EXHIBIT 10.8
SEVERANCE PAY AGREEMENT
FOR KEY EMPLOYEE
This agreement is entered into as of April 3, 2001 between Xxxxxx Automotive
Group L.L.C. ("Xxxxxx") and Xxxxxx X. Xxxxxxx ("Executive"), a key employee of
Xxxxxx, in order to provide for an agreed-upon compensation in the event that
the Executive's employment is terminated as defined in this agreement.
1. Severance Pay Arrangement
If a Termination (as defined below) of Executive's employment occurs at any
time during Executive's employment, Xxxxxx will pay Executive 12 months of
Executive's base salary as of the date of Termination as Severance Pay.
Payment (subject to required withholding) will be made by Xxxxxx to Executive
monthly on the regular payroll dates of Xxxxxx starting with the date of
Termination.
If Executive participates in a bonus compensation plan at the date of
Termination, Severance Pay will also include a portion of the target bonus
for the year of Termination in an amount equal to the target bonus multiplied
by the percentage of such year that has expired through the date of
Termination.
In addition, Executive shall be entitled for 12 months following the date of
Termination to continue to participate at the same level of coverage and
Executive contribution in any health and dental insurance plans, as may be
amended from time to time, in which Executive was participating immediately
prior to the date of Termination. Such participation will terminate 30 days
after Executive has obtained other employment under which Executive is
covered by equal benefits. The Executive agrees to notify Xxxxxx promptly
upon obtaining such other employment.
2. Definition of Termination Triggering Severance Pay
A "Termination" triggering the Severance Pay set forth above in Section 1 is
defined as (1) termination of Executive's employment by Xxxxxx for any
reason, except death, disability, retirement, voluntary resignation or
"cause", or (2) termination by Executive because of mandatory relocation of
Executive's current principal place of
business to a location more than 50 miles away, or (3) Xxxxxx'x reduction of
Executive's base salary, or (4) any material diminution of Executive's duties
or job title, except in a termination for "cause", death, disability,
retirement or voluntary resignation. The definition of "cause" is: (1)
Executive's gross negligence or gross misconduct in carrying out Executive's
duties resulting in either case in material harm to Xxxxxx; or (2) Executive
being convicted of a felony; or (3) Executive's breach of Sections 3, 4 or 5
below.
3. Confidential Information Nondisclosure Provision
During and after employment with Xxxxxx, Executive agrees not to disclose to
any person (other to an employee or director of Xxxxxx or any affiliate and
except as may be required by law) and not to use to compete with Xxxxxx or
any affiliate any confidential or proprietary information, knowledge or data
that is not in the public domain that was obtained by Executive while
employed by Xxxxxx with respect to Xxxxxx or any affiliate or with respect to
any products, improvements, customers, methods of distribution, sales,
prices, profits, costs, contracts, suppliers, business prospects, business
methods, techniques, research, trade secrets or know-how of Xxxxxx or any
affiliate (collectively, "Confidential Information"). In the event that
Executive's employment ends for any reason, Executive will deliver to Xxxxxx
all documents and data of any nature pertaining to Executive's work with
Xxxxxx and will not take any documents or data or any reproduction, or any
documents containing or pertaining to any Confidential Information. Executive
agrees that in the event of a breach by Executive of this provision, Xxxxxx
shall be entitled to inform all potential or new employers of this provision
and obtain injunctive relief and damages which may include recovery of
amounts paid to Executive under this agreement.
4. Non-Solicitation of Employees
Executive agrees that for a period of one year from Executive's last day of
employment with Xxxxxx, Executive shall not directly or indirectly solicit
for employment or employ any person who, at any time during the preceding 12
months, is or was employed by Xxxxxx or any affiliate or induce or attempt to
persuade any employee of Xxxxxx or any affiliate to terminate their
employment relationship. Executive agrees that in the event of a breach by
Executive of this provision, Xxxxxx shall be entitled to inform all potential
or new employers of this provision and obtain injunctive relief and damages
which may include recovery of amounts paid to Executive under this agreement.
5. Covenant Not to Compete
While Executive is employed by Xxxxxx, Executive shall not directly or
indirectly engage in, participate in, represent or be connected with in any
way, as an officer, director, partner, owner, employee, agent, independent
contractor, consultant, proprietor or stockholder (except for the ownership
of a less than 5% stock interest in a publicly-traded corporation) or
otherwise, any business or activity which competes with the business of
Xxxxxx or any affiliate unless expressly consented to in writing by the Chief
Executive Officer of Xxxxxx (collectively, "Covenant Not To Compete").
In the event that Executive's employment ends for any reason, the provisions
of the Covenant Not To Compete shall remain in effect for one year following
the date of Termination except that the prohibition above on "any business or
activity which competes with the business of Xxxxxx or any affiliate" shall
be limited to Autonation, Sonic, Lithia, United Auto Group and other
competitive groups of similar size. Executive shall disclose in writing to
Xxxxxx the name, address and type of business conducted by any proposed new
employer of Executive if requested in writing by Xxxxxx. Executive agrees
that in the event of a breach by Executive of this Covenant Not To Compete,
Xxxxxx shall be entitled to inform all potential or new employers of this
Covenant and to obtain injunctive relief and damages which may include
recovery of amounts paid to Executive under this agreement.
GENERAL PROVISIONS
A. Employment is At Will
The Executive and Xxxxxx acknowledge and agree that Executive is an "at
will" employee, which means that either the Executive or Xxxxxx may
terminate the employment relationship at any time, for any reason, with or
without cause or notice, and that nothing in this agreement shall be
construed as an express or implied contract of employment.
B. Execution of Release
As a condition to the receipt of the Severance Pay payments and benefits
described in section 1 above, Executive agrees to execute a release of all
claims arising out of the Executive's employment or its termination
including but not limited to any claim of discrimination, harassment or
wrongful discharge under local, state or federal law.
C. Other Provisions
This agreement shall be binding upon the heirs, executors, administrators,
successors and assigns of Executive and Xxxxxx, including any successor to
Xxxxxx.
The headings and captions are provided for reference and convenience only
and shall not be considered part of this agreement.
If any provision of this agreement shall be held invalid or unenforceable,
such holding shall not affect any other provisions, and this agreement
shall be construed and enforced as if such provisions had not been
included.
This agreement supersedes any and all agreements between Xxxxxx and
Executive relating to payments upon termination of employment or severance
pay and may only be modified in writing signed by Xxxxxx and Executive.
This agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut.
AGREED TO AS OF THE DATE FIRST WRITTEN ABOVE:
BY EXECUTIVE BY XXXXXX AUTOMOTIVE
GROUP L.L.C.
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxxx
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Print Name: Print Name and Title:
Xxxxxx X. Xxxxxxx Xxxxx X. Xxxxxxxx
President & Chief Executive Officer
