AFTERMARKET TECHNOLOGY HOLDINGS CORP.
AMENDED AND RESTATED 1994 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made and entered into
as of the Date of Grant indicated below by and between Aftermarket Technology
Holdings Corp., a Delaware corporation (the "Company"), and the person named
below as Employee.
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THAT ACT OR THE COMPANY SHALL HAVE
RECEIVED AN OPINION OF COUNSEL (WHICH COUNSEL AND OPINION SHALL BE
SATISFACTORY TO THE COMPANY'S COUNSEL) THAT REGISTRATION OF SUCH
SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
WHEREAS, Employee is an employee of the Company and/or one or more of
its subsidiaries; and
WHEREAS, pursuant to the Company's Amended and Restated 1994 Stock
Incentive Plan, as amended (the "Plan"), the committee of the Board of Directors
of the Company administering the Plan (the "Committee") has approved the grant
to Employee of an option to purchase shares of the common stock, par value $.01,
of the Company (the "Common Stock"), on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company
hereby grants to Employee, and Employee hereby accepts, as of the Date of Grant,
an option to purchase the number of shares of Common Stock indicated below (the
"Option Shares") at the Exercise Price per share indicated below, which option
shall expire at 5:00 o'clock p.m., California time, on the Expiration Date
indicated below and shall be subject to all of the terms and conditions set
forth in this Agreement (the "Option"). On ___________________________, the
Option shall become exercisable to purchase, and shall vest with respect to,
that number of Option Shares (rounded to the nearest whole share) equal to the
total number of Option Shares multiplied by the Vesting Rate indicated below.
Employee:
Date of Grant:
Number of shares purchasable:
Exercise Price per share:
Expiration Date:
Vesting Rate:
The Option is intended to qualify as an incentive stock option under Section 422
of the Internal Revenue Code (an "Incentive Stock Option") and consequently:
(a) the Expiration Date shall not be more than 10 years after the
Date of Grant and the Exercise Price per share shall not be less than the Fair
Market Value (as defined in the Plan) per share on the Date of Grant; PROVIDED,
HOWEVER, that if, on the Date of Grant, Employee owns (after application of the
family and other attribution rules of Section 425(d) of the Internal Revenue
Code) more than 10% of the total combined voting power of all classes of stock
of the Company or of its parent or subsidiary corporations, then the Expiration
Date shall not be more than five years after the Date of Grant and the Exercise
Price per share shall not be less than 110% of the Fair Market Value per share
on the Date of Grant; and
(b) the aggregate Fair Market Value (determined as of the date such
options are granted) of the shares of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by Employee during
any calendar year (under the Plan and all other stock option plans of the
Company and its parent and subsidiary corporations) shall not exceed $100,000.
2. ACCELERATION AND TERMINATION OF OPTION.
(a) Termination of Employment.
(i) TERMINATION WITHIN ONE YEAR AFTER CHANGE OF CONTROL.
In the event that Employee shall cease to be an employee of the Company or any
of its subsidiaries (such event shall be referred to herein as the "Termination"
of Employee's "Employment") for any reason, or for no reason, within one year
after a Change of Control (as hereinafter defined), then (A) the portion of the
Option that has not vested on or prior to the date of such Termination of
Employment shall fully vest on such date and (B) the Option shall terminate upon
the earlier of the Expiration Date or the first anniversary of the date of such
Termination of Employment. "Change of Control" shall mean the first to occur of
the following events:
(W) any sale or transfer or other conveyance, whether director
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, if, immediately after giving effect to such transaction,
any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Securities Exchange Act, as amended
(the "Exchange Act"), whether or not applicable) (other than an
Excluded Person, as defined herein) is or becomes the "beneficial
owner," directly or indirectly, of more than 35% of the total voting
power in the aggregate normally entitled to vote in the election of
directors, managers or trustees, as applicable, of the transferee;
(X) any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) (other than an Excluded Person) is or becomes the
"beneficial owner," directly or indirectly, of more than 35% of the
total voting power in the aggregate of all classes of Capital Stock of
the Company then outstanding normally entitled to vote in elections of
directors, unless the percentage so owned by an Excluded Person is
greater;
(Y) during any period of 12 consecutive months after the Issue
Date, individuals who at the beginning of any such 12-month period
constituted the Board of Directors of the Company (together with any
new directors whose election by such Board or whose nomination for
election by the shareholders of the Company was approved by a vote of
a majority of the directors then still in office who were either
directors at the
2
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors of the Company then in office; or
(Z) a reorganization, merger or consolidation of the Company
(other than a reorganization, merger or consolidation the sole purpose
of which is to change the Company's domicile solely within the United
States) the consummation of which results in the outstanding
securities of any class then subject to the Option being exchanged for
or converted into cash, property and/or a different kind of
securities.
(ii) RETIREMENT. If Employee's Employment is Terminated by
reason of Employee's retirement in accordance with the Company's then-current
retirement policy ("Retirement"), and a Change of Control shall not have
occurred within one year prior thereto, then (A) the portion of the Option that
has not vested on or prior to the date of such Retirement shall terminate on
such date and (B) the remaining vested portion of the Option shall terminate
upon the Expiration Date.
(iii) DEATH OR PERMANENT DISABILITY. If Employee's Employment
is Terminated by reason of the death or Permanent Disability (as hereinafter
defined) of Employee, and a Change of Control shall not have occurred within one
year prior thereto, then (A) the portion of the Option that has not vested on or
prior to the date of such Termination of Employment shall terminate on such date
and (B) the remaining vested portion of the Option shall terminate upon the
earlier of the Expiration Date or the first anniversary of the date of such
Termination of Employment. "Permanent Disability" shall mean the inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than 12 months. Employee shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been furnished to the
Board in such form and manner, and at such times, as the Board may require. Any
determination by the Board that Employee does or does not have a Permanent
Disability shall be final and binding upon the Company and Employee.
(iv) OTHER TERMINATION. If Employee's Employment is Terminated
for no reason, or for any reason other than Retirement, death or Permanent
Disability, and a Change of Control shall not have occurred within one year
prior thereto, then (A) the portion of the Option that has not vested on or
prior to the date of such Termination of Employment shall terminate on such date
and (B) the remaining vested portion of the Option shall terminate on the date
that is 30 days after the date of such Termination of Employment.
(b) DEATH FOLLOWING TERMINATION OF EMPLOYMENT. Notwithstanding
anything to the contrary in this Agreement, if Employee shall die at any time
after the Termination of his or her Employment and prior to the Expiration Date,
then (i) the portion of the Option that has not vested on or prior to the date
of such death shall terminate on such date and (ii) the remaining vested portion
of the Option shall terminate on the earlier of the Expiration Date or the first
anniversary of the date of such death.
(c) OTHER EVENTS CAUSING ACCELERATION OF OPTION. The Committee, in
its sole discretion, may accelerate the exercisability of the Option at any time
and for any reason.
(d) OTHER EVENTS CAUSING TERMINATION OF OPTION. Notwithstanding
anything to the contrary in this Agreement, the Option shall terminate upon
3
the consummation of any of the following events, or, if later, the thirtieth day
following the first date upon which such event shall have been approved by both
the Board and the stockholders of the Company:
(i) the dissolution or liquidation of the Company;
(ii) a sale of substantially all of the property and
assets of the Company, unless the terms of such sale shall provide otherwise; or
(iii) a Change of Control, if the Committee elects to
terminate the Option in connection therewith.
(e) EXCLUDED PERSON. For purposes of this Section 2, the term
"Excluded Person" has the meaning ascribed to such term in that certain
Indenture dated as of August 2, 1994 by and among Aftermarket Technology Corp.,
a wholly-owned subsidiary of the Company, the Guarantors named therein and
American Bank National Association.
3. ADJUSTMENTS. In the event that the outstanding securities of the
class then subject to the Option are increased, decreased or exchanged for or
converted into cash, property and/or a different number or kind of securities,
or cash, property and/or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a
regular, quarterly cash dividend) or other distribution, stock split, reverse
stock split or the like, or in the event that substantially all of the property
and assets of the Company are sold, then, unless such event shall cause the
Option to terminate pursuant to Section 2(d) hereof (i) the terms of such
transaction provide otherwise or (ii) the Committee shall make appropriate and
proportionate adjustments in the number and type of shares or other securities
or cash or other property that may thereafter be acquired upon the exercise of
the Option; PROVIDED, HOWEVER, that any such adjustments in the Option shall be
made without changing the aggregate Exercise Price of the then unexercised
portion of the Option.
4. EXERCISE. The Option shall be exercisable during Employee's
lifetime only by Employee or by his or her guardian or legal representative, and
after Employee's death only by the person or entity entitled to do so under
Employee's last will and testament or applicable intestate law. The Option may
only be exercised by the delivery to the Company of a written notice of such
exercise, which notice shall specify the number of Option Shares to be purchased
(the "Purchased Shares") and the aggregate Exercise Price for such shares (the
"Exercise Notice"), together with payment in full of such aggregate Exercise
Price in cash or by check payable to the Company; PROVIDED, HOWEVER, that
payment of such aggregate Exercise Price may instead be made, in whole or in
part, by the delivery to the Company of a certificate or certificates
representing shares of Common Stock, duly endorsed or accompanied by a duly
executed stock powers, which delivery effectively transfers to the Company good
and valid title to such shares, free and clear of any pledge, commitment, lien,
claim or other encumbrance (such shares to be valued on the basis of the
aggregate Fair Market Value (as defined in the Plan) thereof on the date of such
exercise), provided that the Company is not then prohibited from purchasing or
acquiring such shares of Common Stock.
5. FIRST REFUSAL RIGHTS ON PURCHASED SHARES.
5.1 SALES BY EMPLOYEE. Employee agrees not to Transfer any
Purchased Shares (or any direct or indirect interest therein) or any stock
certificate representing the same, now or hereafter at any time owned by him,
except to a Permitted Transferee or as required or permitted by the provisions
of this Section 5.
4
5.2 BONA FIDE OFFERS.
(a) If Employee desires to Transfer any Purchased Shares and such
Employee shall have received a bona fide arms' length written offer (a "Bona
Fide Offer") from a Person other than an Affiliate of Employee (the "Outside
Party") for the Transfer of such Purchased Shares, Employee shall give written
notice (the "Option Notice") to each of Aurora Equity Partners L.P., a Delaware
limited partnership ("AEP"), Aurora Overseas Equity Partners I, L.P., a Cayman
Islands exempted limited partnership ("AOEP" and, collectively with AEP, the
"Aurora Entities") and the Company setting forth such desire, which notice shall
set forth at least the name and address of the Outside Party and the price and
terms of the Bona Fide Offer and shall be accompanied by a copy of the Bona Fide
Offer and evidence demonstrating, to the reasonable satisfaction of the Aurora
Entities and the Company, the Outside Party's ability to consummate such offer.
Upon the giving of such Option Notice, the Aurora Entities shall have the option
to purchase, on a pro rata basis, at the price offered by the Outside Party in
the Bona Fide Offer, all or any portion of the Purchased Shares specified in the
Option Notice, said option to be exercised within ten Business Days following
the giving of such Option Notice, by giving a counter-notice (an "Aurora
Counter-Notice") to Employee (with a copy of such Aurora Counter-Notice to the
Company). In the event that a determination must be made (as described below)
as to the fair market value of non-cash consideration, the ten Business Day
period referred to in the immediately preceding sentence shall be extended to
such greater period of time, not to exceed 20 Business Days, specified in good
faith by a disinterested majority of the Board of Directors. In the event that
the Bona Fide Offer provides, in whole or in part, for non-cash consideration,
the "price" offered by the Outside Party shall be deemed to be the amount of
cash, if any, provided in the Bona Fide Offer plus the fair market value of the
non-cash consideration as determined in good faith by a disinterested majority
of the Board.
(b) Subject to paragraph (d) of this Section 5.2, if either or both
Aurora Entities elect to purchase such Purchased Shares, each such electing
Aurora Entity shall be obligated to purchase, and Employee shall be obligated to
sell, such Purchased Shares at a closing to be held on the 15th Business Day
after the giving of the Aurora Counter-Notice at the principal executive offices
of the Company, or at such other time and place as may be mutually acceptable to
each purchasing Aurora Entity and Employee. The closing of any such purchase by
an Aurora Entity may, at the election of the purchasing Aurora Entity, be
delayed up to 30 Business Days in order to permit such acquisition of such
Purchased Shares to be made in conformity with applicable laws, including the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
(c) Subject to paragraph (d) of this Section 5.2, if the Aurora
Entities do not elect to purchase all of such Purchased Shares proposed to be
sold by Employee within the time limits specified in paragraph (a) of this
Section 5.2, then the Company shall have the option, exercisable by the delivery
of a counter-notice to Employee no later than 15 Business Days following the
date of the Option Notice, to purchase, at the price offered by the Outside
Party in the Bona Fide Offer, all or any portion of the Shares specified in the
Option Notice and not purchased by the Aurora Entities. In the event that a
determination must be made as to the fair market value of non-cash
consideration, the 15 Business Day period referred to in the immediately
preceding sentence shall be extended to such greater period of time, not to
exceed 23 Business Days, specified in good faith by a disinterested majority of
the Board of Directors.
(d) If the Aurora Entities and the Company elect to purchase fewer
than all of the Purchased Shares subject to the Bona Fide Offer within the time
limits specified above, then Employee, at any time within a period of three
months from the giving of said Option Notice, may Transfer all (but not less
than all) of the remainder of
5
such Shares to the Outside Party at the price and on the terms contained in the
Bona Fide Offer; PROVIDED, HOWEVER, that in the event Employee has not so
Transferred said Shares to the Outside Party within said three-month period,
then said Shares thereafter shall continue to be subject to all of the
restrictions contained in this Section 5 as though no Option Notice had ever
been given.
(e) At the closing of any purchase of Purchased Shares pursuant to
this Section 5.2, Employee shall deliver certificates representing such Shares
duly endorsed for transfer and accompanied by all requisite stock transfer
taxes, and such Purchased Shares shall be free and clear of any and all Liens
(other than those arising under this Agreement) and Employee shall represent and
warrant to such effect and to the effect that Employee is the beneficial owner
of such Purchased Shares. The Person making such purchase shall deliver at such
closing, by certified or bank check, payment in full for the Purchased Shares
being purchased by such Person. At such closing, all of the parties to the
transaction shall execute such additional documents as are otherwise necessary
or appropriate.
(f) If, in any instance, any Aurora Entity or the Company elects not
to exercise its rights hereunder or elects to waive such rights, such election
shall not constitute a waiver of such Person's rights to receive an Option
Notice in the case of any Transfer subsequently proposed by Employee.
5.3 INVOLUNTARY TRANSFERS. (a) Employee shall notify the
Company and the Aurora Entities promptly upon the occurrence of an Involuntary
Transfer. If an Involuntary Transfer of any of the Purchased Shares owned by
Employee shall occur, the Aurora Entities and the Company shall have the same
rights of first refusal under Section 5.2 above with respect thereto (the
"Transferred Shares") as if the Involuntary Transfer had been a proposed
voluntary Transfer by Employee, except that:
(i) the periods within which such rights must be exercised
shall run from the date notice of the Involuntary Transfer is received
from Employee or its legal representatives with respect to which such
Involuntary Transfer has occurred;
(ii) such rights shall be exercised by notice to the
involuntary transferee rather than to Employee with respect to which
such Involuntary Transfer has occurred; and
(iii) the purchase price of any Transferred Shares shall
be the Fair Market Value of such Transferred Shares on the date that
the rights of first refusal provided by this Section 5.3 are exercised
with respect to such Transferred Shares.
(b) At the closing of any purchase of Transferred Shares, the
involuntary transferee shall deliver certificates representing the Transferred
Shares being purchased by the relevant Aurora Entity or the Company, as the case
may be, duly endorsed for transfer and accompanied by all requisite stock
transfer taxes, and such Transferred Shares shall be free and clear of any and
all Liens arising through the action or inaction of the involuntary transferee
(other than those arising under this Agreement) and the involuntary transferee
shall represent and warrant to such effect and to the effect that such
involuntary transferee is the beneficial owner of such Shares. The Person
making such purchase shall deliver at closing, by a certified or bank check,
payment in full of the purchase price, for the Transferred Shares being
purchased by such Person. At such
6
closing, all of the parties to the transaction shall execute such
additional documents as are otherwise necessary or appropriate.
(c) In the event that the provisions of this Section 5.3 shall
be held to be unenforceable with respect to any particular Involuntary
Transfer of Purchased Shares, the Aurora Entities and the Company shall
have a right of first refusal as set forth in Section 5.2 hereof if the
involuntary transferee subsequently obtains a Bona Fide Offer for and
desires to Transfer such Purchased Shares.
5.4 APPLICATION OF FIRST REFUSAL RIGHTS. The first refusal
rights provided in Sections 5.2 and 5.3 shall not apply to any Transfer of
Purchased Shares:
(a) to the Company, to an Aurora Entity or to a Permitted Transferee,
or
(b) pursuant to an effective registration statement under the Act.
5.5 TERMINATION OF FIRST REFUSAL RIGHTS. Notwithstanding
anything herein to the contrary, the rights of first refusal provided in this
Section 5 shall terminate, with respect to all Purchased Shares held or
subsequently acquired by Employee, upon the occurrence of the effective date
(the "Qualified IPO Date") of the registration statement for the first
underwritten public offering of the Common Stock; PROVIDED that there are sales
pursuant to such registration statement of shares of Common Stock for an
aggregate offering price of not less than $20,000,000.
5.6 SURVIVAL. The provisions of this Section 5 shall survive
the exercise of all or any part of the Option and shall continue in effect for
so long as Employee or any Permitted Transferee thereof owns or controls any
Purchased Shares.
6. THIRD PARTY OFFER FOR ALL OUTSTANDING SHARES.
6.1 "DRAG-ALONG" OBLIGATIONS. If either Aurora Entity shall
receive an offer in writing from a third party which is not an Affiliate of such
Aurora Entity (a "Third Party Offeror") to purchase all of the issued and
outstanding Shares held by such Aurora Entity, to effect a business combination
of the Company with such Person or an Affiliate thereof or to purchase all or
substantially all the assets of the Company (each an "Acquisition Proposal"),
and the Aurora Entities desire to accept or cause the Company to accept such
Acquisition Proposal, either of the Aurora Entities shall deliver a notice (an
"Acquisition Notice") to the Company (which shall deliver a copy of such
Acquisition Notice to Employee), which Acquisition Notice shall contain a copy
of such Acquisition Proposal, including the name and address of the Third Party
Offeror and the terms of the Acquisition Proposal. If Employee receives any
Acquisition Proposal, Employee shall promptly transmit such Acquisition Proposal
to the Company and each Aurora Entity (which the Aurora Entities may elect not
to pursue without any liability or obligation to Employee or the Company).
Employee agrees that, upon receipt of such Acquisition Notice, Employee shall be
obligated to sell all of Employee's Purchased Shares to the Third Party Offeror
upon the terms and conditions set forth in the Acquisition Proposal, or, as the
case may be, to vote Employee's Purchased Shares in favor of the merger or sale
of all or substantially all the assets of the Company as described in the
Acquisition Proposal, and otherwise to take all actions necessary or appropriate
to cause the Company to consummate the proposed transaction. In any such
transaction, all Shares of Common Stock shall be purchased at, or be converted
into the right to receive, the same price per Share of Common Stock.
6.2 TERMINATION OF DRAG-ALONG OBLIGATIONS. Notwithstanding
anything herein to the contrary, the rights and obligations provided for in this
Section 6 shall terminate,
7
with respect to all Purchased Shares held or subsequently acquired by Employee,
upon the occurrence of the Qualified IPO Date.
6.3 SURVIVAL. The provisions of this Section 6 shall survive
the exercise of all or any part of the Option and shall continue in effect for
so long as Employee or any Permitted Transferee thereof owns or controls any
Purchased Shares.
7. PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated
to withhold an amount on account of any tax imposed as a result of the exercise
of the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then Employee shall, on the first day upon which the Company becomes
obligated to pay such amount to the appropriate taxing authority, pay such
amount to the Company in cash or by check payable to the Company.
8. NOTICES. All notices and other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company at
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx X. Xxxxx, or to Employee at the address set forth beneath his or her
signature on the signature page hereto, or at such other addresses as they may
designate by written notice in the manner aforesaid.
9. STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding
anything to the contrary in this Agreement, no shares of stock purchased upon
exercise of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (a) such shares have not been admitted
to listing upon official notice of issuance on each stock exchange upon which
shares of that class are then listed or (b) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of
or to incur liability under any federal, state or other securities law, or any
requirement of any stock exchange listing agreement to which the Company is a
party, or any other requirement of law or of any administrative or regulatory
body having jurisdiction over the Company.
10. NONTRANSFERABILITY. Neither the Option nor any interest therein
may be Transferred in any manner other than by will or the laws of descent and
distribution.
11. PLAN. The Option is granted pursuant to the Plan, as in effect
on the Date of Grant, and is subject to all the terms and conditions of the
Plan, as the same may be amended from time to time; PROVIDED, HOWEVER, that no
such amendment shall deprive Employee, without his or her consent, of the Option
or of any of Employee's rights under this Agreement. The interpretation and
construction by the Committee of the Plan, this Agreement, the Option and such
rules and regulations as may be adopted by the Committee for the purpose of
administering the Plan shall be final and binding upon Employee. Until the
Option shall expire, terminate or be exercised in full, the Company shall, upon
written request therefor, send a copy of the Plan, in its then-current form, to
Employee or any other person or entity then entitled to exercise the Option.
12. STOCKHOLDER RIGHTS. No person or entity shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of any Option
Shares until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
13. EMPLOYMENT RIGHTS. No provision of this Agreement or of the
Option granted hereunder shall (a) confer upon Employee any right to continue in
the employ of the Company or any of its subsidiaries, (b) affect the right of
the Company and each of its subsidiaries to terminate the employment of
Employee, with or without cause, or (c) confer upon Employee any right to
participate in any employee welfare or benefit plan or other program of the
Company
8
or any of its subsidiaries other than the Plan. EMPLOYEE HEREBY ACKNOWLEDGES
AND AGREES THAT THE COMPANY AND EACH OF ITS SUBSIDIARIES MAY TERMINATE THE
EMPLOYMENT OF EMPLOYEE AT ANY TIME AND FOR ANY REASON, OR FOR NO REASON, UNLESS
EMPLOYEE AND THE COMPANY OR SUCH SUBSIDIARY ARE PARTIES TO A WRITTEN EMPLOYMENT
AGREEMENT THAT EXPRESSLY PROVIDES OTHERWISE.
14. GOVERNING LAW. This Agreement and the Option granted hereunder
shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware without reference to choice or conflict of law principles.
15. DEFINITIONS.
"AFFILIATE," when used with reference to any Person, means any other
Person directly or indirectly, through one or more intermediaries, controlling,
controlled by or under common control with such first Person and, when used with
reference to any natural person, shall also include such person's spouse,
parents and descendants (whether by blood or adoption, and including
stepchildren) and the spouses of such persons. "Affiliated with" shall have a
correlative meaning to the term "Affiliate."
"BUSINESS DAY" shall mean any day on which banking institutions in Los
Angeles, California are not authorized or obligated by law to close.
"INVOLUNTARY TRANSFER" means any transfer, proceeding or action (other
than to a Permitted Transferee) by or in which Employee shall be deprived or
divested of any right, title or interest in or to any Purchased Shares,
including, without limitation, any seizure under levy of attachment or
execution, any foreclosure upon a pledge of such Purchased Shares, any transfer
in connection with bankruptcy (whether pursuant to the filing of a voluntary or
an involuntary petition under the Federal Bankruptcy Code of 1978, or any
modifications or revisions thereto) or other court proceeding to a debtor in
possession, trustee in bankruptcy or receiver or other officer or agency, or any
transfer to a state or to a public officer or agency pursuant to any statute
pertaining to escheat or abandoned property.
"LIENS" means any and all liens, claims, options, charges,
encumbrances, voting trusts, irrevocable proxies or other rights of any kind or
nature.
"PERMITTED TRANSFEREE" means, as to Employee, (i) the successors in
interest to such Employee, in the case of a Transfer upon the death of Employee,
(ii) Employee's spouse, parents and descendants (whether by blood or adoption,
and including stepchildren) and the spouses of such persons, (iii) any
transferee pursuant to a divorce or separation agreement or a final decree of a
court in a divorce action or upon or occasioned by the incompetence of such
Employee and (iv) in the case of a Transfer during such Employee's lifetime, any
Person in which no Person has any interest (directly or indirectly) except for
any of such Employee, such Employee's spouse, parents and descendants (whether
by blood or adoption, and including stepchildren) and the spouses of such
persons; PROVIDED that in respect of any Transfer by any Employee during such
Employee's lifetime pursuant to clause (ii) or (iv), Employee shall retain
voting power over all of the outstanding Shares being Transferred; and PROVIDED
FURTHER, that, in the case of a Transfer to a Person (such as a partnership or a
trust) as to which a governing instrument exists, (x) Employee shall furnish a
copy of such governing instrument to the Company in advance, (y) the Company
shall be reasonably satisfied that the terms of such governing instrument shall
not be inconsistent with the terms of this Agreement and (z) during the period
that such Common Stock is held by such Person, the Employee shall ensure that
the terms of such governing instrument shall not be amended in any manner that
results in such governing instrument being inconsistent with the terms of this
Agreement; PROVIDED, that prior written notice of any such Transfer is given to
the Company by Employee and that the Permitted Transferee
9
shall agree in advance of such Transfer to be bound by the terms of Section 5
hereof pursuant to a written agreement reasonably satisfactory to the Company
and the Aurora Entities.
"PERSON" means a company, a corporation, an association, a
partnership, a limited liability company, an organization, a joint venture, a
trust or other legal entity, an individual, a government or political
subdivision thereof or a governmental agency.
"TRANSFER" means any sale, exchange, assignment, transfer, pledge,
mortgage, hypothecation, gift, grant, encumbrance or other disposition of any
kind, whether voluntary, involuntary or by operation of law and whether direct
or indirect by transfer of any interest in the subject property or otherwise.
10
IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the Date of Grant.
AFTERMARKET TECHNOLOGY HOLDINGS CORP.
By________________________________
Name:
Title:
EMPLOYEE
__________________________________
Signature
__________________________________
Xxxxxx Xxxxxxx
__________________________________
City, State and Zip Code
__________________________________
Social Security Number
11
