EX-10.11 11 s002330x9_ex10-11.htm EXHIBIT 10.11

Exhibit 10.11

INSURANCE AUTO AUCTIONS, INC.

AMENDMENT TO
SIDNEY L. KERLEY EMPLOYMENT AGREEMENT

THIS Amendment entered into this 1st day of December, 2008, by and between Insurance Auto Auctions, Inc., an Illinois corporation (the “Company”) and Sidney L. Kerley (“Kerley”).

WITNESSETH:

WHEREAS, the Company and Kerley entered into that certain Employment Agreement dated October 6, 2004, as it may have been amended from time to time (the “Agreement”);

WHEREAS, the Company and Kerley desire to conform the Agreement to the requirements of Section 409A of the Internal Revenue Code of 1986 and the Treasury regulations issued thereunder;

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is agreed and acknowledged by the parties hereto, it is hereby agreed as follows:


1.
Effective as of October 1, 2008, Section 3.2(c) of the Agreement is replaced with the following:

“(c) Obligations for All Other Termination Reasons. For any other reason, upon the termination of this Agreement and Kerley’s employment hereunder apart from a Change of Control, the Company shall pay to Kerley, within ten (10) days following such termination of employment, an amount equal to the sum of (i) Kerley’s annual base salary at the time Kerley’s employment is terminated; plus (ii) Kerley’s average annual bonus received over the eight (8) fiscal quarters of the Company immediately preceding Company’s fiscal quarter during which Kerley’s employment is terminated, without exceeding Kerley’s target bonus for Company’s fiscal year during which Kerley’s employment is terminated, provided, however, that Kerley shall receive his target bonus if he is terminated within his first eight (8) fiscal quarters with the Company; plus (iii) Kerley’s auto allowance for the Company’s fiscal year during which Kerley’s employment is terminated. In addition, the Company shall provide, at Company’s expense, continued coverage for Kerley and his beneficiaries for a period extending through the earlier of the date Kerley begins any subsequent full-time employment for pay and the date that is one (1) year after Kerley’s termination of employment, under the Company’s health plan covering Kerley and Kerley’s beneficiaries, provided that Kerley properly elects coverage pursuant to Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”).”


2.
Effective as of October 1, 2008, Section 3.3(b) of the Agreement is replaced with the following:

“(b) Severance Benefits for Termination Within Two (2) Years of a Change of Control. If Kerley’s employment with the Company terminates by reason of Kerley’s Involuntary Termination (as defined in Section 3.3(a)(iii) above) or termination by the Company without Cause (as defined in Section 3.2(a)(ii)) within two (2) years of the effective date of the Change of Control, Kerley shall be entitled to receive the following:

(i)          within ten (10) days following such termination of employment, Company shall pay Kerley an amount equal to 150% of the sum of (A) Kerley’s Base Salary and (B) his Highest Annual Bonus;

(ii)          within ten (10) days following such termination of employment, Company shall pay Kerley any Accrued Obligations; and

(iii)          Company shall also provide, at its expense, continued coverage of Kerley and Kerley’s beneficiaries for eighteen (18) months after the Date of Termination or until Kerley commences any full-time employment, whichever comes first, under the Company’s health plan covering Kerley and Kerley’s beneficiaries, provided, however, that Kerley properly elects coverage pursuant to COBRA.”


3.
Effective as of October 1, 2008, Section 3.4 of the Agreement is amended by changing the second paragraph to read as follows:

“For purposes hereof, the Gross-Up Payment shall mean a payment to Kerley in such amount as is necessary to ensure that the net amount retained by Kerley, after reduction for any Excise Tax (including any penalties or interest thereon) on the Total Payments and any federal, state and local income or employment tax and Excise Tax on the Gross-Up Payment, provided for by this Section 3.4, but before reduction for any federal, state or local income or employment tax on the Total Payments, shall be equal to the Total Payments. The Gross-Up Payment shall be paid to Kerley within 90 days following his termination of employment.”


4.
Effective as of October 1, 2008, Section 6.4 of the Agreement is amended by inserting the following new sentences at the end thereof:

“To the extent subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), this Agreement will be administered to comply with the provisions thereof and the regulations thereunder.
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Notwithstanding the preceding provisions of this Agreement, if Kerley is a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), then any payments required to be delayed pursuant to such Section shall be paid to Kerley in a lump-sum on the date that is six months after his termination date (or the earliest date permitted by Code Section 409A).”

THEREFORE, the parties hereto have signed this Amendment as of the day and year first written above.


 
INSURANCE AUTO AUCTIONS, INC.

  By: /s/ Thomas C. O’Brien
 
Thomas C. O’Brien
   
President and Chief Executive Officer
     
 
SIDNEY L. KERLEY
  /s/ Sidney L. Kerley


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