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EXHIBIT 10.3
AGREEMENT
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THIS AGREEMENT (this "Agreement"), is dated as of this 30th day of
July, 1999, by and between AutoNation, Inc., a Delaware corporation
("AutoNation"), and Xxxx X. Xxxxxxxx ("Xxxxxxxx").
W I T N E S S E T H:
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WHEREAS, Xxxxxxxx has served AutoNation as an executive officer since
December 15, 1998.
WHEREAS, in accordance with this Agreement, Xxxxxxxx'x employment as an
executive officer of AutoNation will be terminated by mutual agreement of the
parties.
WHEREAS, Xxxxxxxx and AutoNation desire to set forth herein certain
agreements between them with respect to Xxxxxxxx'x termination as an executive
officer of AutoNation.
NOW, THEREFORE, in consideration of the mutual promises and the
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. TERMINATION OF EMPLOYMENT. The foregoing recitals are true and
correct and are part of this Agreement. The terms and conditions of this
Agreement have been approved by the Board of Directors of AutoNation, and this
Agreement is enforceable in accordance with its terms against the parties. The
termination of Xxxxxxxx'x employment as President of AutoNation shall be
effective (the "Effective Date") on July 30, 1999. Xxxxxxxx will remain at
AutoNation for a short time after the Effective Date, up to but not later than
August 31, 1999, to wrap up his affairs.
2. SEVERANCE COMPENSATION AND BENEFITS. Xxxxxxxx shall receive the
following severance compensation and benefits:
(a) A lump sum payment of TWO MILLION ONE HUNDRED THOUSAND
DOLLARS ($2,100,000.00) payable on the Effective Date.
(b) For the period commencing on the Effective Date and ending
December 31, 1999, Xxxxxxxx and his dependents shall be entitled to continue to
participate in AutoNation's group health and welfare benefit plans (as such
plans may be amended from time to time by AutoNation) on the same terms and
conditions as similarly-situated employees of AutoNation are subject to, and so
long as they are available to similarly-situated employees of AutoNation. The
usual and customary premium for medical and dental coverage will be payable in a
lump sum payment by Xxxxxxxx to AutoNation upon receipt of an invoice from
AutoNation. Beginning on the first of the month following the cessation of group
plan coverage, Xxxxxxxx shall be eligible for continuation of AutoNation's group
medical and dental coverage as set forth in the Consolidated Omnibus Budget
Reconciliation Act of 1985. As of the Effective Date, Xxxxxxxx
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will no longer be eligible to participate in the following employee benefit
programs offered by AutoNation: (i) vacation benefits; (ii) 401(k); (iii) short
term or long term disability benefits; (iv) travel and accident benefits; (v) or
life or dependent life insurance.
(c) Xxxxxxxx has been granted options to purchase a total of
1,000,000 shares of common stock under AutoNation's various Stock Option Plans,
none of which have previously vested. All of Xxxxxxxx'x options shall be
cancelled as of the Effective Date.
3. COOPERATION; RECORDS; CONFIDENTIALITY. During the period commencing
the Effective Date and ending on December 15, 2001 (the "Severance Period"),
Xxxxxxxx agrees to make himself available to AutoNation and its officers for
consultation on a reasonable basis from time to time as to any and all matters
which he worked on while an officer of AutoNation, provided that AutoNation
shall reimburse Xxxxxxxx for his reasonable expenses incurred in providing such
consultation and making himself available, including attorney's fees and costs,
if necessary (e.g., if Xxxxxxxx is required to be deposed as a witness in any
litigation involving AutoNation). AutoNation acknowledges that Xxxxxxxx may
engage in other full-time employment and AutoNation agrees that it will use its
best efforts to attempt to minimize the amount of time which it shall require of
him. Xxxxxxxx agrees that all confidential records, files and documents of
AutoNation shall remain in AutoNation's possession and that he shall not remove
any of the same from AutoNation's premises, without the prior written consent of
AutoNation. At all times hereafter, Xxxxxxxx agrees to maintain the
confidentiality of all proprietary, secret, confidential and other non-public
information concerning AutoNation, including any management, sales, promotional
or marketing plans, programs, or strategies, any expansion plans in existing or
new markets or for new or expanded products, services or lines of business, and
any financial statements, monthly operating reports, budgets, projections and
other financial information. Neither Xxxxxxxx nor AutoNation shall publicly
disclose the contents of this Agreement, except to the extent required under
applicable law.
4. NO RIGHT TO GIVE INTERVIEWS OR WRITE BOOKS, ETC. During the
Severance Period, except as authorized by AutoNation, Xxxxxxxx shall not give
any interviews or speeches primarily concerning AutoNation, nor shall Xxxxxxxx,
directly or indirectly, prepare or assist any person or entity in the
preparation of any books, articles, television or motion picture productions or
other creations concerning AutoNation, including any material concerning any
person, whether or not fictional, whom any member of the public might associate
with AutoNation (regardless of whether or not there shall appear any disclaimer
purporting to disassociate such fictitious person from AutoNation).
Notwithstanding the foregoing, Xxxxxxxx may publicly state factual information
about his employment with AutoNation in providing others with background and
resume information about himself, in public filings with the SEC when required
with respect to other issuers for which such disclosure about him is required,
and in similar contexts, in all cases consistent with the information set forth
in the press release referred to in paragraph 9 below. During the Severance
Period and thereafter, Xxxxxxxx agrees that he shall not, in any communications
with any third party, criticize, ridicule or make any statement which disparages
or is derogatory of AutoNation or any of AutoNation's affiliates or any of its
or their officers, directors, agents or employees, and AutoNation agrees that
it, its officers and directors shall not, in any communications with any third
party, criticize, ridicule or make any statement which disparages or is
derogatory of Xxxxxxxx.
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5. FULL SATISFACTION AND RELEASES. The parties agree that, except as
otherwise provided in this Agreement, this Agreement xxxxxx all relationships
between them and shall act as a mutual release of all claims of any nature which
one party may have against the other party as of the Effective Date, except that
the following claims shall not be released hereby: (i) claims by either party
against the other under or pursuant to this Agreement, (ii) claims by Xxxxxxxx
under applicable law in respect of statutory employment rights (such as COBRA or
ERISA claims), and (iii) claims or rights of Xxxxxxxx under law or AutoNation's
certificate of incorporation and bylaws to indemnification against third party
claims arising with respect to his service as an officer and director of
AutoNation prior to the Effective Date. AutoNation agrees to maintain its
existing or substantially comparable directors and officers insurance coverage
in place for at least three years following the Effective Date, and agrees to
keep the same or broader indemnification rights in place under its bylaws for at
least five years following the Effective Date, to the extent allowed by
applicable law.
6. SEC FILING. AutoNation will prepare a Form 4 for Xxxxxxxx to file on
a timely basis with the Securities and Exchange Commission reporting that he is
no longer an executive officer of AutoNation as of the Effective Date. After the
Effective Date, AutoNation shall cease to refer to or include Xxxxxxxx as an
executive officer in any of its SEC filings or press releases.
7. PRESS RELEASE. Xxxxxxxx and AutoNation shall mutually agree on the
text of any press release to be issued by AutoNation to announce the termination
of his employment with AutoNation, but he acknowledges that AutoNation shall
have final control over the timing of such press release.
8. NON-COMPETE AND NON-SOLICITATION. Xxxxxxxx agrees that during the
Severance Period, except with the prior written consent of AutoNation, Xxxxxxxx
shall not, directly or indirectly (whether individually or as a partner, joint
venturer, officer, director, employee, consultant, agent, independent contractor
or stockholder of or lender to any company or business entity or otherwise), for
any reason:
(a) engage in the automotive retail or rental consumer business in any
market in the United States, franchised automotive dealerships, used vehicle
dealerships, collision repair, Internet or other e-commerce businesses which
sell or which have as a primary purpose the generation of sales leads (i.e.
Autobytel, Autoweb) to sell retail vehicles, or vehicle rental businesses
(collectively, the "Automotive Business"); or
(b) request, advise or induce any material customer or material vendor
of the AutoNation Group to withdraw, curtail or cancel any such customer's or
vendor's business with the AutoNation Group; or
(c) (i) without the prior written consent of AutoNation, which consent
will not be unreasonably withheld, solicit for employment, or knowingly permit
any company or business directly or indirectly controlled by or affiliated with
him to solicit for employment, any person who is employed by AutoNation, in Fort
Lauderdale, Florida or in any manner seek to induce any such person to leave his
or her employment with AutoNation, or (ii) employ, or permit any
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company or business directly or indirectly controlled by or affiliated with him
to employ, any person who is employed by AutoNation in Fort Lauderdale, Florida
or who was so employed within one year prior to that time, provided, however,
that Xxxxxxxx, or any company or business directly or indirectly controlled by
him, may employ any person at any time after such person has been terminated
(with or without cause) by AutoNation.
9. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
It supersedes all prior negotiations, letters, agreements and understandings
relating to the subject matter hereof.
(b) CHOICE OF LAW. This Agreement will be interpreted, construed and
enforced in accordance with the laws of the State of Florida.
(c) EFFECT OF WAIVER. The failure of any party at any time or times
to require performance of any provision of this Agreement will in no manner
affect the right to enforce the same. The waiver by any party of any breach of
any provision of this Agreement will not be construed to be a waiver by any such
party of any succeeding breach of that provision or a waiver by such party of
any breach of any other provision.
(d) SEVERABILITY. The invalidity, illegality or unenforceability of
any provision or provisions of this Agreement will not affect any other
provision of this Agreement, which will remain in full force and effect, nor
will the invalidity, illegality or unenforceability of a portion of any
provision of this Agreement affect the balance of such provision. In the event
that any one or more of the provisions contained in this Agreement or any
portion thereof shall for any reason beheld to be invalid, illegal or
unenforceable in any respect, this Agreement shall be reformed, construed an
enforced as if such invalid, illegal or unenforceable provision had never been
contained herein.
(e) EXCLUSIVE VENUE AND JURISDICTION. Any suit, action or proceeding
with respect to this Agreement shall be brought in the courts of Broward County
in the State of Florida or in the U.S. District Court for the Southern District
of Florida. The parties hereto hereby accept the exclusive jurisdiction of those
courts for the purpose of any such suit, action or proceeding.
(f) BINDING NATURE. This Agreement will be binding upon the parties
and will inure to the benefit of any successor or successors of AutoNation. This
Agreement is not assignable by Xxxxxxxx.
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
(h) NOTICES. All notices which either party shall be required or
permitted to make
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or give under this Agreement shall be in writing and shall be sufficiently made
or given if sent by personally delivery, by certified mail, return receipt
requested or by nationally recognized overnight courier service, addressed as
set forth below, unless a notice of a change of address has been previously
given in accordance with the foregoing:
If to Xxxxxxxx: Xxxx X. Xxxxxxxx
0000 Xxx Xxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
If to AutoNation: AutoNation, Inc.
000 X.X. 0xx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attn: Chairman
With a copy to: AutoNation, Inc.
000 X.X. 0xx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attn: General Counsel
(i) ARM'S LENGTH NEGOTIATIONS. Each party herein expressly
represents and warrants to the other that (a) before executing this Agreement,
said party has fully informed itself of the terms, contents, conditions and
effects of this Agreement; (b) said party has relied solely and completely upon
its own judgment in executing this Agreement; (c) said party has had the
opportunity to seek and has obtained the advice of its own counsel before
executing this Agreement; (d) said party has acted voluntarily and of its own
free will in executing this Agreement; (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement; and (f) this
Agreement is the result of arm's length negotiations conducted by and among the
parties and their respective counsel.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
AUTONATION, INC.
By: /s/ H. Xxxxx Xxxxxxxx
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H. Xxxxx Xxxxxxxx
Chairman
/s/ XXXX X. XXXXXXXX
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XXXX X. XXXXXXXX
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