Exhibit 10.2
XXXXXX AUTOMOTIVE ARKANSAS, L.L.C.
March 21, 2005
Xxxxxx X. XxXxxxx, III
0000 Xxxxxxxxxxxx Xxxxxx XX
Xxxxx 000
Xxxxxxxxxx X.X. 00000
Dear Xx. XxXxxxx:
We are pleased that you have agreed to provide your services to Xxxxxx
Automotive Arkansas L.L.C. (the "Company") in the capacity as Chairman. This
Letter Agreement sets forth the agreed upon amendments and modifications to the
existing employment and consulting agreement among you, XxXxxxx Companies, Inc.
("XxXxxxx Companies"), Xxxxxx Automotive Group L.L.C. ("Xxxxxx Group") and the
Company (collectively, "the parties") dated May 1, 2002 (the "May 2002
Agreement"). The modifications and amendments to the May 2002 Agreement as set
forth in this Letter Agreement shall be deemed effective February 1, 2005.
1. Satisfaction of Obligations under May 2002 Agreement. The Company
agrees to pay you, and you agree to accept the sum of, $1,300,000 (1), which
amount you agree satisfies any and all monetary and non-monetary obligations the
Company (or any parent, affiliate or subsidiary thereof) and Xxxxxx Group may
owe you (individually or in your capacity as a consultant) or XxXxxxx Companies
under the terms of the original May 2002 Agreement, said payment to be made on
or before March 31 , 2005. All authorized deductions required or permitted by
state and federal law shall be deducted from the payment made to you under this
Paragraph 1.
2. Termination of Consulting Services Agreement. In further
consideration of the payment set forth in Paragraph 1 above, you, acting in your
individual capacity and on behalf of XxXxxxx Companies as its duly authorized
agent, hereby agree that any and all agreements between yourself, XxXxxxx
Companies and Xxxxxx Group, including but not limited to Xxxxxx Group's
agreement to retain the consulting services of yourself and XxXxxxx Companies,
whether written, oral or otherwise, are hereby null, void and of no further
legal effect. The parties agree that all references to consulting services,
consulting fees, consulting agreements, the "Xxxxxx Services", the "Xxxxxx
Term", the "Xxxxxx Board", the "Xxxxxx Consulting Fee", "Consulting Fees" or
"Consulting Firm's Fees", the "Consulting Firm" and the "Xxxxxx Arrangements" in
the original May 2002 Agreement are stricken and deleted in their entirety.
3. Title; Parties to the Agreement. The May 2002 Agreement shall be
renamed "Employment Agreement". In addition, effective February 1, 2005 XxXxxxx
Companies and Xxxxxx Group shall no longer be considered parties to the May 2002
Agreement.
4. Term; Services to be Provided. The parties agree that Paragraph 2 of
the original May 2002 Agreement is deleted in its entirety and replaced with the
following:
2(a). Term of Employment. The Employment Agreement shall
commence as of February 1, 2005 (the "Effective Date"), and shall remain in
effect until the fifth anniversary of the Effective Date (the "Term") unless
sooner terminated pursuant to the provisions of Section 6 hereof.
2(b). Position and Duties. During the Term, XxXxxxx will be
employed by the Company in the position of Chairman. As Chairman, XxXxxxx will
be expected to provide general advice regarding the operations of the Company,
as well as such additional responsibilities as may be assigned from time to time
consisitent with the position of Chairman as described herein (hereinafter,
"Company Services"). XxXxxxx agrees and recognizes that, in his capacity as
Chairman, he is not an officer or director of the Company and has no independent
authority to conduct business on behalf of or to enter into any agreement that
may be legally binding on the Company or any of its parents, affiliates or
subsidiaries. Notwithstanding the foregoing, the terms of XxXxxxx'x employment
will not require him to spend any period of time in excess of three days away
from the businesses operated or owned by the Company other than in connection
with incidental or routine trips. In his position as Chairman, XxXxxxx agrees to
devote all such skill, knowledge and working time as reasonably required to
carry out his obligations under this agreement, which the parties acknowledge
shall not constitute full-time employment.
5. Compensation and Consulting Fees. The parties agree that Paragraph 3
of the original May 2002 Agreement is deleted in its entirety and replaced with
the following:
3. Compensation. During the Term, the Company shall pay
XxXxxxx an annual salary in the amount of $100,000.00 ("Company Salary"). All
authorized deductions required or permitted by state and federal law shall be
deducted from all payments made to you under this Paragraph 3. In addition, all
payments made under this Paragraph 3 shall be paid in accordance with the
Company's normal payroll procedures. The parties agree that, other than the
compensation set forth in this Paragraph 3, no further compensation shall be
paid to you during the Employment Term.
6. Benefits. The parties agree that Paragraph 4 of the original May
2002 Agreement shall be deleted in its entirety and replaced with the following:
4. Benefits. During the Term:
(a) XxXxxxx shall be entitled to participate in all
life insurance, medical insurance, disability insurance and other benefits that
may be provided to Company employees from time to time, subject to the terms
and eligibility requirements of the controlling plan(s) document(s)
(b) The Company agrees to pay you a total of
$3,300.00 per month as reimbursement for all lease, rent, utilities and common
area and maintenance expenses, and any and all other miscellaneous office
expenses, relating to your office space.
(c) The Company will permit you to hire and/or retain
one (1) executive assistant. The Company agrees to pay a total base salary of
approximately $30,000 for this position, plus all benefits that similar
full-time employees of the Company may be eligible to receive and/or
participate in, subject to the terms and eligibility requirements of the
controlling benefit plan(s) document(s).
(d) The Company agrees to continue to pay the monthly
leasing costs associated with the two (2) leased vehicles, provided, however,
that XxXxxxx shall be responsible for insuring these vehicles.
7. Expenses. The parties agree that Paragraph 5(b) of the original
May 2002 Agreement shall be deleted in its entirety.
8. Termination of Agreement. The parties agree to the following
amendments to Paragraph 6 of the original May 2002 Agreement:
a. Termination for Cause. The parties agree that Paragraph
6(b)(ii) of the original May 2002 Agreement shall be deleted in its entirety.
b. Termination Without Cause. The parties agree that Paragraph
6(c)(ii) of the original May 2002 Agreement shall be deleted in its entirety.
c. Termination by XxXxxxx. The parties agree that Paragraph
6(d)(ii) of the original May 2002 Agreement shall be deleted in its entirety.
d. Payments Upon Certain Terminations of the Provision of
Company Services. The parties agree that Paragraph 6(f)(ii) of the original May
2002 Agreement is deleted in its entirety, provided, however, that in the event
of your death or disability as set forth in Paragraph 6(a) of the original May
2002 Agreement, the Company agrees to pay you your full base salary through the
Date of Termination.
e. Payments Upon Certain Terminations of the Provision of
Xxxxxx Services. The parties agree that Paragraph 6(g) of the original May 2002
Agreement shall be deleted in its entirety.
9. Covenant Not to Compete. The parties agree that Paragraph 7 of the
original May 2002 Agreement shall be deleted in its entirety and replaced with
the following:
7. Covenant Not to Compete. (a) So long as XxXxxxx'x
employment hereunder shall continue, or as otherwise expressly consented to,
approved or otherwise permitted by the Company in writing, and to the fullest
extent permitted under applicable law, XxXxxxx shall not, directly or indirectly
engage in, participate in, represent in any way or be connected with, as an
officer, director, partner, owner, employee, agent, independent contractor,
consultant, proprietor or stockholder (except for the ownership of a less than
5% stock interest in a publicly traded corporation) or otherwise (the
"Restricted Activities"), any business similar to the Business (as defined in
the Exchange Agreement, dated as of August 4, 1998 (as amended by Amendment No.
1, dated as of February 23, 1999, among XxXxxxx, the Company and the other
persons named therein ("the Exchange Agreement")) within 80 miles of any retail
motor vehicle dealership currently owned by the Company within the State of
Arkansas, competing with the Business.
(b) Upon the termination of XxXxxxx'x employment, the
following provisions shall apply:
(i) In the event XxXxxxx'x employment is terminated pursuant
to Sections 6(c) or 6(d) of this Agreement and the severance provisions of
Section 6(f)(i) apply, the provisions of Section 7(a) shall continue in effect
from the Date of Termination through the remainder of the Term; provided,
however, that in the event that XxXxxxx waives his right to receive severance
payment pursuant to Section 6(f)(i), the Provisions of section 7(a) shall
terminate upon the Date of Termination.
(ii) In the event XxXxxxx'x employment is terminated by the
Company pursuant to Section 6(b) of this Agreement, or XxXxxxx terminates his
employment with the Company without Good Reason (as defined in Section 6(d)(iii)
above), the provisions of Section 7(a) shall continue in effect for a period of
one (1) year following the Date of Termination.
(iii) In the event XxXxxxx'x employment terminates due to the
expiration of this Agreement, the provisions of Section 7(a) shall no longer
apply as of the date XxXxxxx actually stops performing services for the Company.
(iv) In the event Sections 7(b)(i) or 7(b)(ii) are triggered
by the termination of XxXxxxx'x employment with the Company, XxXxxxx agrees to
disclose in writing to the Company the name, address and type of business
conducted by any proposed new employer within ten (10) business days of
commencing employment with the new employer.
10. Entire Agreement, Amendment and Assignment. The original May 2002
Agreement, as modified and amended by this Letter Agreement, constitutes the
sole agreement between XxXxxxx and the Company and supersedes all prior
agreements and understandings with respect thereto, whether oral or written. No
modification to any provision of the original May 2002 Agreement or this Letter
Agreement shall be binding unless in writing and signed by both you and the
Company, and agreed to in writing by the Chief Executive Officer of Xxxxxx
Group. No waiver of any rights under the original May 2002 Agreement or this
Letter Agreement will be effective unless in writing signed by the party to be
charged. All of the terms and provisions of the original May 2002 Agreement and
this Letter Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, executors, administrators, legal
representatives, successors and assigns of the parties hereto. You further agree
and recognize that your duties and responsibilities are of a personal nature
and, therefore, cannot in any respect be assigned or delegated.
If the terms as set forth above are acceptable to you, please sign in
the space provided below and return the original to Xxxx Xxxxxxx, Vice
President, Human Resources at the above-referenced address. Please retain a copy
for your records. If you have any questions regarding the terms and conditions
set forth herein, please do not hesitate to contact Xx. Xxxxxxx.
Sincerely,
XXXXXX AUTOMOTIVE ARKANSAS L.L.C.
/s/ J. Xxxxxx Xxxxx
----------------------------
By: J. Xxxxxx Xxxxx
Title: Vice President
Dated: March 21, 2005
Agreed and accepted, this 21st day of March 2005,
XXXXXX AUTOMOTIVE GROUP L.L.C.
/s/ Xxxxxxx X. Xxxxxx
----------------------------
By: Xxxxxxx X. Xxxxxx
Title:President and CEO
Dated: March 21, 2005
Agreed and accepted, this 21st day of March 2005,
XXXXXXX COMPANIES, INC.
----------------------------
By: Xxxxxx X. XxXxxxx, III
Title:
Dated: March 21, 2005
Agreed and accepted, this 21st day of March 2005,
/s/ Xxxxxx X. XxXxxxx, III
--------------------------
Xxxxxx X. XxXxxxx, III
(1) Assumes payments under prior agreement are made through January 2005. Lump
sum payment amount will be adjusted for any monthly payments made after January
2005 that are in excess of amounts due under this agreement.
