SEVERANCE AGREEMENT
Exhibit 10.7
THIS SEVERANCE AND RELEASE AGREEMENT (“Agreement”) is made and entered into by and between
GROUP 1 AUTOMOTIVE, INC. (“Employer”) and XXXXXX XXX (“Employee”).
WHEREAS, Employee is separating from his position with Employer;
WHEREAS, Employer wishes to provide Employee with certain benefits in consideration of
Employee’s separation and the promises and covenants of Employee as contained herein, including the
Employee’s agreement to release all claims against Employer;
NOW THEREFORE, in consideration of and exchange for the promises, covenants, and releases
contained herein, the parties mutually agree as follows:
1. Separation Date. Employee’s separation from all positions he holds with Employer
shall be effective on the 31st day of December, 2005 (unless an earlier date is mutually
agreed upon by both parties), at which time all entitlement to compensation and benefits from
Employer shall cease except to the extent provided by this Agreement (“Separation Date”) or under
any employee welfare or benefit plan under which Employee has vested rights to benefits, subject to
the plan documents for such plans.
2. Effective Date. This Agreement shall be effective on the date it is executed by
Employee (“Effective Date”).
3. Severance Benefits. In further consideration for this Agreement, Employee shall be
entitled to the following benefits, which exceed the benefits to which Employee would be entitled
absent his agreement to the covenants, conditions and terms set forth in this Agreement.
A. Base Salary. If Employee remains employed through the Separation Date, Employer
shall pay Employee severance pay in the form of six (6) months of base salary in the amount of
$182,500 in the form of a lump sum payment on the Separation Date, less all customary and required
withholdings.
B. Bonus Payment. If Employee remains employed through the Separation Date, Employer
shall pay Employee a bonus for 2005 in the amount of $313,900 on the Separation Date, less all
customary and required withholdings.
C. Accrued Vacation. Employer shall pay to Employee all accrued but unused vacation
as of the Separation Date.
D. Outplacement Assistance. Employer shall provide Employee with outplacement
assistance at the Employer’s expense, through an agency of Employer’s choosing but acceptable to
Employee, for a duration that is mutually agreed by Employer and Employee.
E. Equipment. Employee shall be entitled to keep his cell phone, blackberry, laptop
computer, home printer and all home networking equipment following his separation, however,
Employee shall be responsible for all user charges incurred after the Separation Date.
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F. Vehicle. Employee shall be entitled to use the demonstrator vehicle currently
provided to him by Employer through February 28, 2006. During such period, insurance coverage
currently provided by the Employer in connection with use of demonstrator vehicles by executives of
the Employer shall continue to apply to the demonstrator vehicle used by Employee. Employee is
solely responsible for fuel, repairs and maintenance of the demonstrator vehicle. On or before
February 28, 2006, Employee shall return such demonstrator vehicle to Employer in a condition
acceptable to Employer. Employee agrees to indemnify and hold Employer harmless from any and all
loss or liability arising, directly or indirectly, from Employee’s use of the demonstrator vehicle
that is not covered by the insurance coverage referenced above.
G. Condition Precedent to Severance Benefits. As a condition of receiving the
severance benefits described above, Employee shall continue to conduct all “normal” CFO duties
during his employment with Employer, including with respect to the following:
| i. | 3Q financial closing and related releases / filings (e.g., News Release, Form 10-Q, etc.); | ||
| ii. | 3Q Road Show and related investor meetings; | ||
| iii. | Bank syndication, documentation, closing; | ||
| iv. | Board Meeting preparation / presentation; and | ||
| v. | 2006 Budget. |
4. Release by Employee. In exchange for the consideration provided by Employer,
Employee agrees for Employee, Employee’s heirs, agents, executors, administrators, successors and
assigns to forever release and discharge Employer and its subsidiaries, predecessor companies,
successor companies, related companies, parents, successors and assigns, owners, officers,
directors, insurers, attorneys, agents, employees and former employees from any and all claims,
debts, promises, agreements, demands, causes of action, attorneys’ fees, losses and expenses of
every nature whatsoever, known or unknown, suspected or unsuspected, filed or unfiled, arising
prior to the Effective Date of this Agreement, or arising out of or in connection with Employee’s
employment by or offer of employment by the Employer or any affiliate of the Employer. This total
release includes, but is not limited to, any and all claims arising directly or indirectly from
Employee’s employment with the Employer and the termination of that employment; claims or demands
related to salary, bonuses, commissions, vacation pay, fringe benefits and expense reimbursements
pursuant to any federal, state or local law or cause of action, including, but not limited to,
breach of contract, breach of the implied covenant of good faith and fair dealing, infliction of
emotional harm, wrongful discharge, negligence, violation of public policy, defamation and
impairment of economic opportunity; violation of the Texas Employment Discrimination or Harassment
Laws, as amended, the Texas Constitution; and any claims for violation of Title VII of the Civil
Rights Act of 1964, as amended, the Fair Labor Standards Act, the Family Medical Leave Act, and the
Americans With Disabilities Act of 1990. Notwithstanding the foregoing, or any other provision of
this Agreement, Employee retains, and does not release or waive, his rights to indemnification, and
coverage under one or more Executive and Officer’s Liability, and other, insurance polices, with
respect to claims that may be brought against him arising out or related to his employment with
Employer, or any affiliate of Employer. Nor does Employee release or waive any claims arising out
of or related to any breach by Employer of the terms of this Agreement.
5. Release by Employer. In exchange for the consideration provided by Employee,
Employer agrees for it, and its subsidiaries, predecessor companies, successor companies,
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related companies, parents, successors assigns, and owners to forever release and discharge
Employee from any and all claims, debts, promises, agreements, demands, causes of action,
attorneys’ fees, losses and expenses of every nature whatsoever, known or unknown, suspected or
unsuspected, filed or unfiled, arising prior to the Effective Date of this Agreement, or arising
out of or in connection with Employee’s employment by or with Employer or any affiliate of the
Employer.
6. Newly Discovered Facts. Employee and Employer hereby acknowledge that they may
hereafter discover facts different from or in addition to those that they now know or believe to be
true, and they expressly agree to assume the risk of the possible discovery of additional facts,
and agree that this Agreement will be and remain effective regardless of such additional or
different facts. Employer and Employee expressly agree that this Agreement shall be given full
force and effect according to each and all of its express terms and provisions, including those
relating to unknown or unsuspected claims, demands, causes of action, governmental, regulatory or
enforcement actions, charges, obligations, damages, liabilities, and attorneys’ fees and costs, if
any, as well as those relating to any other claims, demands, causes of action, obligations,
damages, liabilities, charges, and attorneys’ fees and costs specified herein.
7. Confidentiality. Employer and Employee agree that they will, to the extent
possible, keep the terms, amount and fact of this Agreement completely confidential, and that they
will not hereafter disclose any information concerning this Agreement to anyone, including the
amount of consideration paid hereunder, the facts, allegations, and/or circumstances regarding
Employee’s employment and/or Employee’s separation of employment with Employer; provided, however,
that Employer and Employee may make such disclosures as they are required to make by law or are
necessary to enforce any term of this Agreement, and may make such additional disclosures to
immediate family members, professional representatives (e.g., attorneys, accountants, auditors, tax
preparers), and prospective employers but only with respect to the circumstances regarding
Employee’s separation from employment; provided, however, that such persons be informed of and
agree to be bound by this confidentiality clause. Employee further acknowledges and agrees that
he was exposed to and/or provided with confidential information relating to Employer and Employer’s
finances, business operations, customers, and employees. Employee hereby warrants and agrees that
he will hold the Employer’s confidential information in the strictest confidence and will not
disclose, reveal, publish, distribute, use, misuse or communicate in any format any confidential,
sensitive, or proprietary information regarding Employer or Employer’s business that he acquired
and/or learned during his employment with Employer, unless required by law.
8. Covenant to Cooperate. Employee hereby acknowledges that in partial consideration
for the benefits received pursuant to this Agreement, he may be requested by the Employer to
cooperate with the Employer in the defense or prosecution of one or more existing or future court
actions, governmental investigations, arbitrations, mediations or other legal or equitable
proceedings which involve the Employer or any of its employees, officers or directors, and he
agrees to do so. This cooperation may include, but shall not be limited to, the need for or
availability for testimony in deposition, affidavit, trial, mediation or arbitration, as well as
preparation for that testimony. Employee acknowledges that he shall make himself available at the
Employer’s reasonable request for any meetings or conferences the Employer deems necessary in
preparation for the defense or prosecution of any such legal proceedings. Employer shall pay all
reasonable expenses that may be incurred by Employee (e.g., lodging and air fare) in providing such
cooperation.
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9. Employer Property. With the exception of the equipment described in Section 3 (E),
and the demonstrator vehicle described above in Section 3(F), Employee hereby represents and
warrants that on or before the Separation Date, he will return to Employer all of Employer’s
property and documents in his possession including, but not limited to, Employer’s files, notes,
records, computer recorded information, tangible property, credit cards, entry cards, keys,
identification badges, and Employer issued cell phones, pagers and other electronic devices used in
the course and scope of Employee’s employment with Employer.
10. Entire Agreement. This Agreement embodies the entire agreement of all the parties
hereto who have executed it and supersedes any and all other agreements, understandings,
negotiations, or discussions, either oral or in writing, express or implied, between the parties to
this Agreement. The parties to this Agreement each acknowledge that no representations,
inducements, promises, agreements or warranties, oral or otherwise, have been made by them, or
anyone acting on their behalf, which are not embodied in this Agreement; that they have not
executed this Agreement in reliance on any representation, inducement, promise, agreements,
warranty, fact or circumstances, not expressly set forth in this Agreement; and that no
representation, inducement, promise, agreement or warranty not contained in this Agreement
including, but not limited to, any purported settlements, modifications, waivers or terminations of
this Agreement, shall be valid or binding, unless executed in writing by all of the parties to this
Agreement. This Agreement may be amended, and any provision herein waived, but only in writing,
signed by the party against whom such an amendment or waiver is sought to be enforced.
11. Binding Nature. This Agreement, and all the terms and provisions contained
herein, shall bind the heirs, personal representatives, agents acting on behalf of Employee,
successors and assigns of each party, and inure to the benefit of each party, its agents,
directors, officers, employees, servants, successors, and assigns. The undersigned, on behalf of
the Employer, represents that he has all requisite authority and power to enter into this
Agreement.
12. Construction. This Agreement shall not be construed in favor of one party or
against the other.
13. Partial Invalidity. Should any portion, word, clause, phrase, sentence or
paragraph of this Agreement be declared void or unenforceable, such portion shall be considered
independent and severable from the remainder, the validity of which shall remain unaffected.
14. Compliance with Terms. The failure to insist upon compliance with any term,
covenant or condition contained in this Agreement shall not be deemed a waiver of that term,
covenant or condition, nor shall any waiver or relinquishment of any right or power contained in
this Agreement at any one time or more times be deemed a waiver or relinquishment of any right or
power at any other time or times.
15. Enforcement Costs. Employer and Employee agree that in the event that either
breaches any provision of this Agreement, the breaching party shall pay all reasonable costs and
attorney’s fees incurred by the other in connection with enforcement of this Agreement.
16. Governing Law and Jurisdiction. This Agreement shall be interpreted under the law
of the State of Texas, both as to interpretation and performance.
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17. Section Headings. The section and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
18. Counterparts. This Agreement may be executed in two counterparts, each of which
shall be deemed an original, all of which together shall constitute one and the same instrument.
19. No Admissions. It is understood and agreed by the parties that this Agreement
represents a compromise and settlement for various matters and that the promises and consideration
in this Agreement shall not be construed to be an admission of any liability or obligation by
either party to the other party or any other person.
20. Voluntary and Knowing. This Agreement is executed voluntarily and without any
duress, undue influence or coercion on the part or behalf of the parties hereto. Employee also
acknowledges being informed that he has the option of consulting with an attorney prior to the
execution of this Agreement. By signing below, Employee also acknowledges that he has read and
fully understands and agrees to the terms of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the respective dates set forth
below.
Dated: 12/5/05 |
GROUP 1 AUTOMOTIVE, INC. | |||||
| By: | /s/ Xxxx X. Xxxxxxxxxx | |||||
President and Chief Executive Officer |
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Dated: 12/5/05
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XXXXXX XXX | |||||
| /s/ Xxxxxx Xxx | ||||||
| (Signature) | ||||||
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