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Amended and Restated Employment Agreement

Employee Retention Agreement

Amended and Restated Employment Agreement | Document Parties: UCI HOLDCO, INC. | United Aftermarket, Inc | United Components, Inc You are currently viewing:
This Employee Retention Agreement involves

UCI HOLDCO, INC. | United Aftermarket, Inc | United Components, Inc

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Title: Amended and Restated Employment Agreement
Governing Law: New York     Date: 3/31/2009
Law Firm: Latham Watkins    

Amended and Restated Employment Agreement, Parties: uci holdco  inc. , united aftermarket  inc , united components  inc
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Exhibit 10.14

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 ”).

RECITALS

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.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below the parties hereto agree as follows:

1. Certain Definitions.

 

(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).

2. Employment.

 

(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


 

4. Termination.

     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:

 

(a)

 

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.

5. Severance Payments.

     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


 
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