This Executive Employment Agreement (this
"Agreement") is entered into as of January 1, 2009 by and
between Donald T. Johnson Jr., a natural person ("Executive"), and
ATC Technology Corporation, a Delaware corporation
(“ATC”). As used herein, the
“Company” refers to ATC and/or any subsidiary of
ATC. The parties hereto agree as follows:
(a)
Best Efforts . Subject to the terms set forth
herein, the Company agrees to employ Executive as Chairman of ATC
and Executive hereby accepts such employment. While
employed by the Company, Executive will devote his best efforts and
such time as is necessary to the performance of his duties
hereunder and to the business and affairs of ATC and its
subsidiaries and will not be employed by any other employer (other
than an employer owned at least 50.1% by Executive), although
Executive may serve on other boards of directors so long as such
service does not create a conflict of interest with the
Company.
(b)
Duties . Executive shall perform such duties for
the Company as are customarily associated with the position of
Chairman, consistent with the Bylaws of the Company and as required
by the Board of Directors of ATC.
(c)
Company Policies . The employment relationship
between the parties shall be governed by the general employment
policies and practices of the Company, except that when the terms
of this Agreement differ from or are in conflict with such
employment policies and practices, this Agreement shall
control.
2.
Compensation and Benefits.
(a)
Salary . Executive shall receive for services to
be rendered hereunder a base salary of $236,274 payable on the
Company’s regular payroll dates, subject to standard
withholdings for taxes and social security and the like.
(b)
Incentive Plans . Executive shall not participate
in any of the Company’s incentive plans, provided that
nothing in this Agreement shall affect Executive’s previously
established participation in the 2008 Incentive Compensation Plan
or the cash award component of the 2008-2010 Long-Term Incentive
Plan.
(c)
Participation in Benefit Plans . While employed
by the Company, Executive shall be entitled to participate in any
group medical, dental, health and accident, disability insurance,
life insurance (at a minimum of $1.5 million in Company-paid
coverage), retirement income, deferred compensation or similar plan
or program of the Company to the extent that he is eligible under
the general provisions thereof. The Company may, in its
discretion and from time to time, establish additional management
benefit programs as it deems appropriate. Executive
understands that any such plans may be modified or eliminated in
the Company's discretion in accordance with applicable
law.
(a)
Financial Planning/Club Dues Allowance
. Executive shall be entitled to a financial
planning/club dues allowance of $8,438, subject to applicable
withholding.
(b)
Automobile . Executive shall be entitled to an
automobile allowance of $10,126, subject to applicable
withholding.
4.
Business Expenses . Executive shall be
reimbursed for documented and reasonable business travel expenses
in connection with the performance of his duties
hereunder.
5.
Termination of Employment . The date on
which Executive's employment by the Company ceases, under any of
the circumstances provided in Section 5(a)-(g), shall be
defined herein as the "Termination Date." All
capitalized terms used in this Section 5 without definition will
have the meanings set forth in Section 5(l).
(a)
End of Employment Term . Unless terminated
earlier pursuant to Section 5(b)-(g), Executive’s
employment will terminate on June 3, 2009. Within
ten business days after the Termination Date, Executive shall
receive payment for all accrued salary through the Termination Date
and the Earned Benefits. Executive shall also receive
the LTIP Payment. Except as provided above, no
compensation of any kind or severance payment will be payable under
this Agreement due to a termination pursuant to this
Section 5(a), except that if a Change in Control occurs prior
to Executive’s termination pursuant to this
Section 5(a), such termination shall be treated as a Company
termination without Cause and Executive shall be entitled to the
payments and benefits provided in Section 5(f).
(b)
Termination for Cause . The Company may terminate
Executive's employment at any time for Cause immediately upon
written notice to Executive of the circumstances leading to such
termination for Cause. If Executive's employment is
terminated for Cause, Executive shall receive payment for all
accrued salary through the Termination Date (which in this event
shall be the date upon which notice of termination is given) and
the Earned Benefits. The Company shall have no
obligation to pay severance of any kind nor to make any payment in
lieu of notice if Executive is terminated for Cause.
(c)
Voluntary Termination . Executive may voluntarily
terminate his employment with the Company at any time upon 90
days’ prior written notice. Within ten business
days after the Termination Date, Executive shall receive payment
for all accrued salary through the Termination Date and the Earned
Benefits, after which no further compensation of any kind or
severance payment will be payable under this
Agreement. If the Board determines that Executive has
provided all services and cooperation required by the Board to
transition Executive’s position to a successor (regardless of
whether an orderly transition has actually occurred), Executive
shall also receive the LTIP Payment.
(d)
Termination Upon Death . Executive’s
employment will terminate upon his death. Within ten
business days after the Termination Date, Executive’s
Beneficiary shall receive payment for all accrued salary through
the Termination Date and the Earned
Benefits. Executive’s Beneficiary shall also
receive the LTIP Payment. Except as provided above, no
compensation of any kind or severance payment will be payable under
this Agreement due to a termination pursuant to this
Section 5(d).
(e)
Termination Upon Disability . The Company may
terminate Executive's employment in the event Executive suffers a
disability that renders Executive unable to perform the essential
functions of his position, even with reasonable accommodation in
compliance with the Americans with Disabilities Act, for three
consecutive months. A termination in such circumstances
shall be treated as a Company termination without Cause and
Executive shall be entitled to the payments and benefits provided
in Section 5(f) and Section 5(i)(i). The
foregoing shall not affect any rights that Executive may have under
applicable workers’ compensation laws or any disability plan
of the Company.
(f)
Termination Without Cause . The Company may
terminate Executive's employment without Cause at any time upon 30
days’ prior written notice. Within ten business
days after the Termination Date, Executive shall receive payment
for all accrued salary through the Termination Date and the Earned
Benefits. Executive shall also receive the LTIP
Payment. In addition, the Company shall pay Executive as
severance $1,120,000 (i.e., 200% of Executive’s annualized
base salary). Subject to Section 11, the severance
shall be paid in equal installments on each of the Company’s
regular payroll dates during the two-year period following the
Termination Date, unless the Termination Date occurs after a Change
in Control, in which case the severance will be paid in a single
lump sum within ten business days after the Termination
Date. The Company will pay up to $25,000
of the cost of an executive level individualized career transition
program through a professional outplacement firm mutually selected
by the Company and the Executive if such program is initiated
within 30 days after the Termination Date. If Executive
dies after the Termination Date, the payment or payments due
thereafter under this Section 5(f) shall be made to
Executive’s Beneficiary but the career transition benefits
shall terminate as of the date of death. As a condition
to receiving the payments and benefits provided by this
Section 5(f) (other than payment for all accrued salary
through the Termination Date and the Earned Benefits, which shall
be payable in any case), Executive shall execute and deliver to the
Company on the Termination Date a general release in the form
attached hereto as Exhibit A.
(g)
Fundamental Changes . If the Company
(i) materially diminishes Executive's duties, authority,
responsibility or compensation without performance justification,
or (ii) breaches this Agreement in any material respect,
Executive may terminate his employment, provided that Executive has
given the Company 30 days’ written notice prior to such
termination and the Company has not cured such diminution or
breach, as the case may be, by the end of such 30-day
period. A termination in such circumstances shall be
treated as a Company termination without Cause and Executive shall
be entitled to the payments and benefits provided in
Section 5(f) and Section 5(i)(i).
(h)
Medical Coverage . Except in the case of
Executive’s death or termination for Cause, until the fifth
anniversary of the Termination Date (such five-year period being
the “Coverage Period”) the Company will provide
continued medical-related insurance coverage to Executive and his
spouse at the levels and at the rates applicable from time to time
to comparable active employees and spouses of the
Company. Medical-related insurance coverage includes
health, dental, vision and/or cancer. COBRA continuation
coverage eligibility
shall commence
as of the day following the end of the Coverage
Period. Notwithstanding the above, coverage under each
of these plans shall cease on the date (i) Executive (or his
spouse in the event Executive dies during the Coverage Period)
fails to pay timely the premium required by such plan,
(ii) Executive (or his spouse in the event Executive dies
during the Coverage Period) becomes eligible for coverage under
Medicare or the group health plan of any other employer, or
(iii) the Company terminates such plan as to all its
employees, provided, however, that if the Company terminates such
plan, the Company shall make a lump sum payment to Executive (or to
his spouse in the event Executive dies during the Coverage Period)
equal to (x) the Company’s contribution to such plan
with respect to Executive and his spouse (or just his spouse if
Executive is then no longer alive) for the last full month during
which coverage was provided under such plan multiplied by
(y) the number of months remaining in the Coverage
Period.
(i)
Vesting of Restricted Stock and Stock Options
. All of Executive’s restricted stock and unvested
stock options that are outstanding as of the Termination Date will
be treated as follows following the Termination Date:
(i) In the case of
termination pursuant to Section 5(a) or Company termination
without Cause, such restricted stock and unvested options will
continue to vest after the Termination Date according to their
vesting schedules notwithstanding the fact that Executive has
ceased to be an employee of the Company.
(ii) In the case of
Executive’s death, such restricted stock and unvested options
shall fully vest as of the Termination Date.
(iii) In the case
of voluntary resignation, such restricted stock and unvested
options will terminate on the Termination Date unless the Board
determines that Executive has provided prior to the termination of
Executive’s employment all services and cooperation required
by the Board to transition Executive’s position to a
successor (regardless of whether an orderly transition has actually
occurred), in which case such restricted stock and unvested options
will continue to vest after the Termination Date according to their
vesting schedules notwithstanding the fact that Executive has
ceased to be an employee of the Company.
(iv) In the case of
termination for Cause, restricted stock and unvested options will
terminate on the Termination Date.
(v) Except in
the case of termination for Cause, options that are vested as of
the Termination Date or subsequently vest pursuant to this
Section 5(i) shall remain in effect and be exercisable until
the tenth anniversary of the date of grant.
(j)
No Other Payments or Benefits . Except as
otherwise expressly provided in this Agreement, (i) after the
Termination Date Executive will not be entitled to any payments
from the Company and (ii) on the Termination Date
Executive’s participation in and coverage under the
Company’s benefit programs (including the ATC Retirement
Savings Plan ( i.e. , the 401(k) plan) and the
Company’s group life and disability insurance plans) shall
cease; provided that Executive shall retain any right to convert to
individual coverage as permitted under these insurance plans and to
any vested benefits under the 401(k) plan and the Company’s
stock option plans.
(k)
Withholding . Any amounts payable under this
Section 5 shall be subject to standard withholdings for taxes and
social security and the like.
(i)
“Beneficiary” means a person, trust or other
entity (or any combination thereof) designated from time to time by
Executive in writing to receive compensation payable hereunder
following Executive’s death. In the event
Executive does not designate a Beneficiary or there is no surviving
Beneficiary, then Executive’s estate will be the
Beneficiary.
(ii) "
Cause " means the occurrence or existence of any of the
following with respect to Executive, as determined by the Company
in its sole discretion:
(A) a material breach by
Executive of (x) his duty not to engage in any transaction
that represents, directly or indirectly, self-dealing with the
Company or any of its affiliates that has not been approved by the
Company, or (y) the terms of this Agreement, if in any such
case such material breach remains uncured after the lapse of 30
days following the date that the Company has given Executive
written notice thereof;
(B) the material breach by
Executive of any duty referred to in clause (A) above as to which
at least one written notice has been given pursuant to clause
(A);
(C) any act of dishonesty,
misappropriation, embezzlement, intentional fraud or similar
conduct involving the Company or any of its affiliates;
(D) the conviction or the
plea of nolo contendere or the equivalent in respect of a felony
involving moral turpitude;
(E) any intentional damage
of a material nature to any property of the Company or any of its
affiliates; or
(F) the repeated
non-prescription use of any controlled substance or the repeated
use of alcohol or any other non-controlled substance that, in the
reasonable determination of the Company renders Executive unfit to
serve in his capacity as an employee of the Company or its
affiliates.
(iii)
“Change in Control” means the first to occur of
the following:
(A) any sale or transfer or
other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Company, on a consolidated
basis, in one transaction or a series of related transactions,
unless, immediately after giving effect to such transaction, at
least 85% of the total voting power normally entitled to vote in
the election of directors, managers or trustees, as applicable, of
the transferee is “beneficially owned” by persons who,
immediately prior to the transaction, beneficially owned 100% of
the total voting power normally entitled to vote
