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EXHIBIT 10.34
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of May 8,
1996 by and among Republic Industries Inc., a Delaware corporation, and its
assigns (the "Company"), and Xxxxxx X. Xxxxxxx ("Employee").
RECITALS
On the date hereof, the Company entered into a Merger Agreement with
AutoNation Incorporated, a Florida corporation ("AutoNation") and certain other
parties pursuant to which AutoNation will become a wholly-owned subsidiary of
the Company, and the Company also entered into a Loan Agreement with AutoNation
pursuant to which the Company has committed to loan to AutoNation all of
AutoNation's cash requirements for a period of several months pending closing
of the transactions contemplated by the Merger Agreement. The Employee
currently is employed by AutoNation as its President and Chief Executive
Officer. AutoNation is developing a vehicle retailing business and related
businesses. Pending the closing of the Company's acquisition of AutoNation, the
Company (a) may acquire other businesses which are engaged in used vehicle
retailing or related lines of business, (b) will need to consult with financial
analysts, investors, the media, and other interested persons about AutoNation
and the vehicle retailing industry, and (c) will be loaning substantial sums to
AutoNation pursuant to the Loan Agreement. Accordingly, the Company desires to
have the Employee available to perform services relating to the foregoing from
time to time, and is willing to compensate Employee for such services pending
the closing of the Company's acquisition of AutoNation.
TERMS OF AGREEMENT
In consideration of the premises, the parties hereto agree as follows:
1. Employment. The Company agrees to employ Employee as a Vice
President and Employee agrees to be so employed. Until the closing of the
Company's acquisition of AutoNation, the Employee also shall continue to be
employed by AutoNation. In consideration of Employee's services hereunder, the
Company shall assume from AutoNation the obligation to pay to the Employee the
annual bonus due to such Employee pursuant to the terms of Employee's
employment with AutoNation in an amount not to exceed 25% of the Employee's
base salary with AutoNation (which base salary currently is $750,000), to be
paid at such time as AutoNation normally pays its bonuses. Employee also shall
be entitled to such benefits as may be offered to comparable employees of the
Company from time to time, except for benefits (such as group health insurance)
which are duplicative of or substantially similar to benefits provided to
Employee by AutoNation. In
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addition, the Company hereby grants to the Employee options to purchase 214,286
shares of common stock, $0.01 par value, of the Company pursuant to the
Company's 1995 Employee Stock Option Plan (the "Plan") at an exercise price of
$35.00 per share (being the closing price per share of the Company's common
stock on May 7, 1996), subject to adjustment for any stock splits or dividends
set forth in the Plan. Such options shall vest over a four period, and so long
as the Employee remains an employee of the Company, 25% of such options shall
be exercisable on May 8 of each of 1997, 1998, 1999 and 2000, and all options
shall otherwise be subject to all terms and conditions of the Plan.
In the event that the Merger Agreement is terminated, then, effective
as of the date the Merger Agreement is terminated, at the Company's option, (i)
the Employee's employment and obligations hereunder shall be terminated, (ii)
the Company's obligation to pay the Employee's bonus shall be assigned back to
AutoNation, and (iii) all stock options granted to Employee to purchase shares
of the Company's common stock shall be terminated. Upon termination of the
Merger Agreement, the Company shall indemnify and hold Employee harmless from
and against any and all claims, losses, liabilities and damages of any kind
whatsoever incurred or suffered as a result of or arising out of Employee's
status as an Employee of the Company.
2. Termination.
(a) For Cause. At any time the Company shall have the right to
terminate the employment of the Employee hereunder, and to discharge the
Employee for "cause" as hereinafter defined. Upon any such termination by the
Company, the Employee or his legal representatives shall not be entitled to
receive any additional compensation hereunder. Termination for "cause" shall
mean termination because of (i) termination of Employee's employment with
AutoNation (or any subsidiary thereof) for any reason, (ii) the Employee's
material breach of his covenants contained in this Agreement, (iii) the
Employee's repeated failure or refusal to perform the duties and
responsibilities required to be performed by the Employee hereunder, after
having received written notice thereof, (iv) the commission by the Employee of
an act of dishonesty affecting the Company or an act constituting common law
fraud or a felony, the result of which the Company shall have been materially
adversely affected, (v) the commission by the Employee of an act (other than
good faith exercise of business judgment in the exercise of his managerial
responsibilities) resulting in material damage to the Company, (vi) the
Employee's death, or (vii) the Employee's inability to perform his duties and
responsibilities as provided herein due to his physical or mental disability or
sickness extending for, or reasonably expected to extend for, greater than
three months. Any resignation or other termination of this Agreement by the
Employee shall be deemed a termination for "cause."
(b) Without Cause. At any time, the Company shall have the right
to terminate the Employee, and to discharge the Employee without cause,
effective upon 30 days' prior written notice to the Employee. Upon the
termination of this Agreement without cause, the Employee shall continue to be
entitled to be eligible to receive his bonus for the year in which such
termination occurs, when and as the same would have been payable hereunder
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but for such termination, provided that the Employee shall only be entitled to
such payment as long as he is in compliance with the provisions of Paragraph 3
hereof. Stock options which have vested at the time of termination without
cause, if any, shall be exercisable as provided for in the Plan and unvested
options, if any, shall continue to vest until fully vested.
(c) Termination Upon Merger. Unless otherwise earlier terminated
pursuant to the terms of this Agreement, effective upon consummation of the
Merger contemplated by the Merger Agreement, this Agreement shall automatically
terminate. Notwithstanding such termination of this Agreement, the stock
options granted to Employee shall remain outstanding and shall continue to be
governed by the Plan.
3. Restrictive Covenants. In consideration of the foregoing, upon the
Company's request, Employee agrees to execute a confidentiality agreement and a
covenant not to compete agreement with the Company, in form and substance
substantially the same as is executed by all other executive employees of the
Company from time to time.
4. Notice. Any notice hereunder shall be deemed given upon hand
delivery or two days after it has been mailed by certified mail, postage
prepaid, as follows:
To the Company:
Republic Industries, Inc.
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, General Counsel
and Senior Vice President
To Employee:
Xxxxxx X. Xxxxxxx
AutoNation Incorporated
Xxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
Either party may from time to time by written notice to the other as
provided above designate another address which shall be the new address for
such notices
5. Miscellaneous. All modifications and changes to this Agreement
shall be in writing and signed by both parties. This Agreement shall be
construed and enforced in accordance with the laws of the State of Florida.
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior written and oral
agreements and understandings.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
REPUBLIC INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Senior Vice President
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Agreed and Acknowledged:
AUTONATION INCORPORATED
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
Senior Vice President
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