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EXHIBIT 10.2
AGREEMENT
THIS AGREEMENT (this "Agreement"), is dated as of this 24th day of June,
1999, by and between AutoNation, Inc., a Delaware corporation ("AutoNation"),
and Xxxxxx X. Xxxxxxx, a Florida resident ("Berrard").
W I T N E S S E T H :
WHEREAS, Berrard has served AutoNation as an officer since May 8, 1996 and
as Co-Chief Executive Officer since October 23, 1996.
WHEREAS, in accordance with this Agreement, Berrard's employment as an
executive officer of AutoNation will be terminated by mutual agreement of the
parties.
WHEREAS, Berrard and AutoNation desire to set forth herein certain
agreements between them with respect to Berrard's termination as an executive
officer of AutoNation.
NOW, THEREFORE, in consideration of the mutual promises and the covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. RESIGNATION OF EMPLOYMENT. The foregoing recitals are true and correct
and are part of this Agreement. The terms and conditions of this Agreement have
been approved by the Board of Directors of AutoNation, and this Agreement is
enforceable in accordance with its terms against the parties. The termination of
Berrard's employment as Co-Chief Executive Officer of AutoNation shall be
effective (the "Effective Date") on the earlier of (i) September 30, 1999, (ii)
such date as AutoNation publicly announces the appointment of a successor, other
than H. Xxxxx Xxxxxxxx, to serve as the Chief Executive Officer of AutoNation,
or (iii) such other date as the parties may mutually agree upon in writing.
2. SEVERANCE COMPENSATION AND BENEFITS. Berrard shall receive the following
severance compensation and benefits:
(a) So long as Berrard is in compliance in all material respects with
the terms of paragraph 10 of this Agreement, as severance compensation,
AutoNation shall continue to pay Berrard his current base salary at the rate of
$1,000,000 per year until the third anniversary of the Effective Date (the
"Severance Period"), payable in biweekly or such other installments as is in
accordance with AutoNation's normal payroll practices, and subject to all
applicable tax withholding requirements and other deductions. Berrard shall not
be entitled to any bonuses during the Severance Period. Berrard shall have no
obligation to mitigate the severance compensation by seeking other employment,
and no amount of any other compensation earned by Berrard in any other
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capacity during the Severance Period shall offset or reduce AutoNation's
obligation to pay the severance compensation to him.
(b) During the Severance Period, Berrard and his dependents shall be
entitled to continue to participate in AutoNation's group insurance and benefit
plans with the same coverages, service credits and other benefits as he had
received prior to the date hereof, except with respect to stock options (which
are discussed in paragraph 2(c) below), and on the same terms and conditions
that executive officers of AutoNation are generally subject to. The cost of any
and all premiums for dependent coverages (to the extent currently paid by
Berrard) otherwise payable by an executive officer of AutoNation for the
coverages and benefits provided to Berrard shall be deducted from the
installment payments made to Berrard under paragraph 2(a) above.
(c) Berrard has been granted options to purchase a total of 2,792,982
shares of common stock under AutoNation's various Stock Option Plans
(collectively, the "Plans"), 1,328,635 of which have previously vested, and
1,464,347 of which will hereby be accelerated and vested as of the Effective
Date, as set forth below, nothwithstanding anything to the contrary in any of
the Plans or stock option agreements entered into by Berrard at the time of the
grants:
As of the As of the
Number Date Effective
of Shares Per Hereof, Date,
Underlying Share Number Number
Options Exercise Of Options of Options Expiration
Grant Date Granted Price ($) Vested Vested Date
---------- ----------- --------- ------------ --------------- ----------
05/08/96 428,572 17.50 321,429 428,572 05/08/06
10/22/96 500,000 28.25 250,000 500,000 10/22/06
01/02/97 614,410 28.625 307,206 614,410 01/02/07
01/02/98 450,000 22.0625 450,000 450,000 01/02/08
01/06/99 800,000 15.9375 -0- 800,000 01/06/09
Notwithstanding Berrard's termination of employment as provided hereunder, the
vested options as set forth above shall be eligible to be exercised by Berrard
for the duration of their respective original terms (in each case, 10 years from
the date of grant thereof as set forth above), and shall not expire or be
terminated earlier as a result of the termination of Berrard's employment with
AutoNation hereunder. During the Severance Period, Berrard shall have the same
rights with regard to his vested options that active, then current executive
officers as a class have with respect to their vested stock options, including
with respect to any repricing of vested options. At all times, the options shall
be adjusted appropriately and automatically for any changes in the securities
underlying the options, including stock splits, dividends and other
reclassifications of any nature. Berrard acknowledges that he has no further
claim or entitlement to be awarded any future additional grant
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of options under the Plans or any other stock option plan of AutoNation.
AutoNation agrees that it will not set off its obligations under the Plans or
this Agreement against any obligation which Berrard may have under this
Agreement or otherwise to AutoNation, and AutoNation further agrees that it will
not cancel, forfeit or otherwise refuse to allow Berrard to duly exercise his
stock options. Upon exercise by Berrard of any of his stock options and payment
in full for the underlying shares, AutoNation shall deliver certificates for
such shares to Berrard within five days to the address which he specifies in the
exercise notice.
(d) In the event of Berrard's death or incapacity during the Severance
Period, the severance compensation, benefits and stock options described above
shall be paid or provided to, or be exercisable by, as the case may be, his
estate, personal representative or guardian.
3. COOPERATION; RECORDS; CONFIDENTIALITY. During the Severance Period,
Berrard agrees to make himself available to AutoNation and its officers for
consultation on a reasonable basis from time to time as to any and all matters
which he worked on while an officer of AutoNation, provided that AutoNation
shall reimburse Berrard for his reasonable expenses incurred in providing such
consultation and making himself available, including attorney's fees and costs,
if necessary (e.g., if Berrard is required to be deposed as a witness in any
litigation involving AutoNation). AutoNation acknowledges that Berrard may
engage in other full-time employment and AutoNation agrees that it will use its
best efforts to attempt to minimize the amount of time which it shall require of
him. Berrard agrees that all confidential records, files and documents of
AutoNation shall remain in AutoNation's possession and that he shall not remove
any of the same from AutoNation's premises, without the prior consent of
AutoNation. At all times hereafter, Berrard agrees to maintain the
confidentiality of all proprietary, secret, confidential and other non-public
information concerning AutoNation, including without limitation, any management,
sales, promotional or marketing plans, programs, techniques, practices or
strategies, any expansion plans in existing or new markets or for new or
expanded products, services or lines of business, and any financial statements,
monthly operating reports, budgets, projections and other financial information.
Neither Berrard nor AutoNation shall publicly disclose the contents of this
Agreement, except to the extent required under applicable law.
4. NO RIGHT TO GIVE INTERVIEWS OR WRITE BOOKS, ETC. During the Severance
Period, except as authorized by AutoNation, Berrard shall not give any
interviews or speeches primarily concerning AutoNation, nor shall Berrard,
directly or indirectly, prepare or assist any person or entity in the
preparation of any books, articles, television or motion picture productions or
other creations concerning AutoNation, including, without limitation, any
material concerning any person, whether or not fictional, whom any member of the
public might associate with AutoNation (regardless of whether or not there shall
appear any disclaimer purporting to disassociate such fictitious person from
AutoNation). Notwithstanding the foregoing, Berrard may publicly state factual
information about his employment with AutoNation in providing others with
background and resume information about himself, in public filings with the SEC
when required with respect to other issuers
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for which such disclosure about him is required, and in similar contexts, in all
cases consistent with the information set forth in the press release referred to
in paragraph 9 below. During the Severance Period and thereafter, Berrard agrees
that he shall not, in any communications with any third party, criticize,
ridicule or make any statement which disparages or is derogatory of AutoNation
or any of AutoNation's affiliates or any of its or their officers, directors,
agents or employees, and AutoNation agrees that it shall not, in any
communications with any third party, criticize, ridicule or make any statement
which disparages or is derogatory of Berrard.
5. FULL SATISFACTION AND RELEASES. The parties agree that, except as
otherwise provided in this Agreement, this Agreement xxxxxx all relationships
between them and shall act as a mutual release of all claims of any nature which
one party may have against the other party as of the Effective Date, except that
the following claims shall not be released hereby: (i) claims by either party
against the other under or pursuant to this Agreement, (ii) claims by Berrard
under applicable law in respect of statutory employment rights (such as COBRA or
ERISA claims), and (iii) claims or rights of Berrard under law or AutoNation's
certificate of incorporation and bylaws to indemnification against third party
claims arising with respect to his service as an officer and director of
AutoNation prior to the Effective Date. AutoNation agrees to maintain its
existing or substantially comparable directors and officers insurance coverage
in place for at least five years following the Effective Date, to the extent the
premiums therefor are not more than 200% of the cost of existing premiums, and
agrees to keep the same or broader indemnification rights in place under its
bylaws for at least five years following the Effective Date, to the extent
allowed by applicable law.
6. SEC FILING. Berrard shall timely file a Form 4 with the Securities and
Exchange Commission reporting that he is no longer an executive officer of
AutoNation as of the Effective Date. After the Effective Date, AutoNation shall
cease to refer to or include Berrard as an executive officer in any of its SEC
filings or press releases.
7. SUCCESSOR. Berrard shall assist in the recruitment and selection of a
successor (other than H. Xxxxx Xxxxxxxx) who will serve as AutoNation's Chief
Exeuctive Officer, to the extent requested by the Chairman or any committee of
the board of directors of AutoNation formed for that purpose.
8. BOARD SERVICE. Berrard shall continue to serve as a member of the Board
of Directors of AutoNation and shall be a non-executive Vice Chairman of the
Board, provided that he may resign at any time by notice to the Chairman after
the Effective Date.
9. PRESS RELEASE. Berrard and AutoNation shall mutually agree on the text
of any press release to be issued by AutoNation to announce the termination of
his employment with AutoNation, but he acknowledges that AutoNation shall have
final control over the timing of such press release.
10. NON-COMPETE AND NON-SOLICITATION. Berrard agrees that for a period of
three (3) years following the Effective Date, except with the prior written
consent of AutoNation, Berrard shall not
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directly or indirectly (whether individually or as a partner, joint venturer,
officer, director, employee, consultant, agent, independent contractor or
stockholder of or lender to any company or business entity or otherwise), for
any reason:
(a) engage in any automotive consumer business in any market in the
United States, including franchised automotive dealerships, used
vehicle dealerships, automotive maintenance, parts, collision repair,
salvage or auction businesses, internet or other e-commerce businesses
which sell, market, generate sales leads for, finance or insure retail
vehicles, or vehicle rental businesses (collectively, the "Automotive
Business"); or
(b) request, advise or induce any material customer or material
vendor of the AutoNation Group to withdraw, curtail or cancel any such
customer's or vendor's business with the AutoNation Group; or
(c) (i) solicit for employment, or knowingly permit any company or
business directly or indirectly controlled by or affiliated with him to
solicit for employment, any person who is employed in Fort Lauderdale,
Florida by the AutoNation Group at that time, or in any manner seek to
induce any such person to leave his or her employment with the
AutoNation Group, or (ii) employ, or permit any company or business
directly or indirectly controlled by or affiliated with him to employ,
any person who is employed in Fort Lauderdale, Florida by the
AutoNation Group at that time or who was so employed within one year
prior to that time, provided, however, that Berrard, or any company or
business directly or indirectly controlled by him, may employ any
person at any time after such person has been terminated (with or
without cause) by AutoNation. For purposes hereof, "controlled by or
affiliated with" shall mean any company or business, including, but not
limited to, New River Capital Partners and Xxxxxx Xxxxxxx, Inc., for
which and so long as Berrard both (i) beneficially owns more than 10%
of the outstanding equity, including for purposes of such calculation
the underlying shares of all options, warrants, convertible securities
and other rights to purchase securities held by Berrard, AND (ii) is a
general partner, director or executive officer. Berrard agrees to have
written policies in place at companies or businesses that are
controlled by or affiliated with him that such companies or businesses
are not to solicit or employ persons in contravention of this paragraph
10(c). In the event Berrard or a company or business controlled by or
affiliated with him hires a current or former employee of AutoNation in
violation of this paragraph 10(c), AutoNation shall provide prompt
written notice to Berrard, and if such employee is not terminated by
the company or business controlled by or affiliated with Berrard within
thirty (30) days following the date of such notice, then AutoNation
shall only have the right to cease making any further payments of
severance compensation to Berrard pursuant to paragraph 2(a) above and
the right to seek injunctive relief, but shall not have the right to
seek other relief (including damages).
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Notwithstanding the foregoing, (i) Berrard's beneficial ownership of
less than five percent (5%) of the outstanding shares of stock of any
corporation having a class of equity securities actively traded on a national
securities exchange or over-the-counter market, including for purposes of such
calculation the underlying shares of all options, warrants, convertible
securities and other rights to purchase securities held by Berrard, shall not be
deemed, in and of itself, to violate the prohibitions of paragraph 10(a), (ii)
if any business or company (on a consolidated basis with all of its
majority-owned subsidiaries) derives less than five percent (5%) of its annual
revenue from the Automotive Business as defined above, such business or company
shall not be deemed for purposes of paragraph 10(a) to be engaged in the
Automotive Business, (iii) if Berrard beneficially owns or acquires less than
25% of a privately-held business or company, which is not engaged in the
Automotive Business, and he is at all times a passive investor with no board
representation, management authority or other special rights to control
operations of such business or company, and such business or company enters the
Automotive Business and winds up deriving more than five percent (5%) of its
annual revenue from the Automotive Business, then Berrard shall sell, transfer
or otherwise divest himself of his beneficial ownership in such business or
company within six months or else he shall be deemed to be in violation of
paragraph 10(a), (iv) Berrard, or any company or business directly or indirectly
controlled by him, may solicit for employment and employ Xxx Xxxxxxxx at any
time, and (v) Berrard may directly or indirectly invest in any business
(provided paragraphs 10(a), (b) and (c) above are complied with) together with
any present or former director, officer, agent or employee of AutoNation or
otherwise engage in arm's length business transactions with such persons.
11. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof. It
supersedes all prior negotiations, letters, agreements and understandings
relating to the subject matter hereof.
(b) CHOICE OF LAW. This Agreement will be interpreted, construed and
enforced in accordance with the laws of the State of Florida.
(c) EFFECT OF WAIVER. The failure of any party at any time or times to
require performance of any provision of this Agreement will in no manner affect
the right to enforce the same. The waiver by any party of any breach of any
provision of this Agreement will not be construed to be a waiver by any such
party of any succeeding breach of that provision or a waiver by such party of
any breach of any other provision.
(d) SEVERABILITY. The invalidity, illegality or unenforceability of any
provision or provisions of this Agreement will not affect any other provision of
this Agreement, which will remain in full force and effect, nor will the
invalidity, illegality or unenforceability of a portion of any provision of this
Agreement affect the balance of such provision. In the event that any one or
more of the provisions contained in this Agreement or any portion thereof shall
for any reason be held to be
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invalid, illegal or unenforceable in any respect, this Agreement shall be
reformed, construed and enforced as if such invalid, illegal or unenforceable
provision had never been contained herein.
(e) EXCLUSIVE VENUE AND JURISDICTION. Any suit, action or proceeding
with respect to this Agreement shall be brought in the courts of Broward County
in the State of Florida or in the U.S. District Court for the Southern District
of Florida. The parties hereto hereby accept the exclusive jurisdiction of those
courts for the purpose of any such suit, action or proceeding.
(f) BINDING NATURE. This Agreement will be binding upon the parties and
will inure to the benefit of any successor or successors of AutoNation. This
Agreement is not assignable by Berrard.
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
(h) NOTICES. All notices which either party shall be required or
permitted to make or give under this Agreement shall be in writing and shall be
sufficiently made or given if sent by personally delivery, by certified mail,
return receipt requested or by nationally recognized overnight courier service,
addressed as set forth below, unless a notice of a change of address has been
previously given in accordance with the foregoing:
If to Berrard: Xxxxxx X. Xxxxxxx
New River Capital Partners
One Financial Plaza, Suite 1101
One X.X. Xxxxx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
With a copy to: Kozyak & Xxxxxxxxxxxx, P.A.
2800 First Union Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
If to AutoNation: AutoNation, Inc.
000 X.X. 0xx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attn: Chairman
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With a copy to: AutoNation, Inc.
000 X.X. 0xx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attn: General Counsel
(i) ARM'S LENGTH NEGOTIATIONS. Each party herein expressly represents
and warrants to the other that (a) before executing this Agreement, said party
has fully informed itself of the terms, contents, conditions and effects of this
Agreement; (b) said party has relied solely and completely upon its own judgment
in executing this Agreement; (c) said party has had the opportunity to seek and
has obtained the advice of its own counsel before executing this Agreement; (d)
said party has acted voluntarily and of its own free will in executing this
Agreement; (e) said party is not acting under duress, whether economic or
physical, in executing this Agreement; and (f) this Agreement is the result of
arm's length negotiations conducted by and among the parties and their
respective counsel.
[signatures on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
AUTONATION, INC.
By: /s/ H. XXXXX XXXXXXXX
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H. Xxxxx Xxxxxxxx,
Chairman
/s/ XXXXXX X. XXXXXXX
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XXXXXX X. XXXXXXX
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