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 Jeffrey T. Gray
(“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:
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1.
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Recitals . The parties hereto agree
that the foregoing recitals in this Agreement are true and
accurate.
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2.
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Discharge of Severance Obligations .
Advance shall pay to Employee and Employee accepts from Advance the
following:
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2.01.
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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.
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(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.
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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.
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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.
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Outplacement services for 12 months shall be
provided to Employee under the Executive Program by Lee Hecht
Harrison to include consulting, search support and administrative
services.
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3.
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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.
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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.
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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 Empl
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