form8k_021208.htm
SECURITIES
AND EXCHANGE COMMISSION
FORM
8-K
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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Date
of Report (Date of earliest event reported)
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February
6, 2008
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AFTERMARKET
TECHNOLOGY CORP.
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(Exact
name of registrant as specified in its
charter)
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(State
or other jurisdiction of incorporation)
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(IRS
Employer Identification No.)
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1400
Opus Place, Suite 600, Downers Grove, Illinois
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(Address
of principal executive offices)
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Registrant's telephone number, including area
code
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(Former
name or former address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Forward-Looking
Statement Notice
This
Current Report on Form 8-K contains forward-looking statements (as such
term is defined in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934) and information
relating to us that are based on the current beliefs of our management as well
as assumptions made by and information currently available to management,
including those related to the markets for our products, general trends in our
operations or financial results, plans, expectations, estimates and beliefs. These statements reflect our judgment as of
the date of this Current Report with respect to future events, the outcome of
which is subject to risks, which may have a significant impact on our business,
operating results or financial condition. Readers are cautioned that
these forward-looking statements are inherently uncertain. Should one
or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results or outcomes may vary materially from
those described herein. We undertake no obligation to update
forward-looking statements. The factors that could cause actual
results to differ are discussed in our Annual Report on Form 10-K for the
year ended December 31, 2006 and our other filings made with the
SEC.
Item
2.02. Results of Operations
and Financial Condition.
On
February 12, 2008, Aftermarket Technology Corp. issued a press release (a copy
of which is attached as Exhibit 99) announcing, among other things, the
following for the quarter and year ended December 31, 2007:
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income
from continuing operations;
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income
from continuing operations per diluted
share;
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Logistics
segment net sales and profit; and
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Drivetrain
segment net sales and profit.
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Item
5.02. Departure of
Directors or Principal Officers; Election of Directors; Appointment of Principal
Officers; Compensatory Arrangements of Certain
Officers.
New
Employment Agreement with Principal Executive Officer
On February 6, 2008, our
Board of Directors approved and we subsequently entered into an amended and
restated employment agreement with our principal executive officer, Chairman,
President and CEO Donald T. Johnson, Jr. The agreement
provides for Mr. Johnson’s employment through December 31, 2008,
subject to a single one-year automatic renewal unless we give Mr. Johnson
90 days’ prior written notice of nonrenewal. The agreement also
provides an annual base salary of $560,000, participation in our various
incentive and benefit plans, an annual car allowance of $24,000, and
reimbursement of up to $20,000 per year of Mr. Johnson’s expenses for
financial planning, club dues, estate planning, home office and similar
matters. The agreement also includes
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a
noncompetition provision that runs for 24 months after Mr. Johnson
ceases to be employed by us,
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a
confidentiality provision, and
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a
provision that prohibits Mr. Johnson from soliciting our employees for
employment by other companies during the 36-month period after
ceasing
to be employed by Aftermarket Technology
Corp.
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The
agreement provides for severance equal to two times the sum of
Mr. Johnson’s annual base salary plus his target bonus under our annual
incentive compensation plan if he is terminated without cause or resigns for
“good reason” (see below) or becomes disabled. If termination without
cause or resignation for good reason occurs within 18 months after a “change in
control” (see below), or if Mr. Johnson’s agreement is not renewed within
18 months after a change in control, then his severance will equal three times
the sum of his annual base salary plus his target bonus under the annual
incentive compensation plan.
The
severance payments would be made over two years unless the end of employment
occurs within 18 months after a change in control, in which case the severance
would be paid in a single payment within ten days after Mr. Johnson’s
termination. The severance is subject to income tax gross-up of up to
$5,000,000 if Mr. Johnson’s employment ends within 18 months after a change
in control.
In
addition to severance, Mr. Johnson would also receive a prorated portion of
any cash bonus under our long-term incentive plan discussed
below. The agreement also provides for continued medical benefits for
five years after termination.
“Good
reason” means (i) a material diminution in Mr. Johnson’s compensation,
authority or responsibilities that is not justified by his performance, or
(ii) our material breach of the employment agreement, where such diminution
or breach is not cured within 30 days after notice from Mr.
Johnson.
“Change
in control” occurs if (i) a reorganization, merger or consolidation of
Aftermarket Technology Corp. or sale of all or substantially all of our assets
occurs unless after such transaction at least 85% of the total voting power of
the entity surviving or resulting from such transaction is beneficially owned by
persons who prior to the transaction beneficially owned 100% of the total voting
power of Aftermarket Technology Corp., (ii) any shareholder (or group of
shareholders) becomes the beneficial owner of more than 35% of the total voting
power of Aftermarket Technology Corp., or (iii) during any 12 month period
individuals who at the beginning of such 12-month period constituted our Board
of Directors (together with any new directors whose election by such Board or
whose nomination for election by our shareholders was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of our
Board of Directors.
Mr.
Johnson’s outstanding and unvested stock options and restricted stock will
continue to vest according to their vesting schedules after Mr. Johnson ceases
to be employed by us under the following circumstances:
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the
expiration of his employment term without
renewal,
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his
termination without cause or resignation for good
reason,
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his
permanent disability, or
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his
voluntary resignation if the Board determines that Mr. Johnson has
provided an orderly transition to his
successor.
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If Mr.
Johnson ceases to be our employee due to his death, then all outstanding and
unvested stock options and restricted stock will immediately vest and his estate
will be entitled to
a prorated portion of any cash bonus under our long-term incentive
plan.
All stock
options that are vested as of the time Mr. Johnson ceases to be our employee and
all options that subsequently vest as described above will remain in effect and
be exercisable until the tenth anniversary of their respective dates of
grant.
Long-Term
Incentive Plan
On
February 6, 2008, the Board granted to Mr. Johnson 71,275 options to purchase
common stock at an exercise price of $24.19 (the closing price of our stock on
the Nasdaq Global Select Market on the date of grant) and 22,231 shares of
restricted stock. These grants were made pursuant to our long-term
incentive plan for our senior officers. Mr. Johnson’s target cash
award under the plan was set at $540,000. The cash award will be
payable after the end of 2010 if we achieve certain targets for revenue, net
income and return on invested capital for 2008-2010. The total value
of the stock and cash awards to Mr. Johnson under the long-term incentive
plan is intended to equal 300% of his annual base salary.
The stock
options will vest and become exercisable in one-third increments on the first,
second and third anniversaries of the grant date and will expire on February 6,
2018. The restricted stock will vest and cease to be restricted in
one-third increments on the first, second and third anniversaries of the grant
date. Under certain circumstances, vesting of both the stock options
and the restricted stock will continue after the time Mr. Johnson ceases to be
an employee of Aftermarket Technology Corp., as described
above.
Change
in Control Benefits for other Executive Officers
On
February 6, 2008 our Compensation Committee increased the severance payable to
three of our named executive officers (Chief Financial Officer Todd R. Peters,
President of ATC Logistics William L. Conley, Jr., and Vice President, Secretary
and General Counsel Joseph Salamunovich) in the event of termination without
cause (or resignation for good reason) where such termination (or resignation)
occurs within 18 months after a change in control. In that event,
severance for each of Messrs. Conley and Salamunovich will equal 1.5 times the
sum of his annual base salary plus his target bonus under our annual incentive
compensation plan, and severance for Mr. Peters will equal two times the
sum of his annual base salary plus his target bonus under our annual incentive
compensation plan. In each case the executive would also receive a
prorated portion of any cash bonus under our long-term incentive
plan.
Item
7.01. Regulation FD
Disclosure.
In our
February 12, 2008 press release, we also provided projections of the
following information for the year ending December 31, 2008.
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income
from continuing operations per diluted
share;
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Logistics
segment revenue and profit; and
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Drivetrain
segment revenue and profit.
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The
information in this Item 7.01 shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, nor shall it be
deemed incorporated by reference in any filing under the Securities Act
of 1933, except as shall be expressly set forth by specific reference in
such filing.
Item
9.01. Financial Statements
and Exhibits.
Exhibit
99: press release
dated February 12, 2008
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Dated: February
12, 2008
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AFTERMARKET
TECHNOLOGY CORP.
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By:
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/s/
Joseph Salamunovich
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Title: Vice
President
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