Amended and Restated
Employment Agreement
This Amended and
Restated Employment Agreement (the “ Agreement
”) dated as of December 23, 2008 (the “ Effective
Date ”), is made by and between United Components, Inc.
(together with any successor thereto, the “ Company
”) and Bruce Zorich (the “ Executive
”).
|
A.
|
|
The
Executive and United Aftermarket, Inc., a predecessor to the
Company, previously entered into that certain Employment Agreement,
dated April 18, 2003 (the “Old
Agreement”).
|
|
|
|
|
|
B.
|
|
The
Executive and Company desire to amend certain terms of the Old
Agreement by entering into this Agreement.
|
|
|
|
|
|
C.
|
|
The
Executive desires to provide services to the Company on the terms
herein provided.
|
NOW, THEREFORE, in
consideration of the foregoing and of the respective covenants and
agreements set forth below the parties hereto agree as
follows:
|
|
(a)
|
|
“ 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)
|
|
“ Annual Base Salary
” shall have the meaning set forth in
Section 3(a) .
|
|
|
|
|
|
|
|
(c)
|
|
“ Board ” shall
mean the Board of Directors of the Company or Parent.
|
|
|
|
|
|
|
|
(d)
|
|
The
Company shall have “ Cause ” to terminate the
Executive’s employment hereunder upon:
|
|
|
(i)
|
|
the
Executive’s failure to use his reasonable best efforts to
follow a legal written order of the Board, 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
|
|
|
|
|
|
|
|
(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.
|
|
|
(e)
|
|
“ 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 share 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.
|
|
|
|
|
|
|
|
(f)
|
|
“ Company ” shall
have the meaning set forth in the preamble hereto.
|
|
|
|
|
|
|
|
(g)
|
|
“ Compensation
Committee ” means the Compensation Committee of the
Board.
|
|
|
|
|
|
|
|
(h)
|
|
“ Date of Termination
” shall mean (i) if the Executive’s employment is
terminated by his death, the date of his death; (ii) if the
Executive’s employment is terminated pursuant to
Section 4(a)(ii) – (vi) either the date indicated
in the Notice of Termination or the date specified by the Company
pursuant to Section 4(b) , whichever is earlier;
(iii) if the Executive’s employment is terminated
pursuant to Section 4(a)(vii) or
Section 4(a)(viii) , the expiration of the
then-applicable Term.
|
|
|
|
|
|
|
|
(i)
|
|
“ Disability ”
shall mean the absence of the Executive from the Executive’s
duties to the Company on a full-time basis for a total of six
months during any 12-month period as a result of incapacity due to
mental or physical illness which is determined to be reasonably
likely to extend beyond the completion of the Term and which
determination is made by a physician selected by the Company and
acceptable to the Executive or the Executive’s legal
representative (such agreement as to acceptability not to be
withheld unreasonably). A Disability shall not be
“incurred” hereunder until, at the earliest, the last
day of the sixth month of such absence.
|
2
|
|
(j)
|
|
“ Exchange Act ”
shall mean the Securities and Exchange Act of 1934, as
amended.
|
|
|
|
|
|
|
|
(k)
|
|
“ Executive ”
shall have the meaning set forth in the preamble hereto.
|
|
|
|
|
|
|
|
(l)
|
|
“ Executive Bonus Plan
” shall have the meaning set forth in
Section 3(b) .
|
|
|
|
|
|
|
|
(m)
|
|
“ First Payment Date
” shall have the meaning set forth in Section 5(g)
.
|
|
|
|
|
|
|
|
(n)
|
|
(i) The Executive shall have
“ Good Reason ” to resign his employment upon
the occurrence of any of the following:
|
(A) failure of the
Company to continue the Executive in the position of Chief
Executive Officer;
(B) a material
diminution in the nature of scope of the Executive’s
responsibilities, duties or authority;
(C) failure of the
Principal Shareholders to satisfy their requirements under
Section 2(c)(ii) of the Agreement
(D) failure of the
Company to make any payment or provide any benefit under this
Agreement;
(E) the
Company’s material breach of this Agreement; or
(F) failure of any
successor to the Company to assume the obligations of the Company
hereunder.
|
|
(ii)
|
|
The
Executive may not resign his employment for Good Reason
unless:
|
(A) the Executive
provided the Company with at least 30 days prior written
notice of his intent to resign for Good Reason; and
(B) the Company
has not remedied the alleged violation(s) within the 30-day
period.
|
|
(o)
|
|
“ Inventions ”
shall have the meaning set forth in Section 8
.
|
|
|
|
|
|
|
|
(p)
|
|
“ Notice of Termination
” shall have the meaning set forth in
Section 4(b) .
|
|
|
|
|
|
|
|
(q)
|
|
“ Parent ” shall
mean UCI Holdco, Inc.
|
|
|
|
|
|
|
|
(r)
|
|
“ 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.
|
|
|
|
|
|
|
|
(s)
|
|
“ Principal
Stockholders ” shall mean Carlyle Partners III, L.P., a
Delaware limited partnership, or any of its Affiliates.
|
3
|
|
(t)
|
|
“ Securities Act
” shall mean the Securities Act of 1933, as
amended.
|
|
|
|
|
|
|
|
(u)
|
|
“ Term ” shall
have the meaning set forth in Section 2(b) .
|
|
|
|
|
|
|
|
(v)
|
|
“ Termination of
Employment ” shall mean the time when the engagement of
the Executive as an employee of the Company terminates, 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).
|
|
|
(a)
|
|
The
Company shall employ the Executive and the Executive shall enter
the employ of the Company, for the period set forth in
Section 2(b) , in the position set forth in
Section 2(c) , and upon the other terms and conditions
herein provided.
|
|
|
|
|
|
|
|
(b)
|
|
The
initial term of employment under this Agreement (the “
Initial Term ”) shall be for the period beginning on
the Effective Date of this Agreement and ending on the first
anniversary thereof, unless earlier terminated as provided in
Section 4 . The employment term hereunder shall
automatically be extended for successive one-year periods (“
Extension Terms ” and, collectively with the Initial
Term, the “ Term ”) unless either party gives
notice of non-extension to the other no later than 90 days
prior to the expiration of the then-applicable Term.
|
|
|
|
|
|
|
|
(c)
|
|
Position and Duties
.
|
|
|
(i)
|
|
The
Executive shall serve as Chief Executive Officer of the Company and
shall have the authorities duties and responsibilities customarily
commensurate with such position and such additional customary
responsibilities, duties and authority as may from time to time be
reasonably assigned to the Executive by the Board. The Executive
shall report to the Board. The Executive shall devote substantially
all his working time and efforts to the business and affairs of the
Company. The Executive agrees to observe and comply with the
Company’s rules and policies as adopted by the Company from
time to time. During the Term, it shall not be a violation of this
Agreement for the Executive to (i) serve on industry trade,
civic or charitable boards or committees; (ii) deliver
lectures or fulfill speaking engagements; or (iii) manage
personal investments, as long as such activities do not materially
interfere with the performance of the Executive’s duties and
responsibilities. The Executive shall be permitted to serve on
for-profit corporate boards of directors and advisory committees if
approved in advance by the Board.
|
|
|
|
|
|
|
|
(ii)
|
|
The
Principal Stockholders shall cause the Executive to be appointed or
elected to the Board. During the Term, the Board shall propose the
Executive for re-election to the Board and the Principal
Stockholders shall vote all of their shares of Common Stock in
favor of such re-election.
|
4
3.
Compensation and Related Matters.
|
|
(a)
|
|
Annual Base Salary
. During the Term, the
Executive shall receive a base salary at a rate of $465,000 per
annum, which shall be paid in accordance with the customary payroll
practices of the Company, subject to any increase as determined by
the Compensation Committee in its sole discretion (the “
Annual Base Salary ”). Annual Base Salary may be
increased, but not decreased, from time to time by the
Board.
|
|
|
|
|
|
|
|
(b)
|
|
Annual Bonus . During the Term, the Executive
will participate in an annual performance-based bonus plan (“
Executive Bonus Plan ”) established by the
Compensation Committee at a target level of 80% of his Annual Base
Salary (“ Target Level ”), and a maximum of 150%
of Annual Base Salary. Such bonus shall be payable at such time as
bonuses are paid to other senior executive officers who participate
therein, provided however, that such bonus shall be paid in the
Executive’s taxable year following the Company’s fiscal
year to which such bonus applies. Notwithstanding the foregoing,
with respect to each of the Company’s fiscal years that ends
during the Term, the amount of the Executive’s annual bonus
payable pursuant to such plan shall be determined as set forth on
Exhibit A .
|
|
|
|
|
|
|
|
(c)
|
|
Equity Participation
. During the Term, the
Executive shall be entitled to participate in the Amended and
Restated Equity Incentive Plan of Parent (the “Plan”),
and shall be granted such awards under the Plan as determined in
the discretion of the Board.
|
|
|
|
|
|
|
|
(d)
|
|
Benefits . The Executive shall be entitled to
participate in employee benefit plans, programs and arrangements of
the Company which are applicable to the senior officers of the
Company at a level commensurate with the Executive’s
position.
|
|
|
|
|
|
|
|
(e)
|
|
Relocation Expenses
. If the Company
requires the Executive to relocate his place of residence outside
of the Greater Atlanta area during the Term, the Company shall
reimburse Executive for any of the following expenses to the full
extent reasonable: (i) real estate broker commissions and
attorney fees associated with the sale of his former residence and
purchase of a new residence, (ii) moving expenses (as defined
in Section 217(b) of the Internal Revenue Code (the “
Code ”)), and (iii) to the extent approved by the
Board, necessary temporary lodging for the Executive and his
family, provided that the Executive shall properly account for such
expenses in accordance with the Company’s policies and
procedures.
|
5
The
Executive’s employment hereunder may be terminated by the
Company or the Executive, as applicable, without any breach of this
Agreement only under the following circumstances:
|
|
(i)
|
|
Death . The Executive’s employment
hereunder shall terminate upon his death.
|
|
|
|
|
|
|
|
(ii)
|
|
Disability . If the Executive has incurred a
Disability, the Company may give the Executive written notice of
its intention to terminate the Executive’s employment. In
that event, the Executive’s employment with the Company shall
terminate effective on the 30 th day after receipt of such notice by
the Executive, provided that within the 30 days after such receipt,
the Executive shall not have returned to full-time performance of
his duties.
|
|
|
|
|
|
|
|
(iii)
|
|
Termination for Cause
. The Company may
terminate the Executive’s employment for Cause.
|
|
|
|
|
|
|
|
(iv)
|
|
Termination without Cause
. The Company may
terminate the Executive’s employment without
Cause.
|
|
|
|
|
|
|
|
(v)
|
|
Resignation for Good
Reason . The
Executive may resign his employment for Good Reason.
|
|
|
|
|
|
|
|
(vi)
|
|
Resignation without Good
Reason . The
Executive may resign his employment without Good Reason.
|
|
|
|
|
|
|
|
(vii)
|
|
Non-extension of Term by the
Company . The
Company may give notice of non-extension to the Executive pursuant
to Section 2(b).
|
|
|
|
|
|
|
|
(viii)
|
|
Non-extension of Term by the
Executive. The Executive may give notice of
non-extension to the Company pursuant to
Section 2(b).
|
|
|
(b)
|
|
Notice of Termination
. Any termination of the
Executive’s employment by the Company or by the Executive
under this Section 4 (other than termination pursuant
to paragraph (a)(i)) shall be communicated by a written notice to
the other party hereto indicating the specific termination
provision in this Agreement relied upon, setting forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the
provision so indicated, and specifying a Date of Termination which,
if submitted by the Executive, shall be at least 30 days
following the date of such notice (a “ Notice of
Termination ”) provided, however, that the Company may,
in its sole discretion, change the Date of Termination to any date
following the Company’s receipt of the Notice of Termination.
A Notice of Termination submitted by the Company may provide for a
Date of Termination on the date the Executive receives the Notice
of Termination, or any date thereafter elected by the Company in
its sole discretion. The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Cause or Good Reason shall not
waive any right of the Executive or the Company hereunder or
preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive’s or the
Company’s rights hereunder.
|
6
|
|
(c)
|
|
Company obligations upon Termination
of Employment . Upon a Termination of Employment,
the Executive (or the Executive’s estate) shall be entitled
to receive a lump sum equal to the Executive’s Annual Base
Salary through the Date of Termination not theretofore paid, any
bonus if declared or earned but not yet paid for a completed fiscal
year, any expenses owed to the Executive, any accrued vacation pay
owed to the Executive, and any amount arising from the
Executive’s participation in, or benefits under any employee
benefit plans, programs or arrangements, which amounts shall be
payable in accordance with the terms and conditions of such
employee benefit plans, programs or arrangements.
|
The Executive
shall be entitled to severance payments and benefits (collectively,
the “Severance”) upon the terms set forth in this
Section 5. Notwithstanding any other provision of the
Agreement, the Executive’s right to Severance shall be
subject to the Executive signing and not revoking the Release as
set forth in Section 5(f) and subject to the continued
compliance of the Executive with Sections 6, 7, 8 and 9 of
this Agreement
|
|
(a)
|
|
Termination for Cause, Resignation
without Good Reason or upon Non-extension by the
Executive .
If the Executive experiences a Termination of Employment pursuant
to Sections 4(a)(iii) for Cause, Section 4(a)(vi)
without Good Reason, or pursuant to Sections 4(a)(viii)
due to Non-extension of the Agreement by the Executive, the
Executive shall not be entitled to any Severance (other than as
expressly provided for herein or under any benefit
plan).
|
|
|
|
|
|
|
|
(b)
|
|
Termination of Employment upon death
or Disability . If the Executive experiences a
Termination of Employment pursuant to Section 4(a)(i)
due to the Executive’s death, or pursuant to
Section 4(a)(ii) due to the Executive’s
Disability, the Company shall pay to the Executive (or the
Executive’s estate):
|
|
|
(i)
|
|
an
amount equal to the Annual Base Salary that the Executive would
have been entitled to receive if the Executive’s employment
had continued for a perio
|
|