SEVERANCE AGREEMENT AND FULL RELEASE
Exhibit 10.27
SEVERANCE AGREEMENT AND FULL RELEASE
This Severance Agreement and Full Release (“Release Agreement” or “Agreement”) is made and
entered into this 11th day of July 2007 (“Execution Date”) by and between Xxxxxx X. Xxxxxxxxx
(“Employee,” a term which includes Employee, Employee’s spouse, and all assigns, heirs, and
successors in interest) and Allied Automotive Group, Inc., a Georgia corporation (“Company,” a term
which includes Company, its parent, subsidiary and affiliated organizations, their successors in
interest, and their respective agents, Employees, officers, directors and attorney ).
WHEREAS Employee and Company are parties to an employment agreement under which Employee
is entitled to receive certain severance benefits under certain conditions, including the
execution of this Release Agreement, and
WHEREAS Employee and Company have mutually agreed that Employee is entitled to receive the
severance benefits described in Employee’s employment agreement in consideration for the execution
of this Release Agreement, it is hereby
AGREED AS FOLLOWS:
1. TERMINATION OF EMPLOYMENT. Employee agrees that his employment relationship with
Company will terminate on July 10, 2007, whereupon all benefits, privileges and authorities related
thereto ceased, except as set forth herein. Effective as of the Execution Date, Employee resigns as
a member of the Board of Directors and as an officer of all subsidiaries and affiliates of Company,
including, but not limited to, Haul Insurance, Ltd.
2. NO ADMISSION BY COMPANY. Company and Employee agree that the entry of the parties
into this Release Agreement is not and shall not be construed to be an admission of liability or
wrongdoing on the part of Company.
3. FUTURE COOPERATION. Employee AGREES that, notwithstanding Employee’s termination on
the date specified above, Employee will make himself available upon reasonable notice to Company or
its designated representatives for the purposes of; (1) Providing information regarding the
projects, files and/or clients with whom Employee worked for the purpose of transitioning such
projects, files and/or clients to other Company Employees as the result of Employee’s termination;
(2) Providing information and/or testimony regarding any other matter, file, project and or client
with whom Employee was involved while employed by Company.
4. CONSIDERATION. Within ten days following the expiration of the revocation period
described in Section 17 below, Company shall pay Employee Two Hundred Twenty-Five Thousand Dollars
($225,000.00), subject to ordinary and lawful deductions, in one lump sum payment in consideration
for Employee signing this Release Agreement and agreeing to its terms. Employee agrees and
acknowledges that this is consideration to which Employee would not otherwise be entitled absent
execution of this Release Agreement.
In addition, Employer shall continue to provide to Employee and Employee’s immediate family,
for a period of twelve (12) months from termination, medical and dental coverage by making payments
on behalf of Employee to extend medical and dental insurance subject to Employee’s COBRA rights.
Employee must exercise his COBRA rights by providing written notice thereof. Employee releases
Employer from any further obligation to make any payments on behalf of Employee in regard to his
COBRA rights.
5. OTHER BENEFITS. Nothing in this Release Agreement shall:
(a) alter or reduce any vested, accrued benefits (if any) Employee may have to
any pension benefits to which Employee may be entitled under any retirement or
401(k) plan established by Company;
(b) affect Employee’s right (if any) to elect and pay for continuation of Employee’s
health insurance coverage under the Health Benefit Plan pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 (C.O.B.R.A.); or
(c) affect Employee’s right to receive any “Stay Bonus” (as defined in the Allied
Holdings, Inc. Amended Severance Pay and Retention and Emergence Bonus Plan for Key
Employees, as in effect from time to time (hereinafter the “KERP”) in accordance
with the terms and conditions of the KERP. The Company shall pay to Employee
Fifty-Five Thousand One Hundred Twenty-Five Dollars ($55,125.00), subject to
ordinary and lawful deductions, constituting the final amount of his Stay Bonus due
to Employee under the KERP, on or before August 8, 2007.
Employee shall receive his final paycheck for services rendered through July 10, 2007, in the
ordinary course of business according to the payroll policies and procedures of Company and subject
to ordinary and lawful deductions. Employee waives any claim to any further compensation or
benefits other than those expressly set forth in this Release Agreement.
6. EMPLOYEE’S FULL RELEASE OF ALL CLAIMS AGAINST COMPANY. In
consideration for the undertakings and promises of Company set forth in this Release
Agreement, Employee unconditionally releases, discharges, and holds harmless Company, its
corporate affiliates, officers, directors, shareholders, employees, agents, insurers and
attorneys as
individuals; and the successors and assigns of each (collectively referred to as “Releasees”),
from
each and every claim, cause of action, right, liability or demand of any kind and nature, and
from
any claims which may be derived therefrom (collectively referred to as “claims”), that
Employee
had, has, or might claim to have against Releasees at the time Employee executes this Release
Agreement, including but not limited to any and all claims:
(a) arising from Employee’s employment, pay, bonuses, amounts due under the
KERP, vacation or any other Employee benefits, and other terms and conditions of
employment or employment practices of Company;
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(b) relating to the termination of Employee’s employment with Company or
the surrounding circumstances thereof;
(c) relating to payment of any attorney’s fees for Employee;
(d) based on discrimination on the basis of race, color, religion, sex, national
origin, handicap, disability, age or any other category protected by law under Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, Executive Order
11246, the Age Discrimination in Employment Act, the Older Workers Benefits
Protection Act, the Equal Pay Act, the Americans With Disabilities Act, the
Rehabilitation Act of 1973, the Consolidated Omnibus Budget Reconciliation Act of
1985, (as any of these laws may have been amended) or any other similar labor,
employment or anti-discrimination law under state, federal or local law;
(e) based on any contract, tort, whistleblower, personal injury, wrongful
discharge theory or other common law theory.
7. Covenants of Employee
As conditions to the payments and benefits to be made and provided by Company to Employee
as provided herein, Employee agrees as follows:
(a) Use of Information. For a period of two (2) years following the
Execution Date, Employee shall not, directly or indirectly, divulge or make use of
any Confidential Information without prior written consent of the Company. Employee
further agrees that throughout the period of time during which information remains a
Trade Secret under applicable law, Employee shall not, directly or indirectly,
divulge or make use of any Trade Secret without prior written consent of 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 or in
equity, which may impose longer duties of non-disclosure.
(b) Return of Property and Information. Employee shall return to Company as
of the Execution Date any and all property which may have been purchased by Employee
with Company funds or issued by the Company, including, but not limited to,
computers, cell phones, pagers, personal digital assistants, Company credit cards
and airport gold parking card. Employee warrants and covenants that he does not have
any documents or information relating to Company in his possession, either in hard
copy or electronic form. Should Employee subsequently discover that he does possess
such information, he will promptly return it to the company.
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(c) Non-Solicitation Covenant. Employee agrees that for a period of 12
months following the Execution Date, Employee will not directly or indirectly solicit
or attempt to solicit any business in competition with the Business of Company from
any of the Company’s customers, vendors, or suppliers with whom Employee had Material
Contact during the last year of Employee’s employment with the Company.
d) Non-Recruitment of Company Employees. Employee agrees that for a
period of 12 months following the Execution Date, Employee will not directly or
indirectly solicit or attempt to solicit any employee of the Company with whom
Employee had Material Contact during the last year of Employee’s employment with the
Company for the purpose of encouraging, enticing, or causing said employee to
terminate employment with the Company.
(e) Covenant Not to Xxx. Employee covenants not to xxx Company or any party
released herein on account of any claim released hereby, or to encite, assist or
encourage others to bring claims against Company. Employee further covenants not to
accept, recover or receive any monetary damages or any other form of relief which
may arise out of or in connection with any administrative remedies which may be
filed with or pursued independently by any governmental agency or agencies, whether
federal, state or local.
(f) Consulting Services. Employee agrees that for the period beginning on
the date following the Execution Date and ending thirty (30) calendar days
thereafter, Employee will make himself available for consultation as required and
deemed necessary by the President and Chief Executive Officer or the Senior
Vice-President Terminal Operations of the Company, to provide information,
explanation, review or support, or to serve in any other consulting capacity to the
Company. In consideration for making himself readily available to the Company during
such thirty (30) day period, the Company agrees to pay Employee a consulting fee in
an amount equal to Ten Thousand Dollars ($10,000.00), subject to ordinary and lawful
deductions, with Five Thousand Dollars ($5,000,00) to be paid fifteen (15) days
after the Execution Date and Five Thousand Dollars ($5,000.00) to be paid on the
thirtieth (30th) day following the Execution Date; provided that this
consulting fee and the services contemplated hereunder shall only be due and payable
in the event the Revocation Period described in Section 17 below has expired and
this Release Agreement is in effect. Employee and the Company agree that Employee
shall only be a consultant for the Company during the thirty (30) day period
following the Execution Date and that Employee shall have no authority to bind the
Company during this period.
8. NO INTEREST IN REINSTATEMENT. Employee hereby acknowledges that Employee has
no interest in reinstatement, reemployment or employment with Company, and Employee forever waives
any interest in or claim of right to any future employment by Company. Employee further covenants
not to apply for future employment with Company.
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9. CONFIDENTIALITY. Except as otherwise expressly provided in this paragraph,
Employee agrees that the terms, amount of consideration, conditions of this Release Agreement are
and shall be deemed to be confidential and hereafter shall not be disclosed by Employee to any
other person or entity. The only disclosures excepted by this paragraph are (a) as may be required
by law; (b) Employee may tell prospective employers the dates of Employee’s employment, positions
held, evaluations received, Employee’s duties and responsibilities and salary history with Company;
(c) Employee may disclose the terms and conditions of this Release Agreement to Employee’s
attorneys and tax advisers; and (d) Employee may disclose the terms and conditions of this Release
Agreement to Employee’s spouse (if any); provided, however, that Employee makes Employee’s spouse,
attorneys and/or tax advisers aware of the confidentiality provisions of this paragraph, and
further provided that Employee will be responsible for any breaches of this confidentiality
paragraph by his spouse, attorneys or tax advisers to the same extent as if Employee had directly
breached this paragraph.
10. NO HARASSING CONDUCT. Employee further agrees and promises that Employee will not
induce or incite claims of discrimination, wrongful discharge, breach of contract, tortious acts,
or any other claims against Company by any other person or entity, that Employee shall not
undertake any harassing or disparaging conduct directed at any of the parties, and that Employee
shall refrain from making any negative or derogatory statements concerning Company at any time in
the future. Provided, however, this provision may not be used to restrict the exercise of
Employee’s rights under local, state or federal law.
11. CONSTRUCTION OF RELEASE AGREEMENT AND VENUE FOR DISPUTES. This Release Agreement
shall be deemed to have been jointly drafted by the parties, and shall not be construed against any
party. It shall be governed by the law of the State of Georgia, and the parties agree that any
actions arising out of or relating to the interpretation or enforcement of this Release Agreement
must be brought exclusively in either the Superior Court of DeKalb County, Georgia or the United
States District Court for the Northern District of Georgia. The parties consent to the personal
jurisdiction and venue of such courts and waive all possible objections thereto.
12. SEVERABILITY. The parties agree that the provisions of this Release Agreement
shall be construed in favor of their reasonable nature, legality, and enforceability, in that any
reading causing unenforceability shall yield to a construction permitting enforceability. If any
single provision or clause shall be found unenforceable, it shall be severed and the remaining
covenants and clauses enforced in accordance with the tenor of the Release Agreement.
13. NO RELIANCE UPON OTHER STATEMENTS. This Release Agreement is entered into without
reliance upon any statement or representation of any party hereto or parties hereby released other
than the statements and representations contained in writing in this Release Agreement.
14. ENTIRE UNDERSTANDING. The parties acknowledge that this Release Agreement contains
the entire understanding of the parties with respect to the subject matter contained herein, and
that it may not be modified other than in a writing signed by the parties
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hereto. Any provisions of any employment agreement between Employee and Company which survive
termination or cessation of Employee’s employment by their terms, including, without limitation,
restrictive covenants, shall be unaffected by this Release Agreement.
15. NO WAIVER. Any failure by any party to enforce any of their rights and privileges
under this Release Agreement shall not be deemed to constitute waiver of any rights and privileges
contained herein.
16. FULL AND KNOWING RELEASE. By signing this Release Agreement, Employee
certifies that:
(a) Employee has carefully read and fully understands the provisions of this Release
Agreement;
(b) Employee was advised by Company in writing, via this Release Agreement, to
consult with an attorney before signing this Release Agreement;
(c) Company hereby allows Employee a reasonable period of time from its initial
presentation to Employee (at least 21 days) to consider this Release Agreement
before signing it, should Employee so desire; and,
(d) Employee agrees to its terms knowingly, voluntarily and without
intimidation, coercion or pressure.
17. REVOCATION OF RELEASE AGREEMENT. Employee certifies that he has
fully read, has received an explanation of, and completely understands the provisions of this
Agreement, and that he has been advised by Company that he should consult with an attorney
before signing 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. Employee 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 Xxxxxxxx, Senior Vice President of Human Resources,
Allied Automotive Group, Inc., of Company. For the revocation to be effective, written notice
must be received no later than the close of business on the seventh day after Employee signs this
Agreement. Revocation can be made by hand delivery, telegram, facsimile, or postmarking
before the expiration of this seven (7) days period. On the eighth day after Employee signs this
Agreement, the Agreement becomes binding and effective. In addition, Employee understands
and acknowledges notwithstanding anything contained herein to the contrary, that no monies will
be paid under the terms of this Agreement until the end of the Revocation Period.
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18. Definitions
(a) “Confidential Information” means information (whether in print or otherwise)
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,
customers and/or suppliers 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.
(b) “Trade Secrets” means Confidential Information which meets the additional
requirements of the Uniform Trade Secrets Act or similar state or other law, and
specifically includes, but is not limited to, prices, rates, and related information
regarding pricing, and computer software programs owned or developed by Company, its
parent, subsidiaries or affiliates.
(c) “Business of Company” means the provision of logistics and distribution services
to the new and used vehicle distribution market and other segments of the automotive
industry.
(d) “Material Contact” means direct personal contact or the supervision of efforts of
those who have personal contact on behalf of Company, with a customer, supplier, or
vendor of Company.
IN WITNESS WHEREOF the undersigned hereunto set their hands to this Release Agreement on
the dates written below.
Executed this 11th day of July, 2007.
EMPLOYEE
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ALLIED AUTOMOTIVE GROUP, INC. | |||||||
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 |
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XXXXXX X. XXXXXXXXX
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By: | Xxxxxx Xxxx | ||||||
| Executive Vice President and CFO | ||||||||
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