EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") made this _____day of
_______________, 1997 between SONIC AUTOMOTIVE, INC. its successors or assigns,
subsidiary corporations or affiliates (collectively, the "Employer") and O.
XXXXXX XXXXX ("Employee").
R E C I T A L S
WHEREAS, Employer desires to retain the services of Employee; and
WHEREAS, Employee is prepared to perform those duties as set forth in
this Agreement.
NOW, THEREFORE, the parties intending to be legally bound agree as
follows:
1. Term of Employment. Employer hereby employs Employee, and
Employee hereby accepts employment from Employer for the period commencing
effective upon consummation of the initial public offering of Employer (the
"Commencement Date") and ending three (3) years thereafter, unless sooner
terminated (the "Employment Period").
2. Duties of Employee. Employee shall be employed by Employer
as its Chief Executive Officer and shall report directly to the Company's Board
of Directors. Employee's duties shall include, but not be limited to, rendering
such services as the Board of Directors may, from time to time, assign to
Employee. Employee shall devote approximately fifty percent (50%) of his working
time to the performance of the his duties for Employer.
3. Compensation. For all services rendered by Employee under this
Agreement, he shall be entitled to compensation in accordance with the
following:
(a) Base Salary. During the Employment Period, the
Employee shall receive an annual base salary ("Annual Base Salary") of Three
Hundred Fifty Thousand and NO/100 Dollars ($350,000.00), which shall be paid in
equal monthly installments in the amount of Twenty-Nine Thousand One Hundred
Sixty-Six and 66/100 Dollars ($29,166.66).
(b) Additional Salary and Bonus. In addition to the
Annual Base Salary, Employer shall pay to the Employee such additional amounts
as may be determined and ratified from time to time by the Compensation
Committee of Employer's Board of Directors.
4. Fringe Benefits. During the Employment Period, Employee shall
receive fringe benefits in keeping with those provided to other similarly
situated employees of Employer.
5. Termination of Employment. Employee shall serve at the leisure of
the Board of Directors and Employee's employment may be terminated by the Board
of Directors at any time.
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6. Restrictive Covenants. For purposes of this Agreement,
"Restrictive Covenants" mean the provisions of this paragraph 6. It is
stipulated and agreed that Employer is engaged in the business of owning and
operating automobile and/or truck dealerships, which business includes, without
limitation, the marketing, selling and leasing of new and used vehicles and the
servicing of automobiles and trucks (the "Business"). It is further stipulated
and agreed that as a result of Employee's employment by Employer, and as a
result of Employee's continued employment hereunder, Employee has and will have
access to valuable, highly confidential, privileged and proprietary information
relating to Employer's Business. The unauthorized use or disclosure by Employee
of any of the Confidential Information (the "Confidential Information") would
seriously damage Employer in its Business. In consideration of the provisions of
this paragraph 6, and the compensation and benefits referred to in paragraphs 3
and 4 hereof, Employee agrees as follows:
(a) During the term of this Agreement and after its
termination or expiration for any reason, Employee will not, without Employer's
prior written consent, use, disclose, or make accessible to any third person or
entity, any aspect of the Confidential Information.
(b) During the term of this Agreement and for a
period of two years after the date of the expiration or termination of this
Agreement for any reason (the "Restrictive Period"), Employee shall not,
directly or indirectly:
(i) Employ or solicit the employment of any
person who at any time during the twelve (12)
calendar months immediately preceding the termination
or expiration of this Agreement for any reason was
employed by Employer;
(ii) Provide or solicit the provision of
products or services, similar to those provided by
Employer to any person or entity within the
"Restricted Territory", as hereinafter defined, who
purchased or leased automobiles, trucks or services
from Employer at any time during the twelve (12)
calendar months immediately preceding the termination
or expiration of this Agreement for any reason;
(iii) Interfere or attempt to interfere with
the terms or other aspects of the relationship
between Employer and any person or entity from whom
Employer has purchased automobiles, trucks, parts,
supplies, inventory or services at any time during
the twelve (12) calendar months immediately preceding
the termination or expiration of this Agreement for
any reason;
(iv) Engage in competition with Employer or
its respective successors and assigns by engaging,
directly or indirectly, in a business involving the
sale or leasing of automobiles or trucks or which is
otherwise substantially similar to the Business,
within the "Restricted Territory", as hereinafter
defined; or
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(v) Provide information to, solicit or sell
for, organize or own any interest in (either directly
or thorough any parent, affiliate or subsidiary
corporation, partnership, or other entity), or become
employed or engaged by, or act as agent for, any
person, corporation or other entity that is directly
or indirectly engaged in a business in the
"Restricted Territory", as hereinafter defined, which
is substantially similar to the Business or
competitive with Employer's business; provided,
however, that nothing herein shall preclude the
Employee from holding not more than three percent
(3%) of the outstanding shares of any publicly held
company which may be so engaged in a trade or
business identical or similar to the Business of the
Employer. As used herein, "Restricted Territory"
means:
(1) all Standard Metropolitan Statistical Areas,
as determined by the United States Office of
Management and Budget, in which Employer has
an office, store or other place of business
on the date of the expiration or termination
of this Agreement for any reason.
(2) all counties in which Employer has an
office, store or other place of business on
the date of the expiration or termination of
this Agreement for any reason.
7. Remedies. It is stipulated that a breach by
Employee of the Restrictive Covenants would cause irreparable damage to Employer
and that Employer, in addition to other remedies, shall be entitled to an
injunction restraining Employee from violating or continuing any violation of
such Restrictive Covenants.
8. Entire Agreement. This Agreement contains the
entire agreement of the parties hereto, and shall not be modified or changed in
any respect except by a writing executed by the parties hereto.
9. Governing Law; Forum. This Agreement and any
dispute arising from it shall be governed by and construed according to the laws
of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first above written.
EMPLOYEE:
(SEAL)
O. Xxxxxx Xxxxx
EMPLOYER:
SONIC AUTOMOTIVE, INC.
By: ____________________________________
Title: ____________________________________
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