Severance, Release and Noncompetition Agreement
Exhibit
10.46
Severance,
Release and Noncompetition Agreement
This
Severance, Release and Noncompetition Agreement (“Agreement”) is entered into as
of December 8, 2005 by and among Advance Auto Parts, Inc. (“AAP”), Advance
Stores Company, Incorporated (“ASCI”) (“AAP” and “ASCI” are jointly and
severally hereinafter referred to as “Advance”) and Xxxxxxx X. Xxxx
(“Employee”).
WHEREAS,
Advance and Employee have determined that their mutual interests are best served
if Employee terminates his employment with Advance, and have further agreed
that
Employee will resign from his employment with Advance effective as of February
28, 2006 (the “Effective Date”);
WHEREAS,
Employee has determined he will resign from all officer and director positions
at Advance and all subsidiary and affiliated Companies, effective
immediately;
WHEREAS,
Advance has agreed to provide to Employee the benefits and payments provided
for
in this Agreement, which are in addition to the benefits and payments which
Advance is otherwise obligated to provide to Employee in connection with the
termination of Employee’s employment with Advance (which additional benefits and
payments include, but are not limited to, salary continuation for Ten (10)
months and bonus eligibility continuation for the remainder of fiscal 2005)
in
return for the additional covenants, agreements and obligations of Employee
provided for in this Agreement; and
WHEREAS,
Employee is willing to accept the additional benefits and payments to him
provided for in this Agreement and to comply with the terms and conditions
of
this Agreement, and the terms and conditions of all other agreements between
Advance and Employee (as modified herein) which survive the termination of
Employee’s employment with Advance.
NOW,
THEREFORE, in consideration of the foregoing premises, the mutual promises
of
the parties set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
| 1. |
Recitals.
The parties hereto agree that the foregoing recitals in this Agreement
are
true and accurate.
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| 2. |
Discharge
of Severance Obligations.
Advance shall pay to Employee and Employee accepts from Advance the
following:
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| 2.01. |
A
lump sum payment, less all applicable withholding taxes and payroll
deductions, which shall be paid to Employee within two weeks after
the
Effective Date, and which shall represent payment for the amount
of his
hours of accrued but unused vacation time to which Employee would
have
been entitled as of the Effective Date had he not terminated his
employment with Advance.
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| 2.02. |
(a)
A
lump sum bonus payment attributable to the fourth fiscal quarter
of 2005
of that amount which Employee would have been entitled to (if any)
had
Employee remained an Employee through the time required to receive
such
bonus payment. Such bonus payment shall be made at the time the fourth
quarter bonus payment is made to other executives and shall include
any
annual roll-up amounts that would have been earned. Employee shall
not be
entitled to any bonus payments attributable to the 2006 fiscal
year.
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(b) When
the item described in section 2.02(a) above is paid to Employee,
such
payment shall constitute payment in full of Advance’s obligations under
the 2005 Bonus
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Plan
for Employee, a copy of which is attached hereto as Exhibit A (“2005 Bonus
Plan”) and Employee shall be entitled to no further bonus
payments.
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| 2.03. |
The
sum of $208,346.67, the equivalent of ten (10) months of Employee’s
applicable salary as of the date of his termination of employment
with
Advance, which shall be paid in equal installments (on the normal
management pay cycle) during the ten (10) month period commencing
on March
1, 2006, less all applicable withholding taxes and payroll
deductions.
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| 2.04. |
All
payments to Employee under the provisions of Sections 2.01 and 2.03
will
not be eligible for deferral or matching contributions under any
pension
or benefit plan.
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| 2.05. |
Outplacement
services for 12 months shall be provided to Employee under the Executive
Program by Xxx Xxxxx Xxxxxxxx to include consulting, search support
and
administrative services.
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| 3. |
Medical Insurance Coverage. Advance will provide continued
group health insurance coverage to Employee under the same terms
and
conditions as provided to other executives of the Company until
February
28, 2006. Advance will provide continued group health insurance
coverage
pursuant to federal law under the regulations governing COBRA
continuation
coverage, and under the terms of the applicable group health
plan(s) or
successor plan(s). The date of the qualifying event is February
28, 2006,
for COBRA continuation coverage purposes. From the period March
1, 2006
through December 31, 2006, the Company shall pay that amount
of COBRA cost
on behalf of Employee so that Employee shall only be required
to pay that
amount he would have had to pay had he still been employed during
that
time period.
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| 4. |
Release
and Waiver.
Employee for himself, his heirs, executors, administrators
and assigns,
hereby knowingly, voluntarily and unconditionally releases,
waives, and
forever discharges Advance and Advance’s subsidiaries (including but not
limited to Western Auto Supply Company), parents, affiliates,
and their
joint and several employees, officers, directors, shareholders,
investors,
benefit plans, trustees, and their successors and assigns
(hereinafter
jointly and severally referred to for purposes of this Agreement
as
“Releasees”), from any and all obligations, claims, demands, liabilities,
judgments, causes of action, suits at law or in equity, in
tort, contract,
by statute or on any other basis, for pay and/or benefits,
for
compensatory, punitive or other damages, attorney fees, expenses,
reimbursements, or costs of any kind, including, but not
limited to, any
and all claims, demands, rights and/or causes of action under
Title VII of
the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991,
the Fair Labor Standards Act, the Family and Medical Leave
Act, the Age
Discrimination in Employment Act, the Americans with Disabilities
Act, the
Rehabilitation Act of 1973, the Workers Adjustment Retraining
and
Notification Act, the Employee Retirement Income Security
Act or any other
federal, state, or local statute or ordinance or any other
claims, whether
statutory or based on common law, arising: (a) by reason
of his employment
with Advance or the cessation of that employment or circumstances
related
thereto; or (b) by reason of any other matter, cause, or
thing done,
omitted or suffered to be done prior to and including the
date on which
Employee signs below. The parties agree and understand that
this is not to
be construed as an admission of liability by the Releasees
or any other
person or entity released hereby, by whom any liability is
expressly
denied. The Releasees expressly deny violation of any of
their policies,
procedures or agreements, or of any federal, state or local
laws or
regulations. Employee further acknowledges that he may subsequently
discover facts which were in existence at the time this Agreement
and
general release is signed in addition to or different from
those which he
now knows or believes to exist with respect to the subject
matter of this
Agreement and which, if known or suspected at the time of
executing this
Agreement, may have materially affected this Agreement and
settlement.
Nevertheless, Employee hereby waives any right, claim or
cause of action
that might arise as a result of such different or additional
facts
provided such facts were in existence at
the
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time
this Agreement and general release is
signed.
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| 5. |
Derogatory
or Defamatory Statements.
Employee agrees that he will not, by any means or in
any media, make or
provide any comment, information, communication, expression,
statement or
depiction detrimental, injurious or derogatory to the
interests of Advance
(including its directors, officers, employees, investors,
shareholders,
affiliates or related entities) (collectively referred
to in this Section
as the “Company”), and further agrees that he will not disparage,
denigrate, or cast the Company in an unfavorable light
in any manner.
Employee also agrees that he will not encourage or
facilitate any other
person to make any derogatory or disparaging comments
on his behalf, or
attributable to him, or based in any way upon information
he supplied,
about the Company or consent to or approve any such
action by another
person. Specifically, Employee recognizes that by virtue
of his position
with Advance or his knowledge of the Company or other
information he
possesses (including, but not limited to Confidential
Information as
defined in the Employment Agreement), he may be subjected
to inquiries or
otherwise approached by the media (general or trade),
potential or actual
investors, business persons (including, but not limited
to, industry
competitors) or other persons, and asked for his opinions
or comments
regarding matters relating to the Company, which may
include, but is not
limited to, information regarding the business plans,
strategies,
personnel, officers, directors, and/or present or former
employees of the
Company, and potential or actual investors. While this
Agreement is not
intended to unduly restrict Employee’s ability to respond to any such
inquiries, both the Company and Employee desire to
avoid any issues or
situations in which Employee’s opinions, comments or statements could be
misunderstood or mischaracterized to the detriment
of the Company, or
would violate in any way this Section of the Agreement.
In order to avoid
any such potential problems, Employee agrees to be
vigilant of and
extremely sensitive to such matters at all times, and
will, in accordance
with the spirit and intent of this Agreement (and this
Section 6) respond
to any such inquiry or approach with a response that
complies with the
intent, spirit and general purpose underlying this
Section 6, or Employee
will not respond at all to the inquiry or approach.
If Employee has any
questions in the future regarding the scope or intent
of this Section 6
and its applicability to a particular circumstance,
Employee agrees to
contact the Chief Executive Officer; the Senior Vice
President, Human
Resources; or the General Counsel of ASCI and discuss
the matter with the
Advance officer so contacted before responding to any
inquiry or approach.
Nothing herein shall prevent Employee from correcting
any false,
misleading or deceptive statements made about
Employee.
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| 6. |
Cooperation.
Employee acknowledges that by virtue of his position with Advance,
he has
knowledge of a substantial number of business matters involving Advance.
Employee agrees to cooperate fully with Advance and/or its representatives
and agents as to any matters upon which Employee has knowledge or
on which
he had any involvement prior to the termination of his employment.
Without
limiting the scope of the above sentence, Employee agrees to make
himself
reasonably available to assist Advance and its representatives and
agents
with any business and/or litigation (or potential litigation) matters
affecting or involving Advance. Employee acknowledges that this obligation
may require travel and appearance at meetings and/or other functions
and
Employee may only be provided with short notice for such cooperative
efforts. Employee shall be reimbursed for all reasonable costs of
travel.
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| 7. |
Non-Recruitment.
Employee
agrees that through December 31, 2006, Employee shall not, directly
or
indirectly, cause any person engaged or employed by Advance or its
Affiliates (whether part-time or full-time and whether as an officer,
employee, consultant, agent, adviser or independent contractor) (a
“team
member”) to voluntarily leave the employ of or engagement with Advance or
its Affiliates, as the case may be, or to cease providing the services
to
or on behalf of Advance or its Affiliates, as the case may be, then
provided by such team member. Employee further agrees that, during
the
same time period, he will not in any manner seek to engage or employ
any
such team member (whether or not for compensation) as an
officer,
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employee,
consultant, agent, adviser or independent contractor for any
Person other
than Advance.
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| 8. |
Reasonableness
of Terms and Covenants.
Employee acknowledges that Advance would not have agreed to enter
into
this Agreement with Employee unless he agreed to comply with
the terms
contained herein including, but not limited to, numbered Sections
4
through 7 above. Accordingly, Employee further agrees that the
terms and
covenants set forth in numbered Sections 4 through 7 above are
reasonable
and necessary to protect the legitimate business and other interests
of
Advance.
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| 9. |
Reliance.
In accepting the terms of this Agreement, Employee understands
and agrees
that is he relying wholly on his own judgment, belief,
and knowledge
and/or that of his own attorneys and advisors regarding
this Agreement and
the matters and occurrences in question. Employee has not
been influenced
to any extent whatsoever in entering this Agreement by
representations or
statements made by any person, firm or entity hereby released,
or by
persons representing or acting for them or on their behalf
employed.
Employee’s decision to sign this Agreement and general release is
entirely
voluntary and with full understanding of its consequences
and without
being coerced or threatened with retaliation of any sort.
He and his
attorneys and advisors have been given ample opportunity
to ask questions,
consider, read, review and analyze this Agreement and general
release and
Employee acknowledges that he fully understands its terms
and
conditions.
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| 10. |
Company
Obligations.
Advance agrees that it will not by any means or in
any media, make or
provide any comment, information, communication,
expression, statement or
depiction detrimental, injurious or derogatory to
the interests of
Employee and further agrees that it will not disparage,
denigrate or cast
Employee in an unfavorable light in any manner. Advance
represents that it
has no intention to bring any action against Employee
and will not bring
any such action against Employee for anything currently
known by Advance
and relating to Employee’s employment with
Advance.
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| 11. |
Confidential.
The parties will treat this Agreement as strictly
confidential, and will
accordingly not disclose the terms and conditions
hereof to any third
party except in the course of any judicial proceedings
relating to the
enforcement of this Agreement, pursuant to a
court order, or as otherwise
required by
law.
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| 12. |
Entire
Agreement.
This Agreement (and the attached Exhibit)
constitutes the entire agreement
between the parties and the terms herein
are considered by said parties to
be contractual in nature and not a mere
recital. No change or modification
of this Agreement will be valid unless
it is in writing and signed by the
parties hereto. If any term of this Agreement
conflicts with any of the
terms of any Employment Agreement, or any
other contract or agreement
between Employee and Advance, the terms
of this Agreement will control.
This Agreement and the other documents
it references and modifies,
constitute and contains the full, complete
and entire agreement and
understanding concerning Employee’s employment, all compensation of any
nature due Employee and the other subject
matters addressed herein between
the parties, and supersedes and replaces
all prior negotiations and all
agreements proposed or otherwise, whether
written or oral, concerning the
subject matters contained or referenced
herein.
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| 13. |
Specific
Performance.
Employee acknowledges that it would
be impossible to determine the amount
of damages that would result from
any breach of any of the provisions
of
this Agreement by Employee and that
the remedy at law for any breach,
or
threatened breach, of any of the
provisions of this Agreement would
likely
be inadequate and, accordingly, agrees
that Advance shall, in addition to
any other rights or remedies which
they may have, be entitled to seek
such
equitable and injunctive relief as
may be available from any court of
competent jurisdiction to restrain
Employee from violating any of the
provisions of this Agreement. In
connection
with
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any
action or proceeding for injunctive
relief, Employee hereby waives
the
claim or defense that a remedy
at law alone is adequate and
agrees, to the
maximum extent permitted by
law, to have each provision
of this Agreement
specifically enforced against
him, without the necessity
of posting bond
or other security against him,
and consents to the entry of
injunctive
relief enjoining or restraining
any breach or threatened breach
of this
Agreement.
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| 14. |
Return
of Corporate Property.
Employee hereby agrees that he will immediately turn
over to Advance all
files, documents, notes or other records (of any form
or nature, including
but not limited to tape, disk or other electronic storage
method) in his
possession or control (or the possession or control
of his attorneys)
pertaining to the operation, business, personnel and/or
affairs of Advance
and that he, and his attorneys and agents, will not
retain copies of any
such files, notes, documents or records and further
that he will not
disclose the contents of any such files, notes, documents
or records to
any other person, entity, agency, association, business,
organization,
firm or corporation. Employee shall be permitted to
retain his lap top
computer after all company information has been deleted
by Advance
technical personnel. Employee further covenants and
agrees that he will
not at any time disclose to any other person, entity,
agency, association,
business, organization, firm or corporation any information
regarding the
operations, business and affairs of Advance other than
information which
is customarily made available to the general public,
without the prior
written consent of Advance or except as may be required
by law or legal
process after prior notice to Advance and a reasonable
opportunity under
the circumstances for Advance to evaluate the necessity
of such proposed
disclosure and to seek to oppose or limit
it.
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| 15. |
Notices.
Any and all notices, designations, consents,
offers, acceptances, or any
other communications provided for herein shall
be given in writing and
shall be deemed given on the date received
if sent by registered or
certified mail, return receipt requested; or
on the date actually received
if sent by express mail or other similar overnight
delivery or if hand
delivered or if sent via facsimile, which shall
be
addressed:
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If
to
Advance:
0000
Xxxxxxx Xxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Chief Executive Officer
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
cc:
General Counsel
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
If
to
Employee:
Xxxxxxx
X. Xxxx
Address:
Telephone:
| 16. |
Governing
Law.
This Agreement shall be subject to and governed
by the laws of the
Commonwealth of
Virginia.
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| 17. |
Severability.
The invalidity or unenforceability
of any covenant or any other provision
of this Agreement shall not affect
the other provisions hereof. The
parties to this Agreement agree
that
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if
a court should find that a
covenant or provision of this
Agreement is
invalid or unenforceable that
the court is empowered to modify
or redraft
the invalid or unenforceable
provision to one which is valid
and
enforceable and comes closest
to fulfilling the intent of
the parties as
expressed in the original provision.
In the event that the court
can not
redraft or modify the provision,
then this Agreement shall be
construed in
all respects as if such invalid
or unenforceable provision
were
omitted.
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| 18. |
Successors
and Assigns Binding Effect.
This Agreement shall be binding
upon and inure to the benefit
of Advance
and Employee and their respective
heirs, legal representatives,
executors,
administrators, successors
and assigns, provided that
Employee may not
assign his rights or delegate
his obligations
hereunder.
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| 19. |
No
Waiver.
The failure by Advance
to enforce any of
its rights hereunder
shall not be
deemed to be a waiver
of such rights, unless
such waiver is in
writing and
signed by the waiving
party. Waiver of
any one breach shall
not be deemed
to be a waiver of
any other breach
of the same or any
other provision
hereof.
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| 20. |
No
Construction
Against Any
Party.
Legal counsel
for each
of the respective
parties (Employee
and Advance)
reviewed
this Agreement.
This Agreement
is the product
of informed
negotiations
among Employee
and Advance
and if any
part of this
Agreement
is deemed
to be unclear
or ambiguous,
it shall
be construed
as if it
were
drafted jointly
by all parties.
Moreover,
Employee
and Advance
each
acknowledge
that no party
was in a
superior
bargaining
position
regarding
the substantive
terms of
this
Agreement.
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| 21. |
Effective
Date.
This
Agreement
shall
become
effective
the
first
business
day
after
the
expiration
of
the
required
seven
(7)
day
revocation
period
as
provided
in
Section
23.
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| 22. |
No
Other
Compensation.
The
parties
agree
that
Employee
will
not
receive,
nor
be
entitled
to
receive,
any
other
compensation,
pay,
bonuses
or
any
other
benefits
from
Advance
or
to
participate
in
any
employee
pension
benefit
plans,
employee
welfare
benefit
plans,
insurance
programs,
or
any
other
compensatory
or
benefit
program
provided
by
Advance,
except
as
expressly
provided
for
herein
and
except
for
Employee’s
vested
rights
in
Advance’s
existing
401(K)
Plan,
the
nonqualified
deferred
compensation
program
and
the
Stock
Option
Program.
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| 23. |
Certain
Rights.
Employee
understands
that
he
has
twenty-one
(21)
days
to
consider
this
Agreement.
Employee
has
also
been
informed
that
he
should
consider
this
Agreement
carefully,
and
should
consult
with
his
attorney
prior
to
executing
this
Agreement,
and
that
this
Agreement
contains
a
general
release.
Employee
acknowledges
that
he
has
retained
an
attorney
to
represent
and
advise
him
with
respect
to
this
Agreement.
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Employee
has
twenty-one
(21)
days
from
the
date
he
received
this
Agreement
to
consider
this
Agreement
and
general
release.
If
Employee
does
not
sign
this
Agreement
and
general
release
and
return
it
to
Advance
within
twenty-one
(21)
days
of
receipt,
it
will
be
null
and
void.
Employee
also
understands
that
he
may
sign
and
return
this
Agreement
prior
to
the
expiration
of
the
twenty-one
(21)
day
period.
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After
Employee
has
read
and
understands
the
contents
of
this
Agreement,
Employee
agrees
to
acknowledge
his
acceptance
by
signing
in
the
space
indicated
below
in
the
presence
of
a
notary
public,
and
to
return
the
Agreement
by
hand
delivery
or
by
registered
or
overnight
mail
to
General
Counsel,
Advance
Stores
Company,
Inc.,
0000
Xxxxxxx
Xxxx,
Xxxxxxx,
Xxxxxxxx
00000.
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Employee
further
understands
that
he
has
seven
(7)
days
after
he
signs
this
Agreement
in
which
he
may
revoke
it
with
a
notice
to
Advance
in
writing.
This
Agreement
will
not
become
effective
until
after
this
revocation
period
has
passed.
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[The
rest of this page is intentionally left blank]
By
his
notarized signature below, Employee acknowledges that he has read this
Agreement, understands the terms of the Agreement and its legal and binding
effect, and is voluntarily executing this Agreement.
/s/Xxxxxxx
X. Gray__________
Xxxxxxx
X. Xxxx
Team
Member ID: xxxxx
| COMMONWEALTH OF VIRGINIA | ) |
| ) to wit: | |
| CITY/COUNTY OF _________ | ) |
The
foregoing instrument was acknowledged before me by ______________________,
this
_____ day of ____________, 2005.
___________________________
Notary
Public
My
commission expires:
___________________
ADVANCE
STORES COMPANY, INCORPORATED
By:
/s/
Xxxx X. Margolin_
Name:
Xxxx
X. Xxxxxxxx
Title:
Senior Vice President,
General
Counsel and Secretary
ADVANCE
AUTO PARTS, INC.
By:
/s/
Xxxx X. Margolin_
Name:
Xxxx
X. Xxxxxxxx
Title:
Senior Vice President,
General
Counsel and Secretary
