc., Autocraft Remanufacturing

Corp., Component Remanufacturing Specialists, Inc. and other subsidiaries

expected to result from future acquisitions. 

During the Initial Employment Term, Executive shall 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 will not engage in any other

employment or business activities for any direct or indirect remuneration.  During the Initial Employment Term and the

Extended Employment Term (as defined in Section 5(a), and together with

the Initial Employment Term, the “Employment Term”), Executive will not engage

in any employment or business activities that would be directly harmful or

detrimental to, or that may compete with, the business and affairs of the

Company or any of its subsidiaries, or that would interfere with his duties

hereunder.

 

(b)  DUTIES. 

During the Initial Employment Term, Executive shall serve in an

executive capacity and shall perform such duties as are customarily associated with

his then current title, consistent with the Bylaws of the Company and as

required by the Company’s Board of Directors (the “Board”).  During the Initial Employment Term,

Executive agrees to devote his entire professional time, energies and skills to

his employment hereunder (reasonable vacations and absences because of illness

excepted).

 

(c)  COMPANY POLICIES.  The relationship between the parties during the Employment Term

shall be governed by, and Executive agrees to abide by, the general employment

policies and practices of the Company as in effect from time to time (all of

which are incorporated herein by reference), including but not

 

 

limited to

those relating to protection of confidential information and assignment of

inventions, except that when the terms of this Agreement differ from or are in

conflict with the Company’s general employment policies or practices, this

Agreement shall control.

 

(d)  INITIAL EMPLOYMENT TERM.  The Initial Employment Term of Executive

under this Agreement is defined as the period commencing on the date hereof and

ending on (i) January 28, 2004, (ii) such date as this Agreement may

be terminated pursuant to Section 6, (iii) such date as the Initial

Term may be extended to pursuant to Section 1(e), or (iv) the date of

conversion of the Initial Employment Term to the Extended Employment Term as

provided in Sections 5(a).

 

(e)  RENEWAL. 

Subject to the provisions of Section 5(a), unless the

Company or Executive shall have given the other written notice that the Initial

Employment Term shall not be extended at least 90 days prior to the date on

which the Initial Employment Term is then scheduled to end, the Initial

Employment Term shall be automatically extended for a period of one year, such

procedure to be followed in each such successive period.  Each extension of the Initial Employment

Term shall continue to be subject to the provisions for termination set forth

herein and for conversion to the Extended Employment Term as provided in

Section 5(a).

 

2.  COMPENSATION AND BENEFITS.

 

(a)  SALARY; NONCOMPETITION PAYMENTS.

 

(i)            During the Initial

Employment Term, Executive shall receive for services to be rendered hereunder

an annual base salary (the “Base Salary”) initially equal to Three Hundred

Thousand Dollars ($300,000) payable on a monthly basis, subject to standard

withholdings for taxes and social security and the like.  Executive’s annual Base Salary will be

reviewed annually during the Initial Employment Term by the Board and adjusted

when deemed appropriate by the Board to adequately reflect the scope and

success of the Company’s operations.

 

(ii)           During the Extended

Employment Term, Executive shall receive for services to be rendered hereunder

an annual salary (the “Extended Employment Salary”) equal to Sixty Thousand

Dollars ($60,000) payable on a monthly basis, subject to standard withholdings

for taxes and social security and the like to the extent applicable.

 

(iii)          As consideration

for the covenants set forth in Section 9 insofar as they apply to a period

that extends beyond January 28, 2004, the Company shall pay to Executive,

not later than thirty (30) days after the execution hereof, the sum of Three

Hundred Thousand Dollars ($300,000), subject to standard withholdings for taxes

and social security and the like to the extent applicable.

 

2

 

(b)  PARTICIPATION IN BENEFIT PLANS.  During the Employment Term, Executive shall

be entitled to participate in any group insurance, hospitalization, medical,

dental, health and accident, disability or similar plan or program of the

Company now existing or established hereafter to the extent that he is eligible

under the general provisions thereof. 

The Company may, in its sole discretion and from time to time, establish

additional senior management benefit programs as it deems appropriate.

 

(c)  VACATION. 

During the Initial Employment Term, Executive shall be entitled to a

period of annual vacation time equal to that provided to senior managers by the

Company’s policies and procedures regarding vacation, but in any event not less

than four weeks per year.  The days

selected for Executive’s vacation must be mutually agreeable to the Company and

Executive.

 

(d)  401(K) PLAN.  To the extent legally permitted and subject to all eligibility

requirements, during the Employment Term Executive shall be entitled to place a

portion of his Base Salary into a 401(K) or other qualified deferred tax

annuity plan of the Company or, if the Company does not have such a plan, of

any such plan of any of the Company’s subsidiaries, as may be designated by

Executive.

 

(e)  AUTOMOBILE ALLOWANCE.  During the Initial Employment Term,

Executive shall be entitled to a monthly automobile allowance of $800.00.

 

(f)  RELOCATION EXPENSES.  Executive shall recover all benefits to

which he is entitled under the Company’s relocation policy and will be entitled

to the following additional benefits (to the extent such benefits are not

provided by the Company’s relocation policy): 

(i) reimbursement of actual travel and temporary living expenses

(grossed up to cover standard withholdings for tax and social security

purposes) to cover associated costs relating to temporary living expenses in

the Chicago, Illinois area; and (ii) the reimbursement of actual costs incurred

in transporting household goods to the Chicago, Illinois area and expenses

incidental to the purchase of a new residence in the Chicago, Illinois area.

 

(g)  EQUITY PLAN.  During the Initial Employment Term, Executive will be eligible to

participate in the Senior Management Equity Plan if and when established by the

Company.

 

3.  OPTION AND BONUS PLANS.

 

(a)  PARTICIPATION.  During the Initial Employment Term, Executive shall be entitled

to participate in any stock option plan and any bonus or incentive plan of the

Company currently made available by the Company to executive employees of the

Company or which may be made available in the future to executive employees of

the Company, subject to and on a basis consistent with the terms, conditions

and administration of any such plan; PROVIDED, HOWEVER, that Executive’s annual

cash bonus will be as provided in Section 3(b).  Executive understands that any such plan may be modified or

eliminated in the Company’s

 

3

 

discretion in

accordance with applicable law.  During

the Extended Employment Term (i) Executive will continue to accrue vesting

under stock options and other incentive awards that were granted to Executive

prior to the end of the Initial Employment Term and that include vesting

provisions conditioned upon Executive continuing in the employment of the

Company and (ii) Executive’s employment with the Company will not be

considered to have terminated for any purposes, including for the purpose of

the expiration of stock options or other incentive awards that were granted to

Executive prior to the end of the Initial Employment Term.  During the Extended Employment Term,

Executive will not otherwise be entitled to participate in any stock option

plan or any bonus or incentive plan of the Company.

 

(b)  ANNUAL CASH BONUS.  For all annual periods ending during the Initial Employment Term,

Executive shall receive such cash bonus as the Board shall determine in its

sole discretion based upon the performance of the Company and its subsidiaries,

PROVIDED that the annual cash bonus target for Executive shall not exceed 75%

of the Base Salary for such year.  Such

bonuses may be paid at the end of the year in which such bonus is earned.  During the Extended Employment Term,

Executive will not be entitled to receive any annual or other bonus.

 

4.  REASONABLE BUSINESS EXPENSES AND SUPPORT.  Executive shall be reimbursed for documented

and reasonable business expenses incurred during the Employment Term in

connection with the performance of his duties hereunder.  Executive shall be furnished reasonable

office space, assistance and facilities during the Initial Employment Term.

 

5.  ELECTION TO CONVERT TO EXTENDED EMPLOYMENT

STATUS.

 

(a)  RIGHT TO CONVERT STATUS.  Unless the Company is then entitled to

terminate Executive’s employment pursuant to Section 6(a) or Executive is

then entitled to resign for Good Reason (as defined in Section 6(g)),

either the Company or Executive may elect to convert Executive’s employment status

(the “Conversion”) from that of Chief Financial Officer of the Company to that

of an employee having such position (including, without limitation the position

of a member of the Board) as the Board shall determine, effective as of a date

(the “Conversion Date”) specified in the written notice of such election, but

in no event earlier than the later to occur of January 29, 2004 or the

date that is 30 days after such written notice unless the Company and Executive

otherwise agree in writing.  If

Executive’s status is converted pursuant to the preceding sentence, the terms

of this Section 5 shall govern the provision of services by Executive

after the Conversion Date.  The

“Extended Employment Term” shall mean the period commencing on the Conversion

Date and ending on (i) the fifth anniversary of the Conversion Date,

(ii) such earlier or later date as the Company and Executive may agree

upon in writing, or (iii) the date on which the Extended Employment Term

is terminated pursuant to Section 6.

 

4

 

(b)  EXTENDED EMPLOYMENT DUTIES.  During the Extended Employment Term,

Executive shall retain the status of an employee of the Company and shall be

available to provide the Company, if requested, with such services as shall

from time to time be reasonably and specifically assigned to him by the Board;

PROVIDED, HOWEVER, such services shall not exceed twenty (20) hours per month

or one hundred fifty (150) hours per year. 

The services to be rendered by Executive under this Section 5 shall

include advice regarding the business, management and administration of the

Company and its subsidiaries.  Executive

shall report solely to the Board and shall be subject to direction solely from

the Board in the performance of his duties hereunder.

 

(c)  PLACE OF PERFORMANCE.  All services to be provided by Executive

under this Section 5 shall be provided either by telephone or in person at

the Company’s offices in Chicago, Illinois (or at such other offices as may be

mutually acceptable to Executive and the Company).  In each case, the services shall be provided upon reasonable

prior written notice to Executive by the Company, at such times as may be

reasonably requested by the Company and as may be mutually convenient to

Executive and the Company.

 

(d)  PAYMENTS UPON CONVERSION OF STATUS.  If Executive’s status is converted pursuant

to Section 5(a) (whether the Conversion is at the election of Executive or

the Company or at the agreement of the parties), within ten days after the

Conversion Date Executive (or his estate) shall receive payment for all accrued

Base Salary through the Conversion Date and the Earned Benefits.  In addition:

 

(i)  During the 18 months following the

Conversion 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 employees of the Company (active employees in the case of

benefits provided after the Extended Employment Term).  Medical-related insurance coverage includes

health, dental and/or vision. 

Notwithstanding the above, coverage under the Company’s group medical

plan shall cease on the date (A) Executive fails to pay the required

premium, if any, reasonably on time, (B) Executive becomes eligible for comparable

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.  If Executive dies prior to

the end of the 18 months following the Conversion Date, the foregoing benefit

will terminate.

 

(ii)  The Company shall pay Executive (or his

estate if he dies after the Conversion Date) as Conversion bonus an amount

equal to (A) 150% of Executive’s annual base salary as in effect

immediately prior to the Conversion Date plus (B) 150% of Executive’s

target bonus under the IC Plan for the calendar year in

 

5

 

which the

Conversion shall occur, plus (C) the Prorated Bonus if the Conversion Date

occurs other than within 18 months after a Change in Control or (D) the

Pro Forma Bonus if the Conversion Date occurs within 18 months after a Change

in Control.

 

(y)  If the Conversion Date occurs other than

within 18 months after a Change in Control, the Conversion bonus called for by

clauses (A) and (B) of this Section 5(d))(ii) shall be paid in equal

installments on each of the Company’s regular payroll dates during the 18-month

period commencing on the first such payroll date following the Conversion Date

and the Prorated Bonus called for by clause (C) of this

Section 5(d)(ii) will be paid if and when the Company generally pays

bonuses under the IC Plan to its other employees with respect to the calendar

year in which the Conversion occurs.

 

(z)  If the Conversion Date occurs within 18 months

after a Change in Control, the Conversion bonus called for by clauses (A)

and (B) of this Section 5(d)(ii) and the Pro Forma Bonus called for by

clause (D) of this Section 5(d)(ii) shall be paid within ten days

after the Conversion Date.

 

As a condition

to receiving the payments and benefits provided by this Section 5(d)

(other than payment for all Base Salary accrued through the Conversion Date and

the Earned Benefits, which shall be payable in any case), (I) Executive

shall execute and deliver to the Company on the Conversion Date a general

release in the form attached hereto as Exhibit A and (II) Executive shall

not be in breach of any of the provisions of any of Sections 7, 8 or 9 hereof

at any time during the effectiveness thereof. 

 

6.  TERMINATION OF EMPLOYMENT.  The date on which Executive’s status as an

employee of the Company ceases, under any of the following circumstances, shall

be defined herein as the “Employment Termination Date.”

 

(a)  TERMINATION FOR CAUSE.

 

(i)            TERMINATION OF EMPLOYMENT.  During the Employment Term, the Board may

terminate Executive’s employment with the Company at any time for Cause (as

defined below), immediately upon notice to Executive of the circumstances

leading to such termination for Cause.

 

(ii)           In the event that Executive’s

employment is terminated for Cause during the Initial Employment Term,

Executive shall receive (x) payment for all Base Salary accrued through the

Employment Termination Date, which in this event shall be the date upon which

notice of termination is given, and (y) the Earned Benefits and the Company

shall have no obligation to make any payment in lieu of notice.  In the event that Executive’s employment is

terminated for Cause

 

6

 

during the Extended

Employment Term, Executive shall receive payment for all accrued Extended

Employment Salary through the Employment Termination Date and any amounts not

yet paid pursuant to Section 5(d) and the Company shall have no obligation

to make any other payment or any payment in lieu of notice.

 

(iii)          DEFINITION OF CAUSE.  “CAUSE” means the occurrence or existence of

any of the following with respect to Executive, as determined by a majority of

the disinterested directors of the Board: (a) unsatisfactory performance (other

than unsatisfactory performance resulting from Executive’s incapacity due to

physical or mental illness that would qualify Executive for disability benefits

under the Company’s short-term or long-term disability plans) of Executive’s

duties or responsibilities as determined by the Board, PROVIDED that the

Company has given Executive written notice specifying the unsatisfactory

performance of his duties and responsibilities, which remains uncorrected by

Executive after the lapse of 30 days following the receipt of the written

notice; PROVIDED, FURTHER, that this clause (a) shall not apply during the

Extended Employment Term; (b) a material breach by Executive of any of his

material obligations hereunder which remains uncured after the lapse of 30 days

following the date that the Company has given Executive written notice thereof;

(c) a material breach by Executive of his duty not to engage in any transaction

that represents, directly or indirectly, self-dealing with the Company or any

of its Affiliates which has not been approved by a majority of the

disinterested directors of the Board or of the terms of his employment

relationship with the Company, 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; (d) the repeated unsatisfactory

performance or material breach by Executive of any obligation or duty referred

to in clause (a), (b) or (c) above as to which at least one written notice has

been given pursuant to such clause (a), (b) or (c); (e) any act of willful

dishonesty, misappropriation, embezzlement, intentional fraud or similar

conduct involving the Company or any of its Affiliates; (f) the conviction or

the plea of nolo contendre or the

equivalent in respect of a felony involving moral turpitude; (g) the repeated

non-prescription use of any controlled substance or the repeated use of alcohol

or any other non-controlled substance which, in the reasonable determination of

the Board, in any case described in this clause (g), renders Executive unfit to

serve in his capacity as an officer or employee of the Company or its

Affiliates; or (h) gross negligence or willful misconduct in the performance of

his duties hereunder, which conduct is materially injurious to the Company, or

a willful and material breach of this Agreement.

 

(b)  VOLUNTARY TERMINATION.

 

(i)            TERMINATION OF EMPLOYMENT.  During the Initial Employment Term,

Executive may voluntarily terminate his employment with the Company at any time

upon 90 days prior written notice. 

Within ten days after the Employment Termination Date, Executive shall

receive payment for all accrued Base Salary through the Employment Termination

Date and the Earned Benefits.

 

7

 

(ii)           TERMINATION OF EXTENDED EMPLOYMENT

TERM.  During the Extended Employment

Term, Executive may voluntarily terminate his employment with the Company at

any time upon 30 days prior written notice. 

Within ten days after the Employment Termination Date, Executive shall

receive payment for all accrued Extended Employment Salary through such

Employment Termination Date.

 

(c) 

OTHER TERMINATION OF INITIAL EMPLOYMENT TERM.

 

(i)            Executive’s employment during the

Initial Employment Term shall be terminated if (A)  the Company terminates Executive’s employment at any time during

the Initial Employment Term without Cause upon 30 days’ prior written notice,

(ii) the Company terminates Executive’s employment at any time during the

Initial Employment Term due to his disability, (iii) Executive dies at any time

during the Initial Employment Term or (iv) Executive resigns for Good Reason at

any time during the Initial Employment Term.

 

(ii)           If Executive’s employment is

terminated pursuant to this Section 6(c), within ten days after the

Employment Termination Date, Executive (or his estate) shall receive payment

for all accrued Base Salary through the Employment Termination Date, and the

Earned Benefits.  In addition:

 

(A)  During the 18 months following the

Employment 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 and/or vision. 

Notwithstanding the above, coverage under the Company’s group medical

plan shall cease on the date (1) Executive fails to pay the required

premium, if any, reasonably on time, (2) Executive becomes eligible for

comparable coverage under Medicare or the group health plan of any other

employer, or (3) the Company terminates its group medical plan as to all

its employees.  If Executive dies prior

to the end of the 18 months following the Employment Termination Date, the

foregoing benefit will terminate.

 

(B)  The Company shall pay Executive (or his

estate if he dies after the Employment Termination Date) as severance an amount

equal to (1) 150% of Executive’s annual base salary as in effect

immediately prior to the Employment Termination Date plus (2) 150% of

Executive’s target bonus under the IC Plan for the Termination Year, plus

(3) the Prorated Bonus if the Employment Termination Date occurs other

than within 18 months after a Change in Control or (4) the Pro Forma Bonus

if the Employment Termination Date occurs within 18 months after a Change in

Control.

 

8

 

(y)  If the Employment Termination Date occurs

other than within 18 months after a Change in Control, the severance called for

by Section 6(c)(ii)(B)(1) and (2) shall be paid in equal installments on

each of the Company’s regular payroll dates during the 18-month period

commencing on the first such payroll date following the Employment Termination

Date and the Prorated Bonus called for by Section 6(c)(ii)(B)(3) 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.

 

(z)  If the Employment Termination Date occurs

within 18 months after a Change in Control, the severance called for by

Section 6(c)(ii)(B)(1), (2) and (4) shall be paid within ten days after

the Employment Termination Date.

 

(C)  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 Employment Termination Date.

 

(D)  The Company shall pay Executive (or his

estate if he dies after the Employment Termination Date) the sum of

(I) the Three Hundred Thousand Dollars ($300,000) to be paid pursuant to

Section 2(a)(iii) (to the extent not previously paid (for this purpose,

treating any amounts withheld for taxes and social security and the like as

having been “paid” to Executive)) plus (II) Three Hundred Thousand Dollars

($300,000) as compensation for the Extended Employment Salary that Executive

would have otherwise earned during the Extended Employment Period pursuant to

Section 2(a)(ii).

 

(y)  If the Employment Termination Date occurs

other than within 18 months after a Change in Control, the payment called for

by clause (I) of this Section 6(c)(ii)(D) shall be paid within ten days

after the Employment Termination Date and the payment called for by clause (II)

of this Section 6(c)(ii)(D) shall be paid in equal installments on each of

the Company’s regular payroll dates during the 60-month period commencing on

the first such payroll date following the Employment Termination Date.

 

(z)  If the Employment Termination Date occurs

within 18 months after a Change in Control, all the payments called for by this

Section 6(c)(ii)(D) shall be paid within ten days after the Employment

Termination Date.

 

9

 

As a condition

to receiving the payments and benefits provided by this Section 6(c)(ii)

(other than payment for all Base Salary accrued through the Employment

Termination Date and the Earned Benefits, which shall be payable in any case),

(I) Executive shall execute and deliver to the Company on the Employment

Termination Date a general release in the form attached hereto as Exhibit A and

(II) Executive shall not be in breach of any of the provisions of any of

Sections 7, 8 or 9 hereof at any time during the effectiveness thereof.

 

(d)  OTHER TERMINATION OF EXTENDED EMPLOYMENT

TERM.

 

(i)            If the Extended Employment Term

shall commence, Executive’s employment by the Company shall be terminated if

(A) the Company terminates Executive’s employment by the Company at any

time during the Extended Employment Term without Cause upon 30 days’ prior

written notice, (B) the Company terminates Executive’s employment by the

Company at any time during the Extended Employment Term due to his disability,

(C) Executive dies at any time during the Extended Employment Term or (D)

Executive terminates his employment by the Company for Good Reason at any time

during the Extended Employment Term.

 

(ii)           If Executive’s employment by the

Company is terminated pursuant to this Section 6(d), within ten days after

the Employment Termination Date Executive (or his estate) shall receive payment

for all accrued Extended Employment Salary through the Employment Termination

Date.  In addition to the foregoing

payments specified in this Section 6(d)(ii):

 

(A)  During the 18 months

following the Conversion 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 and/or vision. 

Notwithstanding the above, coverage under the Company’s group medical

plan shall cease on the date (1) Executive fails to pay the required

premium, if any, reasonably on time, (2) Executive becomes eligible for

comparable coverage under Medicare or the group health plan of any other

employer, or (3) the Company terminates its group medical plan as to all

its employees.  If Executive dies prior

to the end of the 18 months following the Conversion Date, the foregoing

benefit will terminate.

 

(B)  The Company shall pay

Executive (or his estate if he dies after the Employment Termination Date) in

lieu of the Extended Employment Salary that Executive would have otherwise

earned during the Extended Employment Term an amount equal to the Extended

Employment Salary payable to Executive during the period between such

Employment Termination Date and the date

 

10

 

on which the

Extended Employment Period would have otherwise ended.

 

(y)  If the Employment Termination Date occurs

other than within 18 months after a Change in Control, the payments called for

by this Section 6(d)(ii)(B) shall be paid in equal monthly installments of

Five Thousand Dollars ($5,000) (subject to pro ration for the first and last

months of payment) on the first day of each month during the remainder of such

Extended Employment Term.

 

(z)  If the Employment Termination Date occurs

within 18 months after a Change in Control, the Payments called for by this

Section 6(d)(ii)(B) shall be paid within ten days after the Employment

Termination Date.

 

As a condition

to receiving the payments and benefits provided by this Section 6(d)(ii)

(other than payment for all accrued Extended Employment Salary through the

Employment Termination Date, which shall be payable in any case),

(I) Executive shall execute and deliver to the Company on the Employment

Termination Date a general release in the form attached hereto as Exhibit A and

(II) Executive shall not be in breach of any of the provisions of any of

Sections 7, 8 or 9 hereof at any time during the effectiveness thereof.

 

(e)  NO OTHER PAYMENTS OR BENEFITS.  Except as otherwise expressly provided in

this Agreement, (i) after the Employment Termination Date, Executive will not

be entitled to any payments from the Company and (ii) on the Employment

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.

 

(f)  WITHHOLDING.  Any amounts payable under this Agreement shall be subject to

standard withholdings for taxes and social security and the like to the extent

applicable.

 

(g)  DEFINITIONS.

 

(i)  “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

 

11

 

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 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 Board

(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

members of the Board 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.

 

(ii)  “CONVERSION YEAR” means the calendar year in

which the Conversion Date occurs.

 

(iii)  “EARNED BENEFITS” means, with respect to a

Conversion or with respect to any termination during the Initial Employment

Term, any (x) bonus that is payable to Executive under the IC Plan with respect

to the calendar year preceding the year in which the Conversion Date or the

Employment Termination Date occurs but that has not been paid prior to the

Conversion Date or the Employment Termination Date, (y) vacation time that has

accrued as of the Conversion Date or the Employment Termination Date, and (z)

other entitlements to cash payments that have accrued as of the Conversion Date

or the Employment Termination Date.

 

12

 

(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)  “GOOD REASON” means the occurrence of any of

the following events that remains uncured 15 days after Executive shall have

given the Company written notice thereof: (x) a reduction (which is not

consented to by Executive) in Executive’s Base Salary or Extended Employment

Salary during the Employment Term, (y) a material reduction in the aggregate

level of Executive’s employee benefits (other than stock-based compensation)

during the Employment Term not permitted or contemplated by the terms of this

Agreement, or (z) a material and adverse change in Executive’s duties or

responsibilities during the Employment Term.

 

(vi)  “IC PLAN” means the Company’s annual

incentive compensation plan or similar plan instituted in place of the

incentive compensation plan.

 

(vii)  “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.

 

(viii)  “PRO FORMA BONUS” means (A) the greater of

(x) Executive’s bonus under the IC Plan for the Conversion Year or the

Termination Year based on the Company’s projected performance for the

Conversion Year or the Termination Year, such projection to be determined by

annualizing the performance for those months of the Conversion Year or the

Termination Year that are completed prior to the Conversion Date or the

Employment Termination Date, or (y) Executive’s target bonus under the IC Plan

for the Conversion Year or the Termination Year multiplied by (B) a fraction

(x) the numerator of which is the number of days that have elapsed in the

Conversion Year or the Termination Year through the Conversion Date or the

Employment Termination Date and (y) the denominator of which is 365.

 

(ix)  “PRORATED BONUS” means the bonus, if any,

that would have been payable to Executive under the IC Plan with respect to the

Conversion Year or the Termination Year multiplied by a fraction (A) the

numerator of which is the number of days that have elapsed in the Conversion

Year or the Termination Year through the Conversion Date or the Employment

Termination Date and (B) the denominator of which is 365.

 

(x)  “TERMINATION YEAR” means the calendar year

in which the Employment Termination Date occurs.

 

(h)  SECTIONS 280G AND 4999 OF THE INTERNAL

REVENUE CODE.  In the event Executive

is, as the result of the operation of this Agreement, the recipient of an

excess parachute payment, the Company will pay to Executive an

 

13

 

additional

gross-up payment in order to put Executive in the same after-tax position that

Executive would have been in had no excise tax been imposed.

 

(i)  EFFECT OF CONVERSION OF STATUS.  Conversion of Executive’s status pursuant to

Section 5(a) (whether at the election of the Company or Executive or at

the agreement of the parties) will not be considered a termination of

employment under this Section 6.

 

7.  PROPRIETARY INFORMATION OBLIGATIONS.  Prior to the date hereof and during the

Employment Term, Executive has had and will have access to, and has and will

become acquainted with, the Company’s confidential and proprietary information,

including but not limited to information or plans regarding the Company’s

customer relationships, personnel, or 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 Company’s Proprietary

Information directly or indirectly, or use it in any way, either during the

Employment Term or at any time thereafter, except as required in the course of

his employment by the Company 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 of the Company, whether prepared by Executive or

otherwise coming into his possession, shall remain the exclusive property of

the Company and shall not be removed from the premises of the Company 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 returned to the Company immediately

following the Employment Termination Date, and no copies thereof shall be kept

by Executive; PROVIDED, HOWEVER, that Executive shall be entitled to retain

documents reasonably related to his interest as a shareholder and any documents

that were personally owned or acquired.

 

8.  NONINTERFERENCE.  Executive agrees that during the period

commencing on the date of this Agreement and ending on the date that is 12

months after the earlier of the Conversion Date or the Employment Termination

Date, he will not, without the prior written consent of a duly authorized

officer of the Company, interfere with the business of the Company by directly

or indirectly soliciting, attempting to solicit, inducing, assisting or

otherwise causing any employee of the Company to terminate his or her

employment in order to become an officer, director, manager, partner, employee,

consultant or independent contractor of, to or for any other employer.  The foregoing will not apply with respect to

any employee (a) who responds to a general public solicitation or advertisement

or (b) whose employment with the Company is terminated by the Company.

 

9.  NONCOMPETITION.  Executive agrees that during the period

commencing on the date of this Agreement and ending on the later to occur of

(a) January 28, 2009 or (b) the date that is 24 months after the

Employment Termination Date, he will not, without the prior written consent of

a duly authorized officer of the Company, directly or indirectly, have an

interest in, be employed by, be connected with, provide services to or have any

interest in, as an employee, consultant, officer, director, partner, manager,

stockholder, member or joint venturer, in any person or entity owning,

managing, controlling, operating or otherwise participating or assisting in any

business

 

14

 

which is similar to or in

competition with the business of the Company as it existed during the

Employment Term in any state in which the Company was conducting business on or

before the Employment Termination Date and continues to do so thereafter;

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

National Association of Securities Dealers, Inc.

 

10. 

MISCELLANEOUS.

 

(a)  NOTICES. 

Any notices provided hereunder must be in writing and shall be deemed

effective upon the earlier of personal delivery (including personal delivery by

telecopy or telex) or the third day after mailing by first class mail to the recipient

at the address indicated below:

 

To the Company:

 

Aftermarket Technology Corp.

1 Oak Hill Center, Suite 400

Westmont, Illinois 60559

Attn: Joseph Salamunovich

Telecopier: (630) 455-2621

 

With a copy to:

 

Gibson, Dunn & Crutcher LLP

333 South Grand Avenue

Los Angeles, California 90071-3197

Attention: Bruce D.  Meyer, Esq.

Telecopier: (213) 229-7520

 

To Executive:

 

Barry C. Kohn

10935 Hastings Land

Powell, Ohio 43065

Telecopier: (614) 889-5042

 

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.  If any term or provision (or any portion thereof) of this

Agreement is determined by a court to be invalid, illegal or incapable of being

enforced by any rule of law or public policy, all other terms and provisions

(or other portions thereof) of this Agreement shall nevertheless remain in full

force and effect so long as the economic or legal substance of the transactions

contemplated hereby is not affected in any manner materially adverse to any

party.  Upon such determination that any

term or provision (or any portion

 

15

 

thereof) is

invalid, illegal or incapable of being enforced, this Agreement shall be deemed

to be modified so as to effect the original intent of the parties as closely as

possible to the end that the transactions contemplated hereby and the terms and

provisions hereof are fulfilled to the greatest extent possible.

 

(c)  ENTIRE AGREEMENT.  This document constitutes the final, complete, and exclusive

embodiment of the entire agreement and understanding between the parties

related to the subject matter hereof and supersedes and preempts any prior or

contemporaneous understandings, agreements, or representations by or between

the parties, written or oral.

 

(d)  COUNTERPARTS.  This Agreement may be executed in 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 assign any of

his duties hereunder and he may not assign any of his rights hereunder without

the prior written consent of the Company.

 

(f)  AMENDMENTS. 

No amendments or other modifications to this Agreement may be made

except by a writing signed by both parties. 

No amendment or waiver of this Agreement requires the consent of any

individual, partnership, corporation or other entity not a party to this

Agreement.  Nothing in this Agreement,

express or implied, is intended to confer upon any third person any rights or

remedies under or by reason of this Agreement.

 

(g)  CHOICE OF LAW.  All questions concerning the construction, validity and

interpretation of this Agreement will be governed by the internal law, and not

the law of conflicts, of the State of Delaware.

 

(h)  INTERPRETATION.  In interpreting this Agreement, all terms shall be construed in

accordance with their fair meaning and not strictly against any party as the

drafter hereof.

 

11. 

ARBITRATION.

 

(a)  Any disputes or claims arising out of or

concerning Executive’s employment with or termination by the Company, whether

arising under theories of liability or damages based upon contract, tort or

statute, shall be determined exclusively by arbitration before a single

arbitrator in accordance with the employment arbitration rules of the American

Arbitration Association (“AAA”), except as modified by this Agreement.  The arbitrator’s decision shall be final and

binding on both parties.  Judgment upon

the award rendered by the arbitrator may be entered in any court of competent

jurisdiction.  In recognition of the

fact that resolution of any disputes or claims in the courts is rarely timely

or cost effective for either party, the Company and Executive enter this mutual

agreement to

 

16

 

arbitrate in

order to gain the benefits of a speedy, impartial and cost-effective dispute

resolution procedure.

 

(b)  Any arbitration shall be held at such place

as the Company and Executive may agree in writing (or in the absence of such

agreement, in Los Angeles, California). 

The arbitrator shall be an attorney with substantial experience in

employment matters, selected by the parties alternately striking names from a

list of five such persons provided by the AAA office located nearest to the

place of arbitration, following a request by the party seeking arbitration for

a list of five such attorneys with substantial professional experience in

employment matters.  If either party

fails to strike names from the list, the arbitrator shall be selected from the

list by the other party.

 

(c)  Each party shall have the right to take the

deposition of one individual and any expert witness designated by the other

party.  Each party shall also have the

right to propound requests for production of documents to any party and the

right to subpoena documents and witnesses for the arbitration.  Additional discovery may be made only where

the arbitrator selected so orders upon a showing of substantial need.  The arbitrator shall have the authority to

entertain a motion to dismiss and/or a motion for summary judgment by any party

and shall apply the standards governing such motions under the Federal Rules of

Civil Procedure.  The arbitrator will

have authority in his or her discretion to grant injunctive relief, award

specific performance and impose sanctions upon any party to any such

arbitration.

 

(d)  The Company and Executive agree that they

will attempt, and they intend that they and the arbitrator should use their

best efforts in that attempt, to conclude the arbitration proceeding and have a

final decision from the arbitrator within 120 days from the date of selection

of the arbitrator; PROVIDED, HOWEVER, that the arbitrator shall be entitled to

extend such 120-day period for a total of two 120-day periods.  The arbitrator shall immediately deliver a

written award with respect to the dispute to each of the parties, who shall

promptly act in accordance therewith.

 

(e)  The Company and Executive shall each pay

half of the fees and expenses of the arbitrator.  Each party shall pay its own attorney fees and costs including,

without limitation, fees and costs of any experts.  However, attorney fees and costs incurred by the party that

prevails in any such arbitration commenced pursuant to this Section 11 or

any judicial action or proceeding seeking to enforce the agreement to arbitrate

disputes as set forth in this Section 11 or seeking to enforce any order

or award of any arbitration commenced pursuant to this Section 11 may be

assessed against the party or parties that do not prevail in such arbitration

in such manner as the arbitrator or the court in such judicial action, as the

case may be, may determine to be appropriate under the circumstances.  If any party prevails on a statutory claim

that entitles the prevailing party to a reasonable attorney fees (with or

without expert fees) as part of the costs, the arbitrator may award reasonable

attorney fees (with or without expert fees) to the prevailing

 

17

 

party in

accord with such statute.  Any

controversy over whether a dispute is an arbitrable dispute or as to the

interpretation or enforceability of this paragraph with respect to such

arbitration shall be determined by the arbitrator.

 

(f)  In a contractual claim under this Agreement,

the arbitrator shall have no authority to add, delete or modify any term of

this Agreement.

 

IN WITNESS WHEREOF, the parties

have executed this agreement effective as of the date it is last executed below

by either party.

 

	

   

  	

  /s/ Barry C. Kohn

  
	

   

  	

  BARRY C. KOHN

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  AFTERMARKET

  TECHNOLOGY CORP.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ Joseph

  Salamunovich

  
	

   

  	

  Joseph Salamunovich, Vice President

  
					

 

18

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