SEPARATION
AGREEMENT,
WAIVER AND RELEASE
This Separation Agreement, Waiver and
Release (“Agreement”) is made and entered into freely
and voluntarily by and between Sherrell Smith (hereinafter referred
to as “Employee”) and Universal Technical Institute,
Inc. (hereinafter referred to as “UTI” or
“Company”).
WHEREAS, Employee has been employed
by UTI for a period of approximately twenty three (23) years;
and
WHEREAS, Employee has held various
positions with UTI including serving as Student Services Director,
Campus President, Vice President of Regional Operations, Senior
Vice President of Operations and most recently Chief Operating
Officer which position has responsibility and oversight on a
nationwide basis for the operations of all of UTI’s campuses;
and
WHEREAS, during his employment,
Employee has gained access to confidential information as described
more fully in this Agreement and acquired an extensive amount of
knowledge about UTI’s operations, strategies, and
business;
NOW, THEREFORE, for and in
consideration of the acts, payments, covenants and mutual
agreements herein described and agreed to be performed, Employee
and UTI agree as follows:
1. Termination Date . Employee agrees, recognizes
and accepts that Employee’s employment relationship with UTI
has been terminated as of Wednesday, July 1 st , 2009
and that UTI has no obligation, contractual or otherwise, to
re-employ or recall Employee in the future.
2. Payment(s) . For and in consideration of the
promises and covenants set forth herein through the period ending
seventy eight (78) weeks after the date of this Agreement, UTI
agrees to pay Employee separate bi-weekly payments pursuant to
UTI’s normal payroll practices in the gross amount of twelve
thousand one hundred fifteen dollars and thirty eight cents
($12,115.38) less applicable local, state and federal withholdings.
UTI further agrees to pay to Employee the sum of twenty four
thousand two hundred thirty dollars and seventy six cents
($24,230.76) representing (4) weeks of vacation pay upon execution
of this Agreement. The total amount payable under this
Paragraph 2 shall be four hundred ninety six thousand seven
hundred thirty dollars and seventy six cents ($496,730.76), less
applicable local, state, and federal withholdings.
3. Bonus Payments . For fiscal year ending
September 30, 2009 , Employee will be entitled to a
pro-rated portion of an annual bonus through the date of
termination if: (a) such a bonus is approved by UTI’s
Board of Directors as payable to all current employees, and
(b) Employee signs, returns, and does not revoke this
Agreement. The 2009 annual bonus, if payable, will be paid during
December of 2009, and the bonus, if any, will be based on the
performance metrics previously established by the CEO and Board of
Directors.
All stock options and restricted
stock held by Employee will expire according to the applicable
grant or plan, and Employee’s existing equity in UTI that has
vested shall remain the vested property of Employee.
4. Attorneys Fees . UTI will pay an amount not to
exceed ten thousand dollars ($10,000) to legal counsel retained by
Employee for the purpose of reviewing and advising Employee
regarding this Agreement. The legal counsel retained by Employee or
Employee shall submit an invoice to Chad Freed, 20410 N. 19
th Avenue, Phoenix, AZ 85027 and payment will be made
directly to legal counsel. All payments made are made on behalf of
the Employee and legal counsel retained by Employee is not a third
party beneficiary of this Agreement. Employee, not UTI, shall be
liable to legal counsel for all fees in excess of $10,000. Employee
agrees to pay all taxes that may be payable as a result of payments
made on behalf of Employee under this provision.
5. Benefits . Employee’s current medical,
dental and vision benefits will continue pursuant to UTI policy,
until July 15 th , 2009. Beginning, on the first
day that active employee coverage is ineffective, Employee may
elect to continue current medical, dental and vision benefits for
up to eighteen (18) months in accordance with the plan
provisions and the Consolidated Omnibus Budget Reconciliation
Action of 1985 (COBRA). If Employee signs, returns and does not
revoke this Agreement, UTI will continue to pay towards the
Employee’s COBRA coverage a monthly amount equal to the
Company paid portion of the insurance premium for the coverage held
by Employee during active employment and any administrative fee for
a period of Eighteen (18) months, provided the Employee makes
a timely election to receive COBRA benefits. Additionally, Employee
shall be entitled, for an Eighteen (18) month period following
the termination of employment, to the perquisites and benefits of
the Armadacare program or its successor program.
UTI will provide to Employee
professional outplacement services for a period of twelve (12)
months through the firm of Right Management, at a cost not to
exceed a total value of twelve thousand dollars ($12,000).
Employee shall be responsible for any
and all income taxes, if any, associated with any benefits provided
to him under this Agreement.
6. Acknowledgement of Consideration . Employee
acknowledges and agrees that the payments set forth in
Paragraph 2, 3, 4 and the benefits set forth in
Paragraph 5 are for and in consideration of Employees
promises, covenants, and undertakings in this Agreement. Employee
acknowledges and agrees that all of the payment(s) and benefits
referenced in this Agreement constitute special consideration to
Employee in exchange for the promises made herein by Employee and
that UTI is making payments and providing benefits herein to
Employee in excess of those it may otherwise be obligated to
provide to Employee.
7. Employee’s Full Release and Waiver of All
Claims . For and in consideration of UTI’s promises and
covenants set forth herein, Employee hereby releases, acquits, and
forever discharges UTI, its subsidiaries, and related and
affiliated entities and the current and former officers, directors,
agents, assigns, representatives and employees (collectively, the
“Released Parties”) of each of the foregoing, from any
and all actions, claims, damages, lawsuits, expenses, or costs of
whatever nature arising out of Employee’s employment, the
termination of employment with UTI, and any claims Employee may
have by virtue of his being a shareholder of UTI, whether known or
not, by either party at the time of execution of this
Agreement.
This Release and Waiver includes, but is not limited to, any
rights or claims which may be brought under Title VII of the Civil
Rights Act of 1964, the Fair Labor Standards Act (FLSA), the
Americans with Disabilities Act (ADA), the Employee Retirement
Income Security Act (ERISA), the Equal Pay Act (EPA), the
Rehabilitation Act of 1973, the Family and Medical Leave Act
(FMLA), the National Labor Relations Act (NLRA), Occupational
Safety and Health Act, Sarbanes-Oxley Act, the Securities Act of
1933, Securities Exchange Act of 1934, COBRA, the Labor Management
Relations Act (LMRA), the Arizona Civil Rights Act, the Arizona
Employment Protection Act or any other action or claim under any
federal, state or local statute, or regulation or under common law.
Employee’s release also includes all claims for constructive
discharge, negligent supervision, breach of contract, fraud, breach
of express or implied covenant, defamation, libel, slander,
intentional or negligent infliction of emotional distress, tortious
interference with contract, retaliation, failure to pay wages,
bonuses, commissions or other benefits, attorneys’ fees and
any other claim that could be raised by Employee as a result of
Employee’s employment, the termination of employment with
UTI, or by virtue of Employee being a shareholder of UTI.
This Release and Waiver does not affect Employee’s right
to file a charge or participate in any federal, state or local
investigation by any governmental agency or to challenge the
validity of this Agreement, or Employee’s right to any
governmental benefits payable under any Social Security or
Worker’s Compensation law now or in the future.
Notwithstanding the foregoing, Employee acknowledges and agrees
that he (1) is not entitled to any monetary or personal relief
with respect to any charge filed by any person or entity with any
federal, state or local government agency; and
(2) specifically assigns any such recovery to UTI. Further,
this Agreement is not intended to and does not waive or release any
claim under the Arizona Minimum Wage Act.
This Release and Waiver does not include any claims that may
arise out of this Agreement or to enforce the terms of this
Agreement.
8. Employee’s Release of Any Age Claims. Also
in consideration of the promises and understandings contained in
this Agreement, Employee hereby waives, releases, discharges, and
agrees that Employee will not institute, prosecute or pursue
against the Released Parties any, claims, causes of action, or
suits for claims, if any, that have arisen as of the date of this
Agreement under the Age Discrimination in Employment Act
(“ADEA”), as amended, or under the age provisions of
any other applicable state or federal law. Employee acknowledges
that he is knowingly and voluntarily waiving and releasing any
rights he may have under the ADEA, as amended. Employee also
acknowledges that the consideration given for the waiver and
release in the preceding paragraph is in excess of anything of
value to which he is or may have been enti
