EXHIBIT 10.11
SEVERANCE AND RELEASE AGREEMENT
THIS SEVERANCE AND RELEASE AGREEMENT is made and entered into as of
the 17th day of April, 2001, to be effective as of the Effective Date (as
defined below), by and between A. XXXXXXXX XXXXX, XX. ("Xxxxx" or "Employee"),
and ALLIED HOLDINGS, INC., a Georgia corporation ("Allied" or "Company").
WHEREAS, (i) Xxxxx and Allied entered into that certain Employment
Agreement dated as of February 23, 2000 (the "Employment Agreement"), pursuant
to which Xxxxx has been the Chief Executive Officer of Allied, and
WHEREAS, the parties have agreed to compromise claims and defenses
they might assert against each other under this employment agreement and
otherwise.
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions herein contained, the receipt and sufficiency of which are hereby
acknowledged, Xxxxx and Allied agree as follows:
1. DEFINITIONS
(a) "Allied," to the extent this term is used in
relation to Xxxxx releasing claims against Allied and his
Covenant of Nondisparagement, shall include Allied's parent
or subsidiary corporations, and the officers, directors,
attorneys and employees of each.
(b) "Effective Date" shall be April 6, 2001.
(c) "Termination Date" shall be April 6, 2001.
(d) "Confidential Information" means information about
the Company and its Employees, Customers and/or Suppliers
which is not generally known outside of the Company, which
employee learns of in connection with Employee's employment
with the company, and which would be useful to competitors of
the Company. Confidential Information includes, but is not
limited to: (1) business and employment policies, marketing
methods and the targets of those methods, finances, business
plans, promotional materials and price lists; (2) the terms
upon which the Company obtains products from its vendors and
sells them to customers; (3) the nature, origin, composition
and development of the company's products; (4) the manner in
which the Company provides products and services to its
customers.
(e) "Trade Secrets" means Confidential Information which
meets the additional requirements of the Uniform Trade
Secrets Act or similar state law.
(f) "Business of Allied" means the transportation of new
and used automobiles and light trucks from the manufacturers
and related logistics and distribution services to the new
and used vehicle distribution market.
2. PAYMENTS TO XXXXX
In full settlement, accord and satisfaction of all claims Xxxxx has or
may have against Allied under his employment agreement or otherwise, Allied
will provide for the following compensation to Xx. Xxxxx:
(a) Starting on April 15, 2001, and continuing on the
first and fifteenth days of each successive month, 24
semi-monthly payments in the amount of $21,258.34 per
payment. These 24 payments will start on April 15, 2001, and
end on April 1, 2002, for a total amount of Five Hundred Ten
Thousand Two Hundred Dollars ($510,200).
(b) Should Xxxxx elect to exercise his COBRA rights,
Allied will make payments on behalf of Xxxxx to extend
insurance subject to Xxxxx'x COBRA rights for a period of
twelve (12) months in conjunction with the semi-monthly
payments in the preceding paragraph.
(c) Xxxxx acknowledges and agrees that Allied shall
withhold applicable taxes and other withholdings as required
by law.
(d) Xxxxx agrees and acknowledges that the consideration
to be provided him by Allied pursuant to this Agreement is,
in significant and substantial part, separate from and in
addition to anything of value to which Xxxxx is already or
would otherwise be entitled.
3. LIFE INSURANCE
Allied acknowledges that it is a party to (i) that certain
Split-Dollar Insurance Agreement between Allied and Xxxxxxx X. Xxxxx and Xxxxx
X. Xxxxx, as Co-Trustees of the AMP Family Insurance Trust, dated May 3, 1994,
the subject of which is life insurance coverage on Xxxxx'x life, and (ii) that
certain Split-Dollar Insurance Agreement between Allied and Xxxxx X. Xxxxx, as
Trustee of the AMP Family Insurance Trust, dated March 13, 1998, the subject of
which is life insurance coverage on the lives of Xxxxx and Xxxxxxx X. Xxxxx
(hereinafter, such agreements are collectively referred to as the "Insurance
Agreements", and the life insurance policies that are the subject of the
Insurance Agreements are collectively referred to as the "Policies"). Xxxxx and
Allied agree to work in good faith to determine if the Policies can be replaced
by other life insurance policies to lower the cost of the insurance coverage
without reducing the amount of coverage or diminishing the quality of the
underwriter of such life insurance coverage. Xxxxx agrees that if such
replacement policies are identified and are approved by Xxxxx (which approval
shall not be unreasonably withheld or delayed), Xxxxx shall use his best
efforts to efforts to cause the trustees of the Xxxxx Insurance Trust to agree,
in writing, and to cause the trustee of the AMP Family Insurance Trust to
agree, in writing, to make such changes and amend such agreement as will be
necessary to replace Policies with the approved replacement policies.
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4. COVENANTS OF XXXXX
As conditions to the payments and benefits to be made and provided by
Allied to Xxxxx as provided herein, Xxxxx agrees as follows:
(a) Duty of Confidentiality. For a period of five (5)
years following the Effective Date, Employee shall not
directly or indirectly divulge or make use of any
Confidential Information or Trade Secrets (so long as the
information remains a Trade Secret or remains confidential)
without prior written consent of the Company. Employee
further agrees that if Employee is questioned about
information subject to this agreement by anyone not
authorized to receive such information, Employee will
promptly notify Employee's supervisor(s) or an officer of the
Company. This Agreement does not limit the remedies available
under common or statutory law, which may impose longer duties
of non-disclosure.
(b) Return of Property and Information. Allied is
currently holding a check from Xxxxx, which Xxxxx has
tendered to compensate Allied for his company-issued
computer, cellphone, pager, and personal digital assistant.
If Xxxxx does not return these items by April 23, 2001,
Allied will cash this check as full compensation for these
items. Allied will not expect the return of any other
property which may have been purchased by Xxxxx with company
funds or issued by the company. Xxxxx warrants and covenants
that he does not have any documents or information relating
to Allied in his possession, either in hard copy or
electronic form. Should Xxxxx subsequently discover that he
does possess such information, he will promptly return it to
the company. Xxxxx further promises that he will permanently
delete from the company-provided computer he now has in his
possession any Allied-related information remaining on that
computer's hard drive (or stored on other media) no later
than April 23, 2001.
(c) Non-Competition Covenant. Employee agrees that for a
period of 12 months following the Effective Date, Employee
will not compete with the Business of Allied by performing
activities of the type performed by Employee for the Company
within one year prior to Employee's termination. Likewise,
Employee will not perform activities of the type which in the
ordinary course of business would involve the utilization of
Confidential Information or Trade Secrets. This paragraph
restricts competition only within the 48 States of the
continental United States of America.
(d) Non-Solicitation Covenant. Employee agrees that for
a period of 12 months following the Effective Date, Employee
will not directly or indirectly solicit or attempt to solicit
any business in competition with the Business of Allied from
any of the Company's customers or suppliers with whom
Employee had Material Contact during the last year of
Employee's employment with the Company.
(e) Non-Recruitment of Company Employees. Employee
agrees that for a period of 18 months following the Effective
Date, employee will not directly or indirectly solicit or
attempt to solicit any employee of the Company for the
purpose of encouraging, enticing, or causing said employee to
terminate employment with the Company.
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(f) Remedies for Breach of Covenants. Should Xxxxx
breach any of the covenants contained in this section, Allied
may discontinue any payments which may be due under this
agreement, in addition to any other remedies available to it,
including injunctive relief.
5. MUTUAL RELEASE
(a) Xxxxx on the one hand (including his heirs,
successors and assigns) and Allied on the other (including
its successors and assigns) hereby release each other from
any and all claims, demands, actions, and causes of action,
and all liability whatsoever, whether known or unknown,
suspected or unsuspected, fixed or contingent relating to
Xxxxx'x employment or termination from employment from Allied
(including, without limitation, claims relating to Xxxxx'x
written employment contract), up to the date of the execution
of this Agreement. This includes but is not limited to claims
at law or equity or sounding in contract (express or implied)
or tort arising under federal, state, or local laws
anti-discrimination laws, and specifically includes, without
limitation, the Age Discrimination in Employment Act, and the
Older Workers' Benefits Protection Act.
(b) Nothing contained in this Agreement shall affect or
limit Xxxxx'x rights under any pension, profit-sharing,
401(k) plan or similar qualified retirement plan currently in
effect, or his rights to elect continued health insurance
coverage under the Consolidated Omnibus Budget Reconciliation
Act ("COBRA"). Nothing in this Agreement shall be interpreted
to release any claims which arise under the terms of this
Agreement or after the effective date of this Agreement. Any
rights to indemnification which Xxxxx may have under Allied's
Articles of Incorporation, Bylaws, insurance policies or
other applicable agreements remain in effect notwithstanding
this release.
6. NO ADMISSION OF LIABILITY
The parties understand and agree that this Agreement shall not in any
way be construed as an admission by either party of any unlawful or wrongful
acts whatsoever against the opposing party or any other person, and both
parties specifically disclaim any liability to or wrongful acts against the
opposing party or any other person.
7. NONDISPARAGEMENT AND COOPERATION
Xxxxx agrees that he will not engage in any critical or disparaging
speech or conduct at any time in the future directed at Allied. Similarly,
Allied agrees that its Officers and Directors will not engage in any critical
or disparaging speech or conduct at any time in the future directed at Xxxxx.
The parties acknowledge and agree that they must truthfully respond to
subpoenas or other lawful requests for information by government agencies, but
will notify the opposing party if such disclosures might tend to disparage the
opposing party so that the opposing party will have the opportunity to protect
his/its interests. Xxxxx further agrees not to induce, incite, encourage or
assist others to pursue claims of any nature against Allied. Xxxxx will make
himself available
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upon reasonable notice to provide information and give a sworn statement if
requested about his knowledge of matters involving litigation or threatened
claims against Allied or its subsidiaries.
8. RESIGNATION AND NEUTRAL REFERENCE
Xxxxx agrees to resign his position as an officer and member of the
Board of Directors (Exhibit "A"), and will not seek to re-establish any
relationship with Allied as a Board Member, Employee, Director, Agent,
Contractor or otherwise. Upon a reference request for Xx. Xxxxx, Allied will
respond with dates of employment, positions held, and compensation. Xx. Xxxxx
agrees to direct all reference requests to: The Company's General Counsel,
currently Xxxxxx X. Xxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx,
00000.
9. REMEDIES AND FORUM
The parties agree that they will not file any action arising out of
this agreement other than in a state or federal court located in DeKalb County,
Georgia. The parties consent to personal jurisdiction and venue solely within
these forums and solely in DeKalb County, Georgia and waive all otherwise
possible objections thereto. The prevailing party shall be entitled to recover
its costs and attorney's fees in any such proceeding, except that claims by
Xxxxx relating to age discrimination or the effect of this release on claims of
age discrimination shall not be subject to this costs and attorney's fees
provision. The existence of any claim or cause of action by Employee against
the Company, including any dispute relating to the termination of this
agreement, shall not constitute a defense to enforcement of the restrictive
covenants contained in Section 4 by injunction.
10. RECITALS AND SEVERABILITY
The recitals set forth above are true and correct and are incorporated
herein. Each provision of this Agreement is severable, and any provision of
this Agreement found to be prohibited or invalid by law shall be ineffective to
the extent of any such prohibition or invalidity without invalidating the
remaining provisions hereof.
11. ACKNOWLEDGEMENT AND REVOCATION PERIOD
Xxxxx certifies that he has fully read, has received an explanation
of, has negotiated and completely understands the provisions of this Agreement,
and that he has been advised by Allied that he should consult with an attorney
before signing this Agreement and that, in fact, he has been represented by
independent legal counsel in connection with the review and negotiation of this
Agreement. He further certifies that he has had adequate time to review and
consider the provisions of this Agreement and that he is signing this Agreement
knowingly, freely and voluntarily, without duress, coercion or undue influence.
Xxxxx understands and acknowledges that he has twenty-one (21) days from the
receipt of this agreement to consider whether he wishes to sign it. Should he
choose to sign, he has an additional seven (7) calendar days following his
execution of this Agreement to revoke his acceptance of this Agreement (the
"Revocation Period"). This Agreement shall not become effective or enforceable
until the Revocation Period has expired. Revocation of this Agreement must be
made by delivering a written notice of revocation to Xxxxxx X. Xxxxxxx,
Chairman of Allied. For the revocation to be effective, written notice must be
received no later than the close of business on the seventh day after Xxxxx
signs this Agreement. On the eighth day after Xxxxx signs this Agreement, the
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Agreement becomes binding and effective. In addition, Xxxxx understands and
acknowledges that no monies will be paid under the terms of this Agreement
until the end of the Revocation Period; however, any payments which fell due
prior to the expiration of the Revocation Period will be paid promptly once the
Revocation Period expires.
12. ENTIRE AGREEMENT
This Agreement and the applicable terms of the Employment Agreement
represent the entire agreement between Xxxxx and Allied with respect to the
subject matter hereof and thereof and may not be modified or amended except by
an express written agreement between the parties hereto.
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with,
the laws of the State of Georgia without reference to conflicts of law
principles.
14. NOTICES
All notices or other communications under this Agreement shall be in
writing and shall be deemed to be given on the date of service if served
personally (by courier or nationally recognized overnight courier), or on the
third day after deposit in the U.S. Mail, certified, return receipt requested,
with adequate postage thereon, to the address set forth below the intended
recipient's signature.
For Allied: Xxxxx Xxxxx, Allied Holdings, Inc., 000 Xxxxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx, 00000.
For Xx. Xxxxx: A. Xxxxxxxx Xxxxx, Xx., 0000 Xxxxxxx Xxx, Xxxxxxx,
Xxxxxxx, 00000.
PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS AND CAUSES OF ACTION.
IN WITNESS WHEREOF, Xxxxx has hereunder set his hand and seal, and
Allied has caused this Agreement to be executed and delivered by its duly
authorized officers, all as of the date and year first above written.
(SEAL)
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WITNESS A. XXXXXXXX XXXXX, XX.
Address:
0000 Xxxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
Attest: ALLIED HOLDINGS, INC.
By:
------------------------------- ----------------------------------------
Its ______ Secretary Xxxxxx X. Xxxxxxx, Chairman
[CORPORATE SEAL] Address:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
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RESIGNATION
The undersigned hereby resigns, effective immediately, as an officer
and director of Allied Holdings, Inc. and the Affiliates (as defined in that
certain Employment Agreement, dated as of February 23, 2000, between Allied
Holdings, Inc. and the undersigned), and, to the extent applicable, from all
committees of which he is a member.
Dated this 6th day of April, 2001.
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A. Xxxxxxxx Xxxxx, Xx.
