Contract
Exhibit 10.5
This Agreement is entered into as of January 1, 2014 (the “Effective Date”) between Xxxxxx Automotive Group, Inc. (“Xxxxxx”) and Xxxxx Style (“Executive”), a key employee of Xxxxxx, in order to provide for an agreed-upon compensation in the event that Executive’s employment is terminated following a Change in Control as defined in this agreement.
1. Severance Pay Arrangement
If a Termination (as defined below) of Executive’s employment occurs at any time during Executive’s employment, Xxxxxx will pay Executive 12 months of Executive’s base salary as of the date of Termination as Severance Pay (as such term is defined in this agreement). The Severance Pay will be subject to required withholding and will be made by Xxxxxx to Executive monthly over the course of 12 months on the regular payroll dates beginning on the first regular payroll date after Executive executes the release referenced in Section B below.
If Executive participates in a bonus compensation plan at the date of Termination, Xxxxxx shall pay Executive a pro rata bonus for the year of the Termination equal to the amount of the bonus that Executive would have received if Executive’s employment had not been terminated during such year, multiplied by the percentage of such year that has expired through the date of Termination. Such bonus shall be paid at such time as bonuses are paid under the bonus compensation plan to Xxxxxx’x other employees whose employment was not terminated in such year.
In addition, for 12 months following the date of Termination, Executive shall be entitled to continue to participate at the same level of coverage and Executive contribution in any health and dental insurance plans, as may be amended from time to time, in which Executive was participating immediately prior to the date of Termination. Such participation will terminate 30 days after Executive has obtained other employment under which Executive is covered by equal benefits. The Executive agrees to notify Xxxxxx promptly upon obtaining such other employment. At the end of 12 months, Executive, at his option, may elect to obtain COBRA coverage in accordance with the terms and conditions of applicable law and Xxxxxx’x standard policy.
Notwithstanding anything herein to the contrary, if Executive is determined to be a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended the (“Code”) and if one or more of the payments or benefits to be received by Executive pursuant to this Agreement would be considered deferred compensation subject to Section 409A of the Code, then no such payment shall be made or benefit provided until six (6) months following Executive’s date of Termination.
2. Definitions of Change of Control and Termination Triggering Severance Pay
Severance Pay will be paid to Executive by Xxxxxx if a “Termination” occurs at any time in the two years following a “Change of Control” of Xxxxxx.
A “Termination” triggering the Severance Pay set forth above in Section 1 is defined as a termination of Executive’s employment with Xxxxxx (1) by Xxxxxx without “cause”, or (2) by Executive because of (x) a material change in the geographic location at which the Executive must perform Executive’s services (which shall in no event include a relocation of Executive’s current principal place of business to a location less than 50 miles away), (y) a material diminution in Executive’s base compensation, or (z) a material diminution in Executive’s authority, duties, or responsibilities. For avoidance of doubt, a “Termination” shall not include
Exhibit 10.5
a termination of Executive’s employment by Xxxxxx for “cause” or due to Executive’s, death, disability, retirement or voluntary resignation.
For the purposes of this Agreement, the definition of “cause” is: (a) Executive’s gross negligence or serious misconduct (including, without limitation, any criminal, fraudulent or dishonest conduct) that is or may be injurious to Xxxxxx; or (b) Executive’s being convicted of, or entering a plea of nolo contendere to, any crime that constitutes a felony or involves moral turpitude; or (c) Executive’s breach of Sections 3, 4 or 5 below; or (d) Executive’s willful and continued failure to perform Executive’s duties on behalf of Xxxxxx; or (e) Executive’s material breach of a written policy of Xxxxxx. For purposes of this Agreement, the definition of “disability” is a physical or mental disability or infirmity that prevents the performance by Executive of his duties lasting (or likely to last, based on competent medical evidence presented to Xxxxxx) for a continuous period of six months or longer.
“Change of Control” means:
(A) any Person (as defined below) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-five percent (35%) or more of the combined voting power of the then outstanding voting securities of Xxxxxx entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions of Outstanding Company Voting Securities shall not constitute a Change of Control: (x) any acquisition by Xxxxxx or any subsidiary, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Xxxxxx or any subsidiary; or (z) any acquisition by a Person that is permitted to, and actually does, report its beneficial ownership on Schedule 13G promulgated under the Exchange Act (or any successor schedule); provided that, if such Person subsequently becomes required to or does report its beneficial ownership on Schedule 13D promulgated under the Securities Exchange Act of 1934, as amended (or any successor schedule), and at the time has beneficial ownership of 35% or more of the Outstanding Company Voting Securities, then a Change of Control shall be deemed to occur at such time;
(B) consummation of a merger, consolidation or other business combination transaction involving Xxxxxx with any other corporation or other entity in which the voting securities of Xxxxxx outstanding immediately prior to such merger, consolidation or other business combination transaction represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) less than 50% of the combined voting power of the securities of Xxxxxx or such surviving entity or any parent thereof outstanding immediately after such merger, consolidation or other business combination transaction, excluding any such merger, consolidation or other business combination transaction for which provision is made in the definitive agreement providing therefor that members of the Board at the time of the first public announcement of any such transaction, or any tender or exchange offer that results in any such transaction, will constitute at least a majority of the directors of the ultimate parent entity resulting from such transaction;
(C) individuals who, as of March 13, 2012, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to such date whose election, or nomination for election by Xxxxxx’x stockholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person (including by reason of any agreement intended to avoid or settle any election contest or solicitation of proxies or consents) other than the Board; or
Exhibit 10.5
(D) approval by the stockholders of Xxxxxx of a complete liquidation or dissolution of Xxxxxx.
Notwithstanding the foregoing, no Change of Control shall be deemed to have occurred for purposes of this Agreement by reason of any actions or events in which Executive participates in any capacity other than in his capacity as an officer or employee of Xxxxxx that results in or has the effect of a leveraged buyout of Xxxxxx.
For the purposes of the “Change of Control” definition, the defined term “Person” shall mean a natural person, company, government, or political subdivision, agency or instrumentality of a government, except that such term shall not include (i) Xxxxxx or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Xxxxxx or any of its affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of Xxxxxx in substantially the same proportions as their ownership of stock of Xxxxxx.
3. Confidential Information and Nondisclosure Provision
As a condition to the receipt of the Severance Pay payments and benefits described in Section 1 above, during and after employment with Xxxxxx, Executive shall agree not to disclose to any person (other than to an employee or director of Xxxxxx, or to Xxxxxx’x attorneys, accountants and other advisors or except as may be required by law) and not use to compete with Xxxxxx any confidential or proprietary information, knowledge or data that is not in the public domain that was obtained by Executive while employed by Xxxxxx regarding Xxxxxx or any products, improvements, customers, methods of distribution, sales, prices, profits, costs, contracts, suppliers, business prospects, business methods, techniques, research, trade secrets or know-how of Xxxxxx (collectively, “Confidential Information”). In the event that Executive’s employment terminates for any reason, Executive will deliver to Xxxxxx on or before the date of Termination all documents and data of any nature pertaining to Executive’s work with Xxxxxx and will not take any documents or data or any reproduction, or any documents containing or pertaining to any Confidential Information. Executive agrees that in the event of a breach by Executive of this provision, Xxxxxx shall be entitled to inform all potential or new employers of such breach and to cease payments and benefits that would otherwise be made pursuant to Section 1 above, as well as to obtain injunctive relief and damages, including reasonable attorneys fees, and which may include recovery of amounts paid to Executive under this Agreement.
4. Non-Solicitation/Non-Hire of Employees
Executive agrees that during his employment at Xxxxxx and for a 12-month period after the date of Termination, he will not, directly or indirectly, solicit, recruit or hire any employee of Xxxxxx (or any person who was an employee of Xxxxxx during the 12 month period preceding Executive’s date of Termination) or encourage any such employee to terminate employment with Xxxxxx.
5. Covenant Not to Compete
Executive agrees that during his employment at Xxxxxx and for a 12-month period after the date of Termination, he will not (except on behalf of or with the prior written consent of Xxxxxx, which consent may be withheld in Xxxxxx’x sole discretion):
(a) provide services of a leadership, management, executive, operational, or advisory capacity and/or participate in the ownership of or provide financial backing to an automotive dealership that is located within a fifty-mile radius of any address set forth on Exhibit A (the “Area”);
Exhibit 10.5
(b) provide senior/corporate level leadership, executive, operational, or advisory services to any corporate competitor of Xxxxxx who owns or operates one or more automotive dealerships within the Area; and
(c) provide services of a leadership, management, executive, operational, or advisory capacity for anyone or any business whose focus is buying, conglomerating, or otherwise acquiring one or more automotive dealerships that are located within the Area.
For purposes of this Section 5, Executive acknowledges and agrees that Xxxxxx conducts business in the Area and that the Area is a reasonable geographic limitation.
Notwithstanding anything to the contrary contained in this Agreement, Xxxxxx hereby agrees that the foregoing covenant shall not be deemed breached as a result of the passive ownership by Executive of: (i) less than an aggregate of 5% of any class of stock of a business that competes with Xxxxxx; or (ii) less than an aggregate of 10% in value of any instrument of indebtedness of a business that competes with Xxxxxx. The Company further agrees that nothing in this Section 5 prohibits Executive from accepting employment from, and performing services for, businesses engaged in the finance industry, and businesses engaged in the manufacturing and/or sale of automobile parts or the provision of automotive service, provided such businesses do not also engage in the retail of automobiles within the Area. By way of example, nothing in this Section 5 would prohibit Executive from working with such businesses as American General Finance, NAPA Auto Parts, or Goodyear.
Upon Executive’s Termination of employment with Xxxxxx, Executive agrees to re-confirm his commitment to the post-employment restrictive covenants in this Agreement. Executive further agrees that as part of that re-confirmation, the term “Area” and Exhibit A hereto may be amended by Xxxxxx, but only to the extent necessary to list the addresses of Xxxxxx’x headquarters and any automotive dealerships that Xxxxxx owns and/or operates as of the Termination Date.
6. Construction/Enforcement of Post-Employment Covenants.
Executive agrees that the provisions of Sections 3, 4, and 5 are reasonable and properly required for the adequate protection of the business and the goodwill of Xxxxxx. However, if a judicial determination is made that any of the provisions of Sections 4, 5 or 6 constitutes an unreasonable or otherwise unenforceable restriction against Executive, such provision(s) shall be modified or severed so as to permit enforcement of the provision(s) to the extent reasonable.
7. Violation of Post-Employment Covenants.
If Executive breaches any provision in Sections 3, 4, and 5, Executive understands and agrees that Xxxxxx may stop paying any additional severance pursuant to Section 1 until such time as any dispute over Executive’s alleged breaches of Sections 3, 4 and 5 have been resolved, either judicially or otherwise. Executive agrees that in the event of an alleged breach by Executive of any of provision in Sections 3, 4 or 5, Xxxxxx shall be entitled to cease payments and benefits that would otherwise be made pursuant to Section 1 above, as well as to obtain injunctive relief and damages which may include recovery of amounts paid to Executive under this Agreement and attorneys' fees and costs incurred by Xxxxxx in enforcing any covenants. To the extent that Executive is determined through agreement or resolution of any pending claim to not have violated any covenant at issue, he shall receive any and all severance that has not been paid under the Agreement and/or which was recovered from Executive under this Section 7.
Exhibit 10.5
GENERAL PROVISIONS
A. Employment is At Will
Executive and Xxxxxx acknowledge and agree that Executive is an “at will” employee, which means that either Executive or Xxxxxx may terminate the employment relationship at any time, for any reason, with or without cause or notice, and that nothing in this Agreement shall be construed as an express or implied contract of employment.
B. Execution of Release
As a condition to the receipt of the Severance Pay payments and benefits described in Section 1 above, Executive agrees to execute a release of all claims arising out of Executive’s employment or Termination, including, but not limited to, any claim of discrimination, harassment or wrongful discharge under local, state or federal law.
C. Alternative Dispute Resolution
Any disputes arising under or in connection with this Agreement shall be resolved by binding arbitration before an arbitrator (who shall be an attorney with at least ten years’ experience in employment law) in the city where Executive is located and in accordance with the rules and procedures of the American Arbitration Association. Each party may choose to retain legal counsel and shall pay its own attorneys’ fees, regardless of the outcome of the arbitration. Executive may be required to pay a filing fee limited to the equivalent cost of filing in the court of jurisdiction. The Company will pay the fees and costs of conducting the arbitration. Judgment upon the award rendered by the arbitrator may be entered in any court of jurisdiction.
D. Other Provisions
(a) This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of Executive and Xxxxxx, including any successor to Xxxxxx.
(b) The provisions of Sections 3, 4 and 5 shall survive the termination of this Agreement.
(c) The headings and captions are provided for reference and convenience only and shall not be considered part of this Agreement.
(d) Any notice or other communication required or permitted to be delivered under this Agreement shall be (i) in writing, (ii) delivered personally, by nationally recognized overnight courier service or by certified or registered mail, first-class postage prepaid and return receipt requested, (iii) deemed to have been received on the date of delivery or on the third business day after mailing, and (iv) addressed as follows (or to such other address as the party entitled to notice shall later designate in accordance with these terms):
If to Xxxxxx: Xxxxxx Automotive Group, Inc.
c/o The Office of the General Counsel
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
If to Executive: To the most recent address of Executive set forth in the personnel records of Xxxxxx.
Exhibit 10.5
(e) This Agreement supersedes any and all agreements between Xxxxxx and Executive relating to payments upon Termination of employment or Severance Pay and may only be modified in a writing signed by Xxxxxx and Executive.
(f) This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia.
(g) All payments hereunder shall be subject to any required withholding of federal, state, local and foreign taxes pursuant to any applicable law or regulation.
(h) If any provision of this Agreement shall be held invalid or unenforceable, such holding shall not affect any other provisions, and this Agreement shall be construed and enforced as if such provisions had not been included. No provision of this Agreement shall be waived unless the waiver is agreed to in writing and signed by Executive and the Chief Human Resources Officer of Xxxxxx. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(i) The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder. Notwithstanding any provision of this Agreement to the contrary, in the event that Xxxxxx determines that any amounts payable hereunder will be immediately taxable to Executive under Section 409A of the Code and related Department of Treasury guidance, Xxxxxx and Executive shall cooperate in good faith to (x) adopt such amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that they mutually determine to be necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement and to avoid less favorable accounting or tax consequences for Xxxxxx and/or (y) take such other actions as mutually determined to be necessary or appropriate to exempt the amounts payable hereunder from Section 409A of the Code or to comply with the requirements of Section 409A of the Code and thereby avoid the application of penalty taxes thereunder.
[Remainder of Page Intentionally Left Blank]
Exhibit 10.5
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
BY EXECUTIVE: | BY COMPANY: | |||
XXXXXX AUTOMOTIVE GROUP, INC. | ||||
_________________________ | _____________________________ | |||
Xxxxx Style | Xxxxxx X. Xxxxxx, Xx. | |||
VP, Chief Human Resources Officer | ||||
Date:_____________________ | Date:_____________________ | |||
Exhibit 10.5
Exhibit A
As used in the Severance Pay Agreement, “Area” means a 50-mile radius from any of the following addresses:
Corporate Headquarters
0000 Xxxxxxxx Xxxxxxx XX
Xxxxxx, XX 00000
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
0000 X. Xxxxxxxx Xxx.
Xxxxxxxxxx, XX 00000
0000 Xxxxxxxxxx Xxxx Xxxx Xxxx
Xxxxxx, XX 00000
0000 X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
00000 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
0000 X. Xxxxx Xx
Xxxxxxxx, XX 00000
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxxxxxx, XX 00000
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
000 X. XxXxxxxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Exhibit 10.5
0000 X Xxxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
0000 XX Xxxxxxx 0
Xxxxxxxxx, XX 00000
00000 Xxxxxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000
00000 Xxxxxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000
00000 Xxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
00000 Xxxxxxx Xxx
Xxxxxxxxxxxx XX 00000
00000 Xxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000
00000 Xxxxx Xxxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
0000 X. Xxxxxxx Xxx
Xxxxxx Xxxx, XX 00000-0000
0000 X. Xxxxxxx Xxx
Xxxxxx Xxxx, XX 00000-0000
0000 X. Xxxxxxxx Xxxx
Xxxxxx, XX 00000-0000
0000 XX 0 Xxxxx
Xx. Xxxxxx, XX 00000
0000 XX 0 Xxxxx
Xx. Xxxxxx, XX 00000
0000 XX 0 Xxxxx
Xx. Xxxxxx, XX 00000
5400 South US Highway 1
Exhibit 10.5
Xxxx Xxxxxx, XX 00000-0000
0000 XX Xxxxxxx 0 X
Xx Xxxxxxxxx, XX 00000
0000 Xxxxx Xxxxx
Xxxxx, XX 00000
0000 X. Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
0000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
0000 X. Xxxx Xxxxx Xxx
Xxxxx, XX 00000
0000 X. Xxxx Xxxxx Xxx.
Xxxxx, XX 00000
0000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
00000 XX Xxxxxxx 00X
Xxxx Xxxxxx, XX 00000
0000 Xxxxx Xx
Xxxxx, XX 00000
0000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
0000 Xxxxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
0000 Xxxx Xxxxxxx XX
Xxxxxx, XX 00000
000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
00000 Xxxxxxxxxx XXX.
Xxxxxxx, XX 00000
00000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Exhibit 10.5
00000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
0000 Xxxx Xxxxxxx X.
Xxxxxxxx, XX 00000
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
00000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
0000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000
0000 Xxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
0000 Xxxx Xxxxx Xxxxxxx
Xxxxx, XX 00000
00000 XX Xxxxxxx 000 Xxxxx
Xxxxxx, XX 00000
00000 Xxxx Xxxxxxx
Xxxxxxx, XX 00000
00000 Xxxx Xxxxxxx
Xxxxxxx, XX 00000
0000 X. Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
0000 Xxxxxxx Xxxx
Xxxxx Xxxxxx Xxxx, XX 00000-0000
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Exhibit 10.5
0000 Xxxxxxx Xxxx
Xxxxx Xxxxxx Xxxx, XX 00000
0000 X. Xxxxxxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
#0 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
0000 Xxxxxxx Xxxx
Xxxxx Xxxxxx Xxxx, XX 00000
000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
0000 X-00 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
000 Xxxx-Xxxxxxx Xxxx
Xxxxxxx, XX 00000
000 Xxxx-Xxxxxxx Xxxx
Xxxxxxx, XX 00000
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
0000 X-00 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
000 X. Xxx Xxxxxx
Xxxxx Xxxxx, XX 00000
00000 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000
00000 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000
000 Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
00000 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
0000 Xxxxxxx Xxxx
Exhibit 10.5
Xxxxxxxxxx, XX 00000
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
000 Xxxxxxxxxx Xx.
X’Xxxxxx, XX 00000
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
