Document:

exv10w15

Exhibit 10.15

UNITED COMPONENTS, INC.

SEVERANCE AGREEMENT

     This Severance Agreement (the “Agreement”) is made and entered into effective as of December
23, 2008 (the “Effective Date”), by and between Daniel Johnston (the “Executive”), United
Components, Inc. (the “Company”), and, solely with respect to Section 3(d), UCI Holdco, Inc.
(“Holdco”). Certain capitalized terms used in this Agreement are defined in Section 1 below.

AGREEMENT

     In consideration of the mutual covenants herein contained and the continued employment of
Executive by the Company (or one of its Affiliates), the parties agree as follows:

     1. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:

          (a) Affiliate. “Affiliate” shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with, such Person where
“control” shall have the meaning given such term under Rule 405 of the Securities Act. Affiliates
of Carlyle Partners III, L.P., a Delaware limited partnership, shall include all Persons directly
or indirectly controlled by TC Group, LLC, a Delaware limited liability company.

          (b) Board. “Board” shall mean the Board of Directors of the Company or its Parent.

          (c) Cause. “Cause” shall mean:

               (i) the Executive’s failure to use his reasonable best efforts to follow a legal written order
of the Board or the CEO, other than any such failure resulting from the Executive’s Disability, and
such failure is not remedied within 30 days after receipt of notice;

               (ii) Executive’s gross or willful misconduct with regard to the Company;

               (iii) Executive’s conviction of a felony or crime involving material dishonesty;

               (iv) Executive’s fraud or personal dishonesty involving the Company’s assets (but excluding
expense reimbursement disputes as to which Executive had a reasonable good faith belief that his
conduct was within the policies of the Company) or breach of fiduciary responsibility against the
Company or any of its businesses; or

               (v) the Executive’s unlawful use (including being under the influence) or possession of
illegal drugs on the Company’s premises or while performing the Executive’s duties and
responsibilities under this Agreement.

          (d) Change in Control. “Change in Control” shall mean a change in ownership or
control of the Company or Parent effected through a transaction or series of transactions (other
than an offering of common stock of the Company or Parent to the general public through a
registration statement filed with the Securities and Exchange Commission) whereby any “person” or
related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange
Act) (other than the Company, Parent or any of their
respective subsidiaries, an employee benefit
plan maintained by the Company, Parent or any of their respective subsidiaries, a Principal
Stockholder, any Affiliate of a Principal Stockholder or a “person” that, prior to such
transaction, directly or indirectly controls, is controlled by, or is under common control with,
the Company, Parent or a Principal Stockholder) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company or
Parent possessing more than fifty percent (50%) of the total combined voting power of the Company’s
or Parent’s securities outstanding immediately after such acquisition.

 

 

          (e) CEO. “CEO” shall mean the Chief Executive Officer of the Company.

          (f) Disability. “Disability” shall mean the Executive’s inability to perform, with or
without reasonable accommodation, the essential functions of Executive’s duties as an employee of
the Company for a total of three months during any six-month period as a result of incapacity due
to mental or physical illness as determined by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal representative, with such agreement as to
acceptability not to be unreasonably withheld or delayed.

          (g) Exchange Act. “Exchange Act” shall mean the Securities and Exchange Act of 1934,
as amended.

          (h) Good Reason.

               (i) “Good Reason” shall mean:

                    (1) a material diminution in the nature or scope of the Executive’s responsibilities, duties
or authority;

                    (2) a material diminution in the Executive’s compensation; or

                    (3) a material breach of this Agreement by the Company.

               (ii) Notwithstanding the foregoing, a Termination of Employment shall not be treated as a
Termination of Employment for Good Reason unless the Executive shall have delivered to the Company
a notice of termination stating that the Executive intends to terminate employment for Good Reason
within ninety (90) days, and such Termination of Employment must occur within one year, of the
Executive’s having actual knowledge of the initial occurrence of one or more of such events,
provided, in each such event, the Company fails to cure within thirty (30) days of receipt of such
notice of termination.

          (i) Parent. “Parent” shall mean UCI Holdco, Inc.

          (j) Person. “Person” shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.

          (k) Principal Stockholder. “Principal Stockholder(s)” shall mean Carlyle Partners
III, L.P., a Delaware limited partnership, or any of its Affiliates to which (a) the Carlyle
Partners III, L.P. or any other Person transfers shares of common stock of Parent, or (b) Parent
issues shares of common stock of Parent.

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          (l) Securities Act. “Securities Act” shall mean the Securities Act of 1933, as
amended.

          (m) Termination of Employment. “Termination of Employment” shall mean the time when
the engagement of the Executive as an employee of the Company is terminated by the Company, but
excluding terminations where there is simultaneous commencement by the Executive of a relationship
with the Company or any of its Affiliates as an employee. In no event shall a “Termination of
Employment” occur
under this Agreement until the Executive incurs a “separation from service” within the meaning
of Treasury Regulation Section 1.409A-1(h).

          (n) Termination Date. “Termination Date” shall mean the effective date of the
Executive’s Termination of Employment.

     2. Term of Agreement. This Agreement shall terminate upon the date that all
obligations of the parties under this Agreement have been satisfied.

     3. Severance; UCI Shares.

          (a) Termination Without Cause. If the Executive experiences a Termination of
Employment following the date hereof as a result of the Company terminating the Executive without
Cause or the Executive terminating his employment for Good Reason, then, subject to the Executive
signing and not revoking the Release as set forth below and subject to the continued compliance of
the Executive with Sections 4 and 5 of this Agreement, the Executive shall be entitled to (i)
severance equal to twelve (12) months of Executive’s annual base salary as in effect on the
Termination Date (provided that such severance shall not be less than the Executive’s base salary
in effect as of the date of this Agreement), (ii) a prorated amount of the Executive’s annual bonus
for the year in which the termination occurs (based upon a bonus target percentage no less than the
percentage applicable to Executive as of the date of this Agreement), paid at the same UCI funding
level applicable to other senior executives of the Company, but subject to a maximum funding level
of 100%, and (iii) reimbursement for, or direct payment to the carrier for, the premium costs under
COBRA for the Executive and, where applicable, his spouse and dependents, until the earlier of (x)
twelve (12) months following the Termination Date, and (y) the date Executive is employed by
another employer, under the same or comparable Company group medical and dental plans to the group
medical and dental plans that Executive was participating in as of the Termination Date; provided
that if a same or comparable Company group plan is, at any time during such twelve month period,
not available generally to senior officers of the Company, the Executive shall receive
reimbursement for, or direct payment to the carrier for, the premium costs under COBRA under a
group plan that is available to such senior officers of the Company. For the avoidance of doubt,
the Executive shall not be entitled to severance in the event the Executive experiences a
Termination of Employment for Cause, or before September 30, 2009 due to death, Disability, or the
Executive’s resignation for any reason other than Good Reason.

          (b) Termination on or Following September 30, 2009. If the Executive experiences a
Termination of Employment for any reason (other than as a result of the Company terminating the
Executive for Cause) on or after September 30, 2009, including the Executive’s voluntary
resignation for any reason, then, provided that the Executive continues to perform his job
responsibilities in a manner reasonably comparable to his current level of performance as of the
date hereof (and continues to commute to the Company’s executive offices in Evansville, IN
consistent with his current practice) through September 30, 2009, and subject to (A) the Executive
signing and not revoking the Release as set forth below and (B) the continued compliance of the
Executive with Sections 4 and 5 of this Agreement, the Executive shall be entitled to (i) severance
equal to twelve (12) months of Executive’s annual base salary as in effect on the

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Termination Date
(provided that such severance shall not be less than the Executive’s base salary in effect as of
the date of this Agreement), (ii) a prorated amount of the Executive’s annual bonus for the year in
which the termination occurs (based upon a bonus target percentage no less than the percentage
applicable to Executive as of the date of this Agreement), paid at the same UCI funding level
applicable to other senior executives of the Company, but subject to a maximum funding level of
100%, and (iii) reimbursement for, or direct payment to the carrier for, the premium costs under
COBRA for the Executive and, where applicable, his spouse and dependents, until the earlier of (x)
twelve (12) months following the Termination Date, and (y) the date Executive is employed by
another employer, under the same or comparable Company group medical and dental plans to the group
medical and dental plans that Executive was participating in as of the Termination Date; provided
that if a same or comparable Company group plan is, at any time during such
twelve month period, not available generally to senior officers of the Company, the Executive
shall receive reimbursement for, or direct payment to the carrier for, the premium costs under
COBRA under a group plan that is available to such senior officers of the Company. For the
avoidance of doubt, if Executive is entitled to severance payments under this Section 3(b), he
shall not be entitled to any severance or other payments under Sections 3(a) or 3(c).

          (c) Termination on or Following a Change in Control. If the Executive experiences a
Termination of Employment as a result of the Company terminating the Executive without Cause or the
Executive terminating his employment for Good Reason on or following the date of a Change in
Control, then subject to the Executive signing and not revoking the Release as set forth below and
subject to the continued compliance of the Executive with Sections 4 and 5 of this Agreement, the
Executive shall be entitled to (i) severance equal to twenty-four (24) months of Executive’s annual
base salary as in effect on the Termination Date (provided that such severance shall not be less
than the Executive’s base salary in effect as of the date of this Agreement), and (ii)
reimbursement for, or direct payment to the carrier for, the premium costs under COBRA for the
Executive and, where applicable, his spouse and dependents, until the earlier of (x) twenty-four
(24) months following the Termination Date, and (y) the date Executive is employed by another
employer, under the same or comparable Company group medical and dental plans to the group medical
and dental plans that Executive was participating in as of the Termination Date; provided that if a
same or comparable Company group plan is, at any time during such twelve month period, not
available generally to senior officers of the Company, the Executive shall receive reimbursement
for, or direct payment to the carrier for, the premium costs under COBRA under a group plan that is
available to such senior officers of the Company. For the avoidance of doubt, if Executive is
entitled to receive payments under this Section 3(c), he shall not be entitled to any severance or
other payments under Sections 3(a) or 3(b).

          (d) UCI Shares. Subject to the Executive signing and not revoking the Release as set
forth below and subject to the continued compliance of the Executive with Sections 4 and 5 of this
Agreement, the Company and Holdco each agree that neither the Company nor Holdco will exercise any
right either may have (whether pursuant to the stockholders agreement of Holdco, any stock option
agreement, award agreement or stock purchase agreement to which the Executive is a party, or any
stock option or equity incentive plan of the the Company or Holdco, or otherwise) to repurchase any
of the shares of common stock of Holdco (“UCI Shares”) held by the Executive (or any permitted
transferee) as of the Termination Date or which are issued, or are to be issued, to the Executive
pursuant to the Executive’s exercise of any option to purchase UCI Shares held by the Executive as
of the Termination Date.

          (e) Release; Payment Timing; Separate Payments. Notwithstanding any provision to the
contrary in this Agreement, no payments shall be made pursuant to Sections 3(a), (b) or (c) unless
(i) on or following the Termination Date and on or prior to the 50th day following the
Termination Date the Executive executes a waiver and release of claims agreement in the form
attached hereto as Exhibit A (the “Release”),

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which Release may be amended by the
Company to reflect changes in applicable laws and regulations, and (ii) such Release shall not have
been revoked by the Executive on or prior to the 8th day following the date of the
Release. The severance payments shall be payable in the form of salary continuation and shall be
paid at the same time and in the same manner as the Executive’s annual base salary would have been
paid if Executive had remained in active employment with the Company through the end of the
applicable severance period in accordance with the Company’s normal payroll practices as in effect
on the Termination Date, except that any payments that would otherwise have been made before the
first normal payroll payment date falling on or after the sixtieth (60th) day after the date of
termination of Executive’s employment (the “First Payment Date”) shall be made on the First
Payment Date. Notwithstanding the foregoing, the prorated bonus component of the severance
payments provided in Sections 3(a) and (b) shall be paid in the calendar year following the
calendar year in which the Termination Date occurs at such time as bonuses are paid to other senior
executive officers of the Company. Each separate severance installment payment shall be a separate
payment under this Agreement for all purposes.

     4. Non-Competition; Non-Solicitation; Non-Disparagement.

          (a) The Executive shall not, at any time while employed by the Company and for twelve (12)
months after the Termination Date with respect to the Executive’s Termination of Employment for any
reason, directly or indirectly engage in, have any equity interest in, interview for a potential
employment or consulting relationship with or manage or operate any person, firm, corporation,
partnership or business (whether as director, officer, employee, agent, representative, partner,
security holder, consultant or otherwise) that engages in any business which competes with the
Company anywhere in the world; provided, however, that the Executive shall be permitted to acquire
and/or hold a passive stock interest in such a business if the stock interest acquired and/or held
is publicly traded and constitutes not more than two percent (2%) of the outstanding voting
securities of such business.

          (b) The Executive shall not, at any time while employed by the Company and for twelve (12)
months after the Termination Date with respect to the Executive’s Termination of Employment for any
reason, directly or indirectly, recruit or otherwise solicit or induce any employee, customer,
subscriber or supplier of the Company (i) to terminate its employment or arrangement with the
Company, or (ii) to otherwise change its relationship with the Company.

          (c) In the event the terms of this Section 4 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a period of time or over
too great a geographical area or by reason of its being too extensive in any other respect, it will
be interpreted to extend only over the maximum period of time for which it may be enforceable, over
the maximum geographical area as to which it may be enforceable, or to the maximum extent in all
other respects as to which it may be enforceable, all as determined by such court in such action.

          (d) As used in this Section 4, (i) the term “Company” shall include the Company and its direct
or indirect parents and subsidiaries.

          (e) The Executive agrees, while employed by the Company and following the Termination Date, to
refrain from disparaging the Company and its Affiliates, including any of its services,
technologies or practices, or any of its directors, officers, agents, representatives or
stockholders, either orally or in writing.

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     5. Nondisclosure of Proprietary Information.

          (a) Except in connection with the faithful performance of the Executive’s duties as an
employee of the Company or pursuant to Section 5(c) and (e), the Executive shall, in perpetuity,
maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose
or publish, or use for his or her benefit or the benefit of any person, firm, corporation or other
entity any confidential or proprietary information or trade secrets of or relating to the Company
(including, without limitation, business plans, business strategies and methods, acquisition
targets, intellectual property in the form of patents, trademarks and copyrights and applications
therefor, ideas, inventions, works, discoveries, improvements, information, documents, formulae,
practices, processes, methods, developments, source code, modifications, technology, techniques,
data, programs, other know-how or materials, owned, developed or possessed by the Company, whether
in tangible or intangible form, information with respect to the Company’s operations, processes,
products, inventions, business practices, finances, principals, vendors, suppliers, customers,
potential customers, marketing methods, costs, prices, contractual relationships, regulatory
status, prospects and compensation paid to employees or other terms of employment), or deliver to
any person, firm, corporation or other entity any document, record, notebook, computer program or
similar repository of or containing any such confidential or proprietary information or trade
secrets. The parties hereby stipulate and agree that as between them the foregoing matters are
important, material and confidential proprietary information and trade secrets and affect the
successful conduct of the businesses of the Company (and any successor or assignee of the Company).

          (b) Upon a Termination of Employment for any reason, the Executive will promptly deliver to
the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, or any other documents concerning the Company’s customers,
business plans, marketing strategies, products or processes.

          (c) The Executive may respond to a lawful and valid subpoena or other legal process but shall
give the Company the earliest possible notice thereof, shall, as much in advance of the return date
as possible, make available to the Company and its counsel the documents and other information
sought and shall assist such counsel at Company’s expense in resisting or otherwise responding to
such process.

          (d) As used in this Section 5 and Section 6, the term “Company” shall include the Company and
its direct or indirect parents and subsidiaries.

          (e) Nothing in this Agreement shall prohibit the Executive from (i) disclosing information and
documents when required by law, subpoena or court order (subject to the requirements of Section
5(c) above), (ii) disclosing information and documents to his attorney or tax adviser for the
purpose of securing legal or tax advice, (iii) disclosing the Executive’s post-employment
restrictions in this Agreement in confidence to any potential new employer, or (iv) retaining, at
any time, his personal correspondence, his personal rolodex and documents related to his own
personal benefits, entitlements and obligations.

     6. Inventions. All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of the Company, whether
or not patentable, copyrightable, registrable as a trademark, or reduced to writing, that the
Executive may discover, invent or originate during the time the Executive is employed by the
Company, either alone or with others and whether or not during working hours or by the use of the
facilities of the Company (“Inventions”), shall be the exclusive property of the Company.
The Executive shall promptly disclose all Inventions to the Company, shall execute at the request
of the Company any assignments or other documents the Company may deem reasonably necessary to
protect or perfect its rights therein, and shall assist the Company, upon reasonable request and at
the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. The
Executive hereby appoints the Company as his attorney-in-fact to execute on his behalf any
assignments or other documents reasonably deemed necessary by the Company to protect or perfect its
rights to any Inventions.

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     7. Injunctive Relief. It is recognized and acknowledged by the Executive that a
breach of the covenants contained in Sections 4, 5 and 6 will cause irreparable damage to Company
and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that
the remedies at law for any such breach will be inadequate. Accordingly, the Executive agrees that
in the event of a breach of any of the covenants contained in Sections 4, 5 and 6, in addition to
any other remedy which may be available at law or in equity, the Company will be entitled to
specific performance and injunctive relief without having to prove damages.

     8. Assignment and Successors.

          (a) Company’s Successors. The Company may assign its rights and obligations under
this Agreement to any entity, including any successor to all or substantially all the assets of the
Company, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder
as security for indebtedness of the Company and its Affiliates. This Agreement shall be binding
upon and inure to the benefit of the Company and its respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as
applicable.

          (b) Executive’s Successors. Without the written consent of the Company, Executive
shall not assign or transfer this Agreement or any right or obligation under this Agreement to any
other person or
entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Executive
hereunder shall be binding upon and inure to the benefit of, and be enforceable by, Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

     9. Notices.

          (a) General. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the
case of the Executive, mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company, mailed notices shall
be addressed to the Company’s Chief Executive Officer at its headquarters.

          (b) Notice of Termination. Any termination by the Company for Cause shall be
communicated by a notice of termination to the Executive given in accordance with this Section 9.
Such notice shall indicate the specific termination provision in this Agreement relied upon, shall
set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and shall specify the Termination Date (which shall
be not more than 30 days after the giving of such notice).

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     10. Reimbursements and In-kind Benefits. Notwithstanding anything to the contrary in
this Agreement, in-kind benefits and reimbursements provided under this Agreement during any tax
year of the Executive shall not affect in-kind benefits or reimbursements to be provided in any
other tax year of the Executive, except for the reimbursement of medical expenses referred to in
Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit.
Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely
submitted by the Executive and, if timely submitted, reimbursement payments shall be made to the
Executive as soon as administratively practicable following such submission, but in no event later
than the last day of the Executive’s taxable year following the taxable year in which the expense
was incurred. In no event shall the Executive be entitled to any reimbursement payments after the
last day of Executive’s taxable year following the taxable year in which the expense was incurred.
This paragraph shall only apply to in-kind benefits and reimbursements that would result in taxable
compensation income to the Executive.

     11. Miscellaneous Provisions.

          (a) Survival. Provisions of this Agreement which by their terms must survive the
termination of this Agreement in order to effectuate the intent of the parties (including, without
limitation Sections 3 to 6) will survive any such termination for such periods as may be
appropriate under the circumstances.

          (b) No Duty to Mitigate; Effect on Other Arrangements. The Executive shall not be
required to mitigate the amount of any payment contemplated by this Agreement; however, the
severance payments received by the Executive pursuant to this Agreement shall supersede and replace
any cash severance payments and Company-paid healthcare continuation that the Executive may be
entitled to receive under the terms of any other employment or severance agreements or arrangements
with the Company. Except as otherwise provided in this Agreement, this Agreement shall not affect
the rights of the Executive under or the entitlement of the Executive to participate in any
employee benefit plans or programs of the Company that are applicable to the Executive, in
accordance with the terms and conditions or such plans or programs.

          (c) Entire Agreement. The terms of this Agreement are intended by the parties to be
the final expression of their agreement with respect to any severance payments payable to the
Executive in connection with his Termination of Employment and shall supersede all prior
understandings and agreements, whether written or oral, including the severance provided under the
letter agreement dated May 21, 2007. The parties further intend that this Agreement shall
constitute the complete and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the
terms of this Agreement.

          (d) Waiver. No provision of this Agreement may be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Executive
and by an authorized officer of the Company (other than the Executive). No waiver by either party
of any breach of, or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the same condition or
provision at another time.

          (e) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules,
of the State of Indiana.

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          (f) Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before an arbitrator in
Evansville, Indiana in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having jurisdiction,
provided, however, that the Company shall be entitled to seek a restraining order or injunction in
any court of competent jurisdiction to prevent any continuation of any violation of the provisions
of Sections 4, 5 and 6 of the Agreement and the Executive hereby consents that such restraining
order or injunction may be granted without requiring the Company to post a bond. Only individuals
who are (i) lawyers engaged fulltime in the practice of law; and (ii) on the AAA register of
arbitrators shall be selected as an arbitrator. Within 20 days of the conclusion of the
arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law.
It is mutually agreed that the written decision of the arbitrator shall be valid, binding, final
and non-appealable, provided however, that the parties hereto agree that the arbitrator shall not
be empowered to award punitive damages against any party to such arbitration. The arbitrator shall
require the non-prevailing party to pay the arbitrator’s full fees and expenses or, if in the
arbitrator’s opinion there is no prevailing party, the arbitrator’s fees and expenses will be borne
equally by the parties thereto. In the event action is brought to enforce the provisions of this
Agreement pursuant to this Section 10(f), the non-prevailing parties shall be required to pay the
reasonable attorney’s fees and expenses of the prevailing parties to the extent determined to be
appropriate by the arbitrator, acting in its sole discretion.

          (g) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.

          (h) Employment Taxes. All payments made pursuant to this Agreement shall be subject
to withholding of applicable income and employment taxes.

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

[remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year first above written.

	 	 	 	 	 	 	 
	COMPANY:	 	United Components, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	      /s/ Keith Zar
 

	 	 
	 

	 	Title:
	 	     Vice President	 	 

	 	 	 	 	 	 	 
	EXECUTIVE:

	 	 	 	/s/ Daniel J. Johnston	 	 
	 	 	 	 	 
	 	 	Signature	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Daniel J. Johnston	 	 
	 	 	 	 	 
	 	 	Printed Name	 	 
	 
	 	 	 	 	 	 

     Solely with respect to Section 3(d)

	 	 	 	 	 	 	 
	HOLDCO:	 	UCI Holdco, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Keith Zar
 

	 	 
	 

	 	Title:
	 	     Vice President	 	 

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EXHIBIT A

General Release and Waiver

     For and in consideration of the payments and other benefits due to Daniel Johnston (the
“Executive”) pursuant to the Severance Agreement,
dated as of December 23, 2008
(the “Severance Agreement”), by and between United Components, Inc. (the “Company”)
and the Executive, and for other good and valuable consideration, the Executive hereby agrees, for
the Executive, the Executive’s spouse and child or children (if any), the Executive’s heirs,
beneficiaries, devisees, executors, administrators, attorneys, personal representatives, successors
and assigns, to forever release, discharge and covenant not to sue the Company, or any of its
divisions, affiliates, subsidiaries, parents, branches, predecessors, successors, assigns, and,
with respect to such entities, their officers, directors, trustees, employees, agents,
shareholders, administrators, general or limited partners, representatives, attorneys, insurers and
fiduciaries, past, present and future (the “Released Parties”) from any and all claims of
any kind arising out of, or related to, his employment with the Company, its affiliates and
subsidiaries (collectively, with the Company, the “Affiliated Entities”), the Executive’s
separation from employment with the Affiliated Entities, which the Executive now has or may have
against the Released Parties, whether known or unknown to the Executive, by reason of facts which
have occurred on or prior to the date that the Executive has signed this Release. Such released
claims include, without limitation, any and all claims relating to the foregoing under federal,
state or local laws pertaining to employment, including, without limitation, the Age Discrimination
in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e
et. seq., the Fair Labor Standards Act, as amended, 29 U.S.C. Section 201 et. seq., the Americans
with Disabilities Act, as amended, 42 U.S.C. Section 12101 et. seq. the Reconstruction Era Civil
Rights Act, as amended, 42 U.S.C. Section 1981 et. seq., the Rehabilitation Act of 1973 , as
amended, 29 U.S.C. Section 701 et. seq., the Family and Medical Leave Act of 1992, 29 U.S.C.
Section 2601 et. seq., and any and all state or local laws regarding employment discrimination
and/or federal, state or local laws of any type or description regarding employment, including but
not limited to any claims arising from or derivative of the Executive’s employment with the
Affiliated Entities, as well as any and all such claims under state contract or tort law.

     The Executive has read this Release carefully, acknowledges that the Executive has been given
at least twenty-one (21) days to consider all of its terms and has been advised to consult with an
attorney and any other advisors of the Executive’s choice prior to executing this Release, and the
Executive fully understands that by signing below the Executive is voluntarily giving up any right
which the Executive may have to sue or bring any other claims against the Released Parties,
including any rights and claims under the Age Discrimination in Employment Act. The Executive also
understands that the Executive has a period of seven (7) days after signing this Release within
which to revoke his agreement, and that neither the Company nor any other person is obligated to
make any payments or provide any other benefits to the Executive pursuant to the Severance
Agreement until eight (8) days have passed since the Executive’s signing of this Release without
the Executive’s signature having been revoked other than any accrued obligations or other benefits
payable pursuant to the terms of the Company’s normal payroll practices or employee benefit plans.
Finally, the Executive has not been forced or pressured in any manner whatsoever to sign this
Release, and the Executive agrees to all of its terms voluntarily.

- 11 -

 

     Notwithstanding anything else herein to the contrary, this Release shall not affect: (i) the
Company’s obligations under Sections 3(a) or (b) of the Severance Agreement or under any
compensation or employee benefit plan, program or arrangement (including, without limitation,
obligations to the Executive under any stock option, stock award or agreements or obligations under
any pension, deferred compensation or retention plan) provided by the Affiliated Entities where the
Executive’s compensation or benefits are intended to continue or the Executive is to be provided
with compensation or benefits, in accordance with the express written terms of such plan, program
or arrangement, beyond the date of the Executive’s termination; or (ii) rights to indemnification,
contribution or liability insurance coverage the Executive may have under the by-laws of the
Company or applicable law.

     This Release is subject to Sections 11(e) and (f) of the Severance Agreement. This
Release is final and binding and may not be changed or modified except in a writing signed by both
parties.

	 	 	 	 	 	 	 	 	 
	Date	 	 	 	DANIEL JOHNSTON	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	   
	 
	 	 	 	 	 	 	 	 
	Date	 	 	 	UNITED COMPONENTS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	   

- 12 -exv10w23

Exhibit 10.23

SUNRISE SENIOR LIVING

EXECUTIVE DEFERRED COMPENSATION PLAN

As Amended and Restated Effective January 1, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE 1 — Definitions	 	 	1	 
	 
	 	1.1	 	Annual Deferral	 	 	1	 
	 
	 	1.2	 	Beneficiary	 	 	1	 
	 
	 	1.3	 	Code	 	 	1	 
	 
	 	1.4	 	Committee	 	 	1	 
	 
	 	1.5	 	Company	 	 	1	 
	 
	 	1.6	 	Compensation	 	 	1	 
	 
	 	1.7	 	Crediting Rate	 	 	1	 
	 
	 	1.8	 	Deferral Account	 	 	1	 
	 
	 	1.9	 	Deferral Contribution Period	 	 	1	 
	 
	 	1.10	 	Deferral Commitment or Deferral Unit	 	 	2	 
	 
	 	1.11	 	Deferral Election Form	 	 	2	 
	 
	 	1.12	 	Eligible Employee	 	 	2	 
	 
	 	1.13	 	Employer	 	 	2	 
	 
	 	1.14	 	Employer Contribution Credit	 	 	2	 
	 
	 	1.15	 	ERISA	 	 	2	 
	 
	 	1.16	 	Participant	 	 	2	 
	 
	 	1.17	 	Plan	 	 	2	 
	 
	 	1.18	 	Plan Year	 	 	2	 
	 
	 	1.19	 	Separation from Service	 	 	2	 
	 
	 	1.20	 	Specified Employee	 	 	3	 
	 
	 	1.21	 	Unforeseeable Emergency	 	 	3	 
	 
	 	1.22	 	Valuation Date	 	 	3	 
	 
	 	1.23	 	Vesting Schedule	 	 	3	 
	ARTICLE 2 — Participation	 	 	4	 
	 
	 	2.1	 	Deferral Election Form	 	 	4	 
	 
	 	2.2	 	Initial Eligibility	 	 	4	 
	 
	 	2.3	 	Performance-Based Compensation	 	 	4	 
	 
	 	2.4	 	Continuation of Participation	 	 	4	 
	 
	 	2.5	 	Suspension of Deferral Commitment	 	 	4	 
	ARTICLE 3 — Form of Deferral Commitments	 	 	5	 
	 
	 	3.1	 	Minimum Deferral Commitment	 	 	5	 
	 
	 	3.2	 	Maximum Deferral Commitment	 	 	5	 
	ARTICLE 4 — Deferral Accounts	 	 	5	 
	 
	 	4.1	 	Deferral Accounts	 	 	5	 
	 
	 	4.2	 	Investment of Deferral Accounts	 	 	5	 
	 
	 	4.3	 	Statements of Account	 	 	5	 
	 
	 	4.4	 	Vesting of Deferral Accounts	 	 	6	 
	ARTICLE 5 — Employer Contributions	 	 	6	 
	 
	 	5.1	 	Employer Contribution Credits	 	 	6	 
	 
	 	5.2	 	Vesting	 	 	6	 
	ARTICLE 6 — Payment of Benefits	 	 	6	 
	 
	 	6.1	 	Payment of Benefits	 	 	6	 
	 
	 	6.2	 	Form of Benefits	 	 	6	 

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	6.3	 	In-Service Distributions	 	 	6	 
	 
	 	6.4	 	Further Deferrals	 	 	7	 
	 
	 	6.5	 	Unforeseeable Emergency Distributions	 	 	7	 
	ARTICLE 7 — Survivor Benefits	 	 	7	 
	 
	 	7.1	 	Pre—Retirement Survivor Benefit	 	 	8	 
	ARTICLE 8 — Administration of the Plan	 	 	8	 
	 
	 	8.1	 	Administration	 	 	8	 
	 
	 	8.2	 	Determination of Benefits	 	 	8	 
	 
	 	8.3	 	Liability for Benefit Payments	 	 	8	 
	 
	 	8.4	 	Expenses	 	 	8	 
	ARTICLE 9 — Beneficiary Designation	 	 	9	 
	 
	 	9.1	 	Beneficiary Designation	 	 	9	 
	 
	 	9.2	 	New Beneficiary Designation	 	 	9	 
	 
	 	9.3	 	Failure to Designate Beneficiary	 	 	9	 
	 
	 	9.4	 	Proper Beneficiary	 	 	9	 
	ARTICLE 10 — Amendment and Termination of the Plan	 	 	9	 
	 
	 	10.1	 	Amendment of the Plan	 	 	9	 
	 
	 	10.2	 	Termination of the Plan	 	 	9	 
	ARTICLE 11 — General Provisions	 	 	10	 
	 
	 	11.1	 	Nonassignability	 	 	10	 
	 
	 	11.2	 	Participant’s Rights Unsecured	 	 	10	 
	 
	 	11.3	 	Protective Provisions	 	 	10	 
	 
	 	11.4	 	Tax Liability	 	 	10	 
	 
	 	11.5	 	Successors of the Company	 	 	10	 
	 
	 	11.6	 	ERISA Plan	 	 	11	 
	 
	 	11.7	 	Domestic Relations Orders	 	 	11	 
	 
	 	11.8	 	Employment Not Guaranteed	 	 	11	 
	 
	 	11.9	 	Construction	 	 	11	 
	 
	 	11.10	 	Severability	 	 	11	 
	 
	 	11.11	 	Incapacity of Recipient	 	 	11	 
	 
	 	11.12	 	Applicable Law	 	 	11	 
	 
	 	11.13	 	Payment Upon Income Inclusion	 	 	12	 
	 
	 	11.14	 	Notice	 	 	12	 
	 
	 	11.15	 	Arbitration	 	 	12	 
	 
	 	11.16	 	Compliance with Section 409A	 	 	12	 
	 
	 	11.17	 	No Guarantee of Benefits	 	 	12	 
	 
	 	11.18	 	Mergers/Account Transfers	 	 	12	 

ii

 

Preamble

Sunrise Senior Living, Inc. (the “Company”) hereby amends and restates the Executive Deferred
Compensation Plan (the “Plan”), effective January 1, 2009. The Plan was originally effective as of
June 1, 2001, and was established to enable Plan participants to enhance their retirement savings
by permitting them to enter into agreements with the Company to defer compensation and receive
benefits at retirement, death, separation from service, or as otherwise provided under the Plan.

ARTICLE 1 — Definitions

	1.1	 	Annual Deferral. Annual Deferral shall mean the amount of Compensation that the Participant
elects to defer under the Deferral Commitment pursuant to Article 3 of the Plan.
	 
	1.2	 	Beneficiary. Beneficiary shall mean the person or persons or entity designated as such in
accordance with Article 9 of the Plan.
	 
	1.3	 	Code. Code shall mean the Internal Revenue Code of 1986 and any regulations thereunder, as
amended from time to time.
	 
	1.4	 	Committee. Committee shall mean the committee appointed by the Company to administer the
Plan pursuant to Article 8 of the Plan.
	 
	1.5	 	Company. Company shall mean Sunrise Senior Living, Inc. and its successor.
	 
	1.6	 	Compensation. Compensation shall mean a Participant’s base salary and such bonuses (and
other compensation items) as may be designated by the Committee in its sole discretion for the
Deferral Contribution Period (and reflected in the applicable Deferral Election Form), before
reductions for deferrals.
	 
	1.7	 	Crediting Rate. Crediting Rate shall mean those investment alternatives designated by the
Committee from time to time for determining the earnings (or investment gain or loss) to be
credited to a Participant’s Deferral Account. The Committee, in its sole discretion, shall
establish such rules and requirements as it deems necessary or appropriate (in its sole
discretion) for applying, and (if applicable) permitting Participants to make elections as to,
the Crediting Rate.
	 
	1.8	 	Deferral Account. Deferral Account shall mean the bookkeeping account established by the
Company for a Participant for amounts credited on the Participant’s behalf (if any) under
Section 4.1 and Section 5.1.
	 
	1.9	 	Deferral Contribution Period. Deferral Contribution Period shall mean the period of one (1)
Plan Year, or such other period as the Committee may establish in its sole discretion
consistent with Code section 409A, over which the Participant has elected to defer
Compensation pursuant to Article 3 of the Plan.

1

 

	1.10	 	Deferral Commitment or Deferral Unit. Deferral Commitment or Deferral Unit shall mean a
commitment made by a Participant to defer Compensation pursuant to Articles 2 and 3 of the
Plan for which a Deferral Election Form has been timely submitted by the Participant.
	 
	1.11	 	Deferral Election Form. Deferral Election Form shall mean election made in writing or other
form established by the Committee in its sole discretion by which a Participant elects to
participate in the Plan and make a Deferral Commitment.
	 
	1.12	 	Eligible Employee. Eligible Employee shall mean Director level and above of the senior
management of an Employer (or such other or different group of management or highly
compensated employees as may be designated by the Company as eligible to participate in the
Plan). A newly Eligible Employee shall be eligible to participate in the Plan as of the first
day of the month following the completion of one month of employment with the Company (or such
earlier or later date as may be established by the Company in its sole discretion consistent
with Code section 409A).
	 
	1.13	 	Employer. Employer shall mean the Company and any of its affiliates whose employees
participate under the Plan, and their successors.
	 
	1.14	 	Employer Contribution Credit. Employer Contribution Credit shall mean the amount to be
credited to a Participant’s Deferral Account pursuant to Section 5.1.
	 
	1.15	 	ERISA. ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.
	 
	1.16	 	Participant. Participant shall mean (a) an Eligible Employee who is participating in the
Plan as provided in Article 2, (b) a former Eligible Employee for whom a Deferral Account is
being maintained under the Plan or (c) a non-Eligible Employee for whom a Deferral Account has
otherwise been established under the Plan.
	 
	1.17	 	Plan. Plan shall mean the Executive Deferred Compensation Plan, as amended from time to time
(and any successor plan).
	 
	1.18	 	Plan Year. Plan Year shall mean the 12-month period from January 1 through December 31.
	 
	1.19	 	Separation from Service. The termination of an individual’s employment with the Employer and
all affiliates (within the meaning of Treas. Reg. Section 1.409A-1(h)(3)) for any reason other
than death, as determined by the Committee in accordance with Section 1.409A-1(h) and any
other applicable provisions of the regulations. In determining whether a Participant has
experienced a Separation from Service, the following rules shall apply:

	 	(a)	 	A Participant shall be considered to have experienced a Separation from Service
when the facts and circumstances indicate that the Participant and his or her Employer
reasonably anticipate that either (i) no further services will be performed for the
Employer after a certain date, or (ii) that the level of bona fide

2

 

	 	 	 	services the Participant will perform for the Employer after such date (whether as
an Employee or as an independent contractor) will permanently decrease to no more
than 20% of the average level of bona fide services performed by such Participant
(whether as an Employee or an independent contractor) over the immediately preceding
36-month period (or the full period of services to the Employer if the Participant
has been providing services to the Employer less than 36 months).
	 
	 	(b)	 	If a Participant is on military leave, sick leave, or other bona fide leave of
absence, the employment relationship between the Participant and the Employer shall be
treated as continuing intact, provided that the period of such leave does not exceed 6
months (29 months in the case of disability leave within the meaning of Treas. Reg.
Section 1.409A-1(h)(i)), or if longer, for such period as the Participant retains a
right to reemployment with the Employer under an applicable statute or by contract. If
the period of leave exceeds 6 months (29 months in the case of disability leave) and
the Participant does not retain a right to reemployment under an applicable statute or
by contract, the employment relationship shall be considered to be terminated for
purposes of this Plan as of the first day immediately following the end of such 6-month
period (29-month period in the case of disability leave). In applying the provisions
of this paragraph, a leave of absence shall be considered a bona fide leave of absence
only if there is a reasonable expectation that the Participant will return to perform
services for the Employer.

	1.20	 	Specified Employee. An employee of an Employer who is a “specified employee” within the
meaning of Treas. Reg. Section 1.409A-1(h), as determined by the Company or its delegate.
	 
	1.21	 	Unforeseeable Emergency. Unforeseeable Emergency means (i) a severe financial hardship to
the Participant resulting from an illness or accident of the Participant or the Participant’s
spouse, beneficiary or dependent (as defined in Code Section 152(b)(1), (b)(2) and (d)(1)(B);
(ii) loss of the Participant’s property due to casualty (including the need to rebuild a home
following damage to a home not otherwise covered by insurance, for example, not as a result of
a natural disaster); or (iii) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant. The definition of
Unforeseeable Emergency shall be interpreted and applied consistent with Code Section 409A and
the regulations and other guidance issued thereunder.
	 
	1.22	 	Valuation Date. Valuation Date shall mean the last day of each Plan Year calendar quarter,
or such other dates as the Committee may determine in its discretion, which must be at least
annually, for the valuation of a Participant’s Deferral Account.
	 
	1.23	 	Vesting Schedule. Vesting Schedule shall mean the date or dates, as determined by the
Company or Committee at the time Employer Contribution Credits are made to the Plan or
thereafter, on which a Participant’s interest in such credits (as adjusted for the applicable
Crediting Rate) shall vest and not be subject to forfeiture. The Company or the Committee
may, upon such terms and conditions as it may establish in its sole

3

 

	 	 	discretion, count for vesting purposes the prior service of a Participant with an acquired
company or other company with which the Company has engaged in a corporate or other
transaction (and its affiliates).

ARTICLE 2 — Participation

	2.1	 	Deferral Election Form. Any Eligible Employee may elect to participate in the Plan and to
make a Deferral Commitment by submitting a completed Deferral Election Form to the Committee
(by electronic or other means established by the Committee) prior to the beginning of the
Deferral Contribution Period. All elections made in accordance with this Article shall be
irrevocable as of the last date such election may be made (or such earlier date as may be
established by the Committee in its sole discretion).
	 
	2.2	 	Initial Eligibility. Notwithstanding Section 2.1, the Committee may, in its sole discretion,
permit a newly Eligible Employee (to the extent permitted under Code section 409A) to submit
an initial Deferral Election Form within thirty (30) days after the date on which the Employee
first became eligible to participate in the Plan (or at such earlier time as may be
established by the Committee in its sole discretion). The Deferral Commitment shall become
effective as of the first pay period after the date on which the Deferral Election Form is
submitted to the Committee (or other time required to comply with Code Section 409A). Except
as otherwise permitted by the Committee (and set forth in the applicable Deferral Election
Form), such an election shall only apply to the Participant’s base pay for the remainder of
the Deferral Contribution Period.
	 
	2.3	 	Performance-Based Compensation. Notwithstanding Section 2.1, the Committee may, in its sole
discretion, permit an Eligible Employee to submit a separate Deferral Election Form to defer
any bonus which qualifies as performance-based compensation (within the meaning of Treas. Reg.
Section 1.409A-1(e)) no later than 6 months before the end of the performance period (or at
such earlier time as may be established by the Committee in its sole discretion). To be
eligible to make such an election, the Eligible Employee must have continuously performed
services for the Employer from the later of (a) the beginning of the performance period, or
(b) the date upon which the performance criteria for such compensation are established,
through the date upon which the Employee submits the Deferral Election Form for such
compensation. In no event shall a deferral election submitted under this Section 2.3 be
permitted to apply to any amount of performance-based compensation that has become readily
ascertainable.
	 
	2.4	 	Continuation of Participation. A Participant who has elected to participate in the Plan by
making a Deferral Commitment shall continue as a Participant in the Plan for purposes of such
Deferral Commitment even though in any Plan Year after such Deferral Commitment such
Participant ceases to be an Eligible Employee. A Participant shall not be eligible to make a
new Deferral Commitment for a future Plan Year unless the Participant is an Eligible Employee
for that Plan Year.
	 
	2.5	 	Suspension of Deferral Commitment. Notwithstanding Section 2.4,

4

 

	 	(a)	 	the Deferral Commitment of a Participant who is determined by the Committee to
be suffering from a disability (within the meaning of Treas. Reg. Section
1.409A-3(j)(4)(xii)) shall, to the extent provided by the Committee in its sole
discretion consistent with Section 1.409A-3(j)(4)(xii), be cancelled for the remainder
of the Plan Year during which the Participant first suffers the disability; and
	 
	 	(b)	 	the Deferral Commitment of a Participant who has experienced an Unforeseeable
Emergency shall, to the extent provided by the Committee in its sole discretion
consistent with Treas. Reg. Section 1.409A-3(j)(4)(viii), be cancelled for the
remainder of the Plan Year during which the Participant first experienced the
Unforeseeable Emergency.

	 	 	To the extent permitted under Treas. Reg. Section 1.409A-3(j)(4)(viii), a Participant’s
Deferral Commitment may also be cancelled if the Committee determines that such action is
necessary for the Participant to obtain a hardship distribution from a tax qualified plan
pursuant to Treas. Reg. Section 1.401(k)-1(d)(3) and any subsequent Deferral Commitment
made by the Participant shall not become effective prior to six (6) months following the
date of such hardship distribution (or other date established by the Committee in its sole
discretion consistent with Code Section 409A).

ARTICLE 3 — Form of Deferral Commitments

	3.1	 	Minimum Deferral Commitment. Except as otherwise established by the Committee in its sole
discretion, there is no minimum required deferral amount under the Plan.
	 
	3.2	 	Maximum Deferral Commitment. The Committee may, in its sole discretion, establish such
Deferral Commitment limits as it may deem necessary or appropriate in its sole discretion
(consistent with Code section 409A).

ARTICLE 4 —Deferral Accounts

	 
	4.1	 	Deferral Accounts. A Deferral Account shall be established for each Participant. The
Deferral Account shall be credited with the applicable portion of the Annual Deferral on or
about the date such amounts would otherwise have been paid to the Participant (but for the
Participant’s deferral election). A Participant’s Deferral Account shall also be credited
with any account balance transferred from either the Marriott International, Inc. Executive
Deferred Compensation Plan or the Fountains Retirement Communities, Inc. Deferred Compensation
Plan for the Participant as of the date of transfer.
	 
	4.2	 	Investment of Deferral Accounts. The value of a Participant’s Deferral Account shall be
adjusted each Valuation Date to reflect the applicable Crediting Rate since the last Valuation
Date. The value shall also be adjusted for any (i) contribution credits made since the last
Valuation Date and (ii) payments made to the Participant (or his or her Beneficiary) since
that date.
	 
	4.3	 	Statements of Account. The Committee shall provide periodically (but no less frequently than
annually) to each Participant a statement setting forth the balance of the Deferral Account
maintained for such Participant.

5

 

	4.4	 	Vesting of Deferral Accounts. Each Participant shall be one hundred percent (100%) vested at
all times in the amount of Annual Deferrals credited to such Participant’s Deferral Account
(as adjusted for the applicable Crediting Rate). The Participant shall become vested in any
Employer Contributions credited to such Participant’s Deferral Account (as adjusted for the
applicable Crediting Rate) in accordance with the applicable Vesting Schedule (or at such
other time provided by the Company in its sole discretion). In the event the Participant dies
prior to a Separation from Service, the Participant’s Deferral Account shall become one
hundred percent (100%) vested as of the date of his or her death.

ARTICLE 5 — Employer Contributions

	5.1	 	Employer Contribution Credits. Each Employer reserves the right to credit the Deferral
Accounts of such Participants who are Eligible Employees (as the Company may designate its
sole discretion) with additional or matching contribution credits at such times as the Company
may determine in its sole discretion. The amount of the additional contribution credits, if
any, shall be determined by the Company in its sole discretion. The amount of the matching
contribution credits, if any, shall be equal to such percentage or amount of Compensation
deferred by the Participant under the Plan for the applicable period, as determined by the
Company in its sole discretion.
	 
	5.2	 	Vesting. Employer Contribution Credits credited to a Participant’s Deferral Account shall be
distributed to a Participant only to the extent such amounts are vested. A Participant shall
become vested in Company Contributions made on his or her behalf, and all earnings allocable
thereunder, as provided in Section 4.4. Except as otherwise provided by the Company in its
sole discretion, unvested Company Contributions shall be forfeited upon a Participant’s
Separation from Service.

ARTICLE 6 — Payment of Benefits

	6.1	 	Payment of Benefits. Upon Separation from Service, the Employer shall pay to the Participant
a benefit in the form provided in Section 6.2 of the Plan, based on the balance of the
Participant’s Deferral Account. Notwithstanding any other provision of this Plan to the
contrary, distribution of a Participant’s vested Deferral Account shall be made within ninety
(90) days of the Participant’s Separation from Service; provided, that, in the case of any
Participant who had a Separation from Service in 2008, distribution shall be made in January
of 2009. Notwithstanding the foregoing, distribution to a Participant who is a Specified
Employee shall not be made under this Section until expiration of the six-month period
following such Participant’s Separation from Service.
	 
	6.2	 	Form of Benefits. Payment shall be made in the form of a single lump sum equal to the vested
balance of the applicable Deferral Account as of the Valuation Date coinciding with or next
preceding the date payment is to be made.
	 
	6.3	 	In-Service Distributions. A Participant may, to the extent permitted by the Committee in its
sole discretion, elect to receive payment of his or her Annual Deferral and any vested
Employer Contribution Credits for the Deferral Contribution Period (as adjusted

6

 

	 	 	for the applicable Crediting Rate) as of January in any year which is at least four (4)
years after the end of the Deferral Contribution Period for which such election was made (or
other period permitted by the Committee and reflected on the applicable election form).
Except as otherwise provided by the Committee in its sole discretion consistent with Code
section 409A, such election shall be made on the Deferral Election Form for the applicable
Deferral Contribution Period. Notwithstanding the foregoing, should an event occur prior to
the scheduled distribution date for an in-service distribution under this section that would
trigger payment under either Section 6.1 or Section 7.1, any affected amounts shall be paid
in accordance with that Section (and not this Section 6.3).
	 
	6.4	 	Further Deferrals. Notwithstanding the foregoing, a Participant may, to the extent permitted
by the Committee in its sole discretion consistent with Code section 409A, elect to further
defer the date when payment of his or her Deferral Account is to be made, provided that —

	 	(a)	 	the election is made more than one (1) year prior to the date payment is
otherwise scheduled to begin;
	 
	 	(b)	 	the election does not become effective for twelve (12) months;
	 
	 	(c)	 	the date on which payment is to begin is delayed for at least five (5) years;
and
	 
	 	(d)	 	the election meets such other or different requirements as may be determined by
the Committee to be necessary to comply with Section 409A.

	6.5	 	Unforeseeable Emergency Distributions. In the event of an Unforeseeable Emergency, the
Participant may, to the extent permitted by the Committee in its sole discretion, apply for
payment of all or a part of his or her vested Deferral Account as may be necessary to satisfy
the Unforeseeable Emergency. The Administrator shall have the authority, in its sole
discretion, to approve a payment under this Section, subject to the following rules:

	 	(a)	 	The payment shall not exceed the lesser of (i) the vested portion of the
Participant’s Deferral Account, or (ii) the amount necessary to satisfy the
Unforeseeable Emergency, plus amounts reasonably necessary to pay taxes reasonably
anticipated as a result of the distribution. Such payment shall be made in a lump sum
no later than sixty (60) days after the Committee’s decision to approve the payment.
	 
	 	(b)	 	A Participant may not receive a payment hereunder to the extent that the
Unforeseeable Emergency is or may be relieved (i) through reimbursement or compensation
by insurance or otherwise, (ii) by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not itself cause severe financial hardship
or (iii) by suspension of deferrals under this Plan (to the extent permitted under Code
section 409A).

ARTICLE 7 — Survivor Benefits

7

 

	7.1	 	Pre-Retirement Survivor Benefit. Upon a Participant’s death, the Participant’s vested
Deferral Account shall be paid to the Participant’s Beneficiary in a single lump sum. Payment
shall be made within ninety (90) days of the Participant’s date of death. The amount of the
death benefit to be paid hereunder shall be determined as of the Valuation Date coinciding
with or next preceding the date payment is to be made.

ARTICLE 8 -Administration of the Plan

	8.1	 	Administration. The Committee shall have full discretion to administer the Plan and
interpret, construe and apply its provisions and shall have the right to establish such rules
and guidelines for participation under the Plan as it deems necessary or appropriate,
including, but not limited to, the type, manner and level of Deferral Commitments. The
Committee may (a) establish such other rules and regulations as it may deem necessary or
advisable for the administration of the Plan and (b) delegate all or any of its authority
hereunder to individual members of the Committee or officers or other employees of the Company
(or other Employer). All decisions of the Committee shall be final and binding. The
individuals serving on the Committee shall, except as prohibited by law, be indemnified and
held harmless by the Company from any and all liabilities, costs, and expenses (including
legal fees), to the extent not covered by liability insurance, arising out of any action taken
by any member of the Committee with respect to the Plan, unless such liability arises from the
individual’s own gross negligence or willful misconduct.
	 
	8.2	 	Determination of Benefits. The Committee shall make all determinations as to the rights to
benefits under this Plan. Subject to and in compliance with the specific procedures contained
in the applicable regulations under ERISA: (a) Any decision by the Committee denying a claim
by a Participant or his beneficiary for benefits under this Plan shall be stated in writing
and delivered or mailed to the Participant or Beneficiary; (b) each such notice shall set
forth the specific reasons for the denial, written in a manner that is intended to be
understood by the claimant; and (c) the Committee shall afford a reasonable opportunity to the
Participant or Beneficiary for a full and fair review of the decision denying such claim. The
benefit claims procedures then in effect under Section 503 of ERISA, as amended, and any
regulations thereunder, shall be followed by the Committee in making any benefit
determinations under this Plan. All interpretations, determinations and decisions of the
Committee with respect to any claim hereunder shall be made in its sole discretion and shall
be final and conclusive.
	 
	8.3	 	Liability for Benefit Payments. The obligation to pay a Participant’s benefits under the
Plan shall, at all times, be the sole and exclusive liability and responsibility of the
Employer that was responsible for the credits made to his or her Deferral Account but only to
extent of such credits (as adjusted for the applicable Crediting Rate) determined in
accordance with Section 6.2 or 7.1. No other Employer or other person or entity shall be
liable for such payments.
	 
	8.4	 	Expenses. Unless the Company otherwise directs, the expenses of administering the Plan shall
be borne by each Employer on a proportionate basis as determined by the Committee.

8

 

ARTICLE 9 —Beneficiary Designation

	9.1	 	Beneficiary Designation. The Participant shall have the right at any time to designate any
person or persons as a Beneficiary (both primary and contingent) to whom payment under the
Plan shall be made in the event of the Participant’s death. The Beneficiary designation shall
be effective when it is submitted in writing (or by such other means established by the
Committee) to the Company during the Participant’s lifetime on a form prescribed by the
Committee. Except as otherwise provided by the Committee, if the Participant is married, his
or her spouse shall be required to consent to any such designation naming a Beneficiary other
than the spouse.
	 
	9.2	 	New Beneficiary Designation. The Participant shall have the right to change or revoke any
such designation from time to time by filing a new designation or notice of revocation with
the Company, and no notice to any Beneficiary nor consent by any Beneficiary shall be required
to effect any such change or revocation. Except as otherwise provided by the Committee, if
the Participant is married, his spouse shall be required to consent to any such change or
revocation which results in the naming of a Beneficiary other than the spouse.
	 
	9.3	 	Failure to Designate Beneficiary. If a Participant fails to designate a Beneficiary before
his or her death, or if no designated Beneficiary survives the Participant (or, in the case of
a trust or other entity which is a designated Beneficiary, is in existence at the
Participant’s death), the Participant’s vested Deferral Account shall be paid to the
Participant’s surviving spouse or, if there is no surviving spouse on the date of his death,
to his or her estate. Any payment hereunder shall fully discharge the Employer of all
liability under the Plan with respect to the benefits of such deceased Participant.
	 
	9.4	 	Proper Beneficiary. If there is a dispute as to the proper beneficiary to receive payment
hereunder, the Employer shall, to the extent consistent with Code section 409A and any
regulations thereunder, have the right to withhold such payment until the matter is finally
resolved or adjudicated; provided, that any payment made in good faith by the Employer shall
fully discharge the Employer, Company and Committee from all further obligations with respect
to that payment.

ARTICLE 10 — Amendment and Termination of the Plan

	10.1	 	Amendment of the Plan. The Company may at any time amend the Plan in whole or in part,
provided however, that such amendment shall not (a) decrease the vested balance of a
Participant’s Deferral Account at the time of such amendment or (b) retroactively decrease the
applicable Crediting Rates prior to the time of such amendment.
	 
	10.2	 	Termination of the Plan. The Company may at any time terminate the Plan as to all or any
group of Participants. If the Company terminates the Plan, payment of the Deferral Accounts
shall not be accelerated, but shall be made at such time as such Accounts would have otherwise
been payable hereunder.

9

 

ARTICLE 11 — General Provisions

	11.1	 	Nonassignability. The benefits provided under the Plan may not be alienated, assigned,
transferred, pledged or hypothecated by or to any person or entity, at any time or in any
manner whatsoever. These benefits shall be exempt from the claims of creditors or other
claimants of any Participant and from all orders, decrees, levies, garnishment or executions
against any Participant to the fullest extent allowed by law. Notwithstanding the foregoing,
the Participant’s Deferral Account may, to the extent permitted under Code section 409A, be
offset by any liability of the Participant to the Employer or any affiliate. An amount will
be subject to offset hereunder if owed or otherwise payable by the Participant at any time and
for any reason, including, but not limited to, a loan to the Participant, recovery of amounts
due to misconduct of the Participant, or any other liability or obligation of the Participant
of any type, as determined by the Committee.
	 
	11.2	 	Participant’s Rights Unsecured. The Plan is intended to be unfunded for purposes of both the
Code and ERISA. The right of a Participant or his or her Beneficiary to receive payment of
the Participant’s Deferral Account hereunder shall be a general unsecured claim against the
Employer’s general assets, and neither the Participant nor his or her beneficiary shall have
any rights in or against any amount credited to any investment account, trust or any other
specific assets of the Employer. To the extent that any person acquires a right to receive
payments from an Employer under the Plan, such right shall be no greater than the right of any
general unsecured creditor of the Employer.
	 
	11.3	 	Protective Provisions. A Participant shall cooperate with the Employer and Committee by
furnishing any and all information requested by the Employer or Committee in order to
facilitate the payment of benefits hereunder, and by taking such physical examinations as the
Employer or Committee may deem necessary and taking such other action as may be requested by
the Employer or Committee. If the Participant refuses to cooperate or makes any material
misstatement or nondisclosure of information, the portion of the Participant’s Deferral
Account attributable to Employer Contributions (as adjusted for the applicable Crediting Rate)
shall, to the extent provided by the Company, be forfeited.
	 
	11.4	 	Tax Liability. Any required federal, state or local tax withholding may be withheld from any
payment made pursuant to this Plan or from any other compensation payable to the Participant.
Notwithstanding the foregoing, a Participant may, to the extent permitted by the Committee
consistent with Code section 409A, elect to pay any required employment taxes (and any
resulting income taxes) that arise as of the date of deferral (or, if later, vesting)
hereunder either (a) by direct payment or (b) through the withholding of such amounts from
other compensation due the Participant. In the alternative, the Administrator may, in its
sole discretion, offset such taxes against the Participant’s vested Accounts to the extent
permitted under Treas. Reg. Section 1.409A-3(j)(4) or other applicable regulations.
	 
	11.5	 	Successors of the Company. The rights and obligations of the Company and other Employer
under the Plan shall inure to the benefit of, and shall be binding upon, the successors and
assigns of the Company or other Employer.

10

 

	11.6	 	ERISA Plan. The Plan is intended to be an unfunded plan maintained primarily to provide
deferred compensation benefits for “a select group of management or highly compensated
employees” within the meaning of Sections 201, 301, and 401 of ERISA and therefore to be
exempt from Parts 2, 3, and 4 of Title I of ERISA. Notwithstanding any provisions of this
Plan to the contrary, if any Participant is determined not to be a “management or highly
compensated employee” within the meaning of ERISA or applicable regulations thereunder at the
time a Deferral Commitment is elected, such Participant will not be eligible to complete such
Deferral Commitment. Notwithstanding the foregoing, any amounts standing to the credit of
such Participant’s Deferral Account shall be paid in accordance with the terms of the Plan,
except that any amounts credited to such Participant’s Deferral Account in error due to such
Participant’s ineligibility for participation in the Plan, may (to the extent permitted under
Code section 409A or any applicable guidance thereunder) be returned to the Participant by the
end of the applicable Deferral Contribution Period.
	 
	11.7	 	Domestic Relations Orders. If a Participant’s spouse or former spouse has been determined
under a final domestic relations order to have an interest in the Participant’s vested
Deferral Account, the Committee (or its delegate) may, in its sole discretion consistent with
Code Section 409A, distribute the spouse’s or former spouse’s interest to that spouse or
former spouse in accordance with such order.
	 
	11.8	 	Employment Not Guaranteed. Nothing contained in the Plan nor any action taken hereunder
shall be construed as a contract of employment or as giving any Participant any right to
continued employment with the Company.
	 
	11.9	 	Construction. Titles of articles and sections herein are for convenience of reference only
and are not to be taken into account in interpreting the Plan. The masculine whenever used
herein shall include the feminine. The singular shall include the plural and the plural shall
include the singular whenever used herein unless the context requires otherwise.
	 
	11.10	 	Severability. If any provision of the Plan shall be held invalid or unlawful for any
reason, such event shall not affect or render invalid or unenforceable the remaining
provisions of the Plan.
	 
	11.11	 	Incapacity of Recipient. If the Committee determines that any person to whom any benefits
are payable hereunder is (a) unable to care for his or her affairs because of illness or
accident or (b) a minor, any payment due under the Plan may be paid to the duly appointed
guardian or conservator of such person or to any third party who is eligible to receive
payment from the Plan for the account of such person. Any such payment shall be a complete
discharge of the Employer’s liabilities hereunder.
	 
	11.12	 	Applicable Law. The Plan shall be governed and construed in accordance with the laws of the
Commonwealth of Virginia except where the laws of such state are preempted by ERISA.

11

 

	11.13	 	Payment Upon Income Inclusion. If any portion of a Participant’s Deferral Account is
required to be included in income by the Participant prior to receipt due to a failure of this
Plan to comply with the requirements of Code section 409A, the Committee may, to the extent
permitted under Treas. Reg. §1.409A-3(j)(vii), determine that such Participant shall receive a
distribution from the Plan in an amount equal to the lesser of (a) the portion of his or her
Deferral Account required to be included in income as a result of the failure of the Plan to
comply with the requirements of Code section 409A, or (b) the vested portion of his or her
Deferral Account.
	 
	11.14	 	Notice. Any notice, consent, election, claim or demand required or permitted to be given
under the provisions of this Plan shall be in writing, and shall be signed by the party giving
or making the same. If such notice, consent, election, claim or demand is to be mailed, it
shall be sent by United States certified mail, postage prepaid, addressed to the addressee’s
last known address. The date of such mailing shall be deemed the date of notice, consent,
election, claim or demand.
	 
	11.15	 	Arbitration. Any claim, dispute or other matter in question of any kind relating to this
Plan shall be settled by arbitration in accordance with the Rules of the American Arbitration
Association. Notice of demand for arbitration shall be made in writing to the opposing party
and to the American Arbitration Association within a reasonable time after the claim, dispute
or other matter in question has arisen. In no event shall a demand for arbitration be made
after the date when the applicable statute of limitations would bar the institution of a legal
or equitable proceeding based on such claim, dispute or other matter in question. The
decision of the arbitrators shall be final and may be enforced in any court of competent
jurisdiction.
	 
	11.16	 	Compliance with Section 409A. This Plan is intended to comply with the distribution and
other applicable requirements of Code section 409A and the Plan shall be interpreted and
applied to comply with section 409A.
	 
	11.17	 	No Guarantee of Benefits. Nothing in this Plan shall constitute a guarantee by Employer,
Company, Committee or any other person or entity that the Employer’s assets will be sufficient
to pay any benefits hereunder.
	 
	11.18	 	Mergers/Account Transfers. Upon the merger of, or the transfer of accounts from, another
plan, the rights of such Participants to their prior plan accounts shall (except as otherwise
required to comply with Code section 409A) be determined solely under the terms of this Plan
and they shall have no further right, title or interest under the prior plan. By
participating in, and accepting any benefits under, this Plan, any Participant to whom this
Section 11.17 applies hereby waives any rights and claims that the Participant may have had at
any time under the prior plan. This waiver shall be binding on all such Participants and
their beneficiaries.

12

 

     IN WITNESS WHEREOF, Sunrise Senior Living, Inc. has caused this document to be executed by its
duly authorized officer, this 19th day of December, 2008.

	 	 	 	 	 
	 	Sunrise Senior Living, Inc.

 	 
	 	By:  	/s/ Mark S. Ordan
 	 
	 	 	Title:      Chief Executive Officer 	 
	 	 	 	 
	 

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