Exhibit 10.13
SEVERANCE AGREEMENT AND FULL RELEASE
This Severance Agreement and Full
Release (“Agreement”) is made and entered into this
30th day of April 2007 (“Execution Date”) by and
between Hugh E. Sawyer (“Executive”) and Allied
Holdings, Inc., a Georgia corporation
(“Company”).
WHEREAS, Executive has been employed
by Company as its President and Chief Executive Officer under the
terms of a written employment agreement dated June 4, 2001, as
amended (“Executive’s Employment Agreement”),
and
WHEREAS, Company and certain of its
affiliates (collectively “Allied”) are presently in
bankruptcy proceedings in the United States Bankruptcy Court for
the Northern District of Georgia, and
WHEREAS, A Plan of Reorganization
(the “Plan”) proposed by Allied, Yucaipa American
Alliance Fund I, LP and Yucaipa American Alliance (Parallel) Fund
I, LP, and by Teamsters National Automobile Transportation Industry
Negotiating Committee is proceeding to confirmation, and
WHEREAS, the Plan is conditioned upon
Company’s terminating Executive’s employment on or
before the date when the Plan of Reorganization becomes effective
(“Emergence Date”), and
WHEREAS, consistent with the
Plan’s requirements, the Company has decided as of the
Execution Date to terminate Executive’s employment without
good cause and without executive’s consent, but desires to
retain the services of Executive for some period of time
thereafter, but in no event after the Emergence Date, and
WHEREAS, Executive has agreed to
accept the severance benefit provided for in the Allied Holdings,
Inc. Amended Severance Pay and Retention and Emergence Bonus Plan
for Key Employees dated as of August 1, 2005 (the
“KERP”), in lieu of any other severance benefits to
which he might otherwise be entitled under the Executive’s
Employment Agreement or otherwise;
NOW, THEREFORE, for and in
consideration of the mutual promises and agreements hereinafter set
forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties mutually
agree as follows:
1. Termination of Employment
The Company hereby terminates
Executive’s employment without Cause (as defined in the KERP)
and without Executive’s consent. Such termination shall
become effective (“Effective Date”) as of the Emergence
Date or on such earlier date after June 1, 2007 as Company
determines, in its sole discretion, is in the best interests of
Company. The parties
agree
that Executive’s Employment Agreement is hereby cancelled and
of no further effect as of the Execution Date. Following the
Execution Date, Executive shall be employed at will and nothing
contained herein shall create any contract of employment for a
definite term.
2. No Admission by Company
Company and Executive agree that the
entry of the parties into this Agreement is not and shall not be
construed to be an admission of liability or wrongdoing on the part
of Company.
3. Continuation of Compensation and
Benefits
Company agrees to compensate
Executive for services rendered after the Execution Date until the
Effective Date (“Transitional Period”) at the
semi-monthly rate of $29,166.67, subject to ordinary and lawful
deductions. During the Transitional Period, Company further agrees
to provide Executive with insurance coverage, other benefits of
employment, and business expense reimbursement to the same extent
as Executive enjoyed prior to the Execution Date.
4. Future Cooperation
Executive agrees that Executive will
make himself reasonably available after the Effective Date upon
reasonable notice by Company or its designated representatives for
the purposes of: (1) Providing information regarding the projects,
files and/or customers with whom Executive worked for the purpose
of transitioning such projects, files and/or customers to other
Company executives as the result of Executive’s termination;
(2) Providing information and/or testimony regarding any other
matter, file, project and or customers with whom Executive was
involved while employed by Company; provided however that Company
shall advance to Executive all costs and expenses that are
associated with Executive making himself available pursuant to this
Section 4. Executive agrees to provide future cooperation
pursuant to this Section 4 without compensation so long as
Executive is not called upon by the Company to spend more than two
hours during the first week following the Effective Date. If the
Company desires to call upon Executive to spend time in excess of
these two hours for services other than testimony, Executive agrees
to make himself reasonably available upon reasonable notice in
return for compensation to Executive at the rate of $347.00 per
hour for an additional period, not to exceed eight additional
hours. If the Company desires to call upon Executive to spend time
in excess of these limits for services other than testimony, the
Company agrees that the Executive will not be required to spend
such excess time unless the Executive and the Company are able to
reach a further agreement concerning such services (including the
scheduling of such services and the compensation to be paid to
Executive for such services) upon terms that are mutually agreeable
to Executive and the Company.
Executive agrees that notwithstanding
Executive’s termination on the Effective Date, Executive will
thereafter make himself reasonably available upon reasonable notice
by Company or its designated representatives without compensation
for the purpose of testimony.
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5. Severance Payment to Executive
So long as Executive does not elect
to revoke this Agreement within the seven-day period following the
Execution Date as provided in Section 19, Company shall, as
required by the KERP, pay Executive a lump sum of one million fifty
thousand dollars ($1,050,000), subject to ordinary and lawful
deductions by wire transfer on the eighth day after the Execution
Date. Executive acknowledges that this is consideration to which
Executive would not otherwise be entitled absent execution of this
Agreement.
6. Retirement and COBRA Rights
Nothing in this Agreement
shall:
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a. |
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alter or reduce any vested, accrued benefits (if any) to which
Executive may be entitled under any retirement or 401(k) plan
established by Company. |
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b. |
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affect Executive’s right to elect and pay for
continuation of Executive’s health insurance coverage under
the Company’s health benefit plan after the Effective Date
pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”). |
7. Executive’s Full Release of All Claims
Against Company
In consideration for the undertakings
and promises of Company set forth in this Agreement and except for
the obligations of the Company hereunder, Executive unconditionally
releases, discharges, and holds harmless Company, its corporate
affiliates, successors and assigns, and their respective officers,
directors, shareholders, employees, agents, insurers and attorneys
as individuals (collectively referred to as
“Releasees”), from each and every claim, cause of
action, right, liability or demand of any kind and nature, and from
any claims which may be derived therefrom (collectively referred to
as “Released Claims”), that Executive had, has, or
might claim to have against Releasees on or before the date that
Executive executes this Agreement, including but not limited to any
and all claims:
a. related to or arising out of
Executive’s Employment Agreement, pay, bonuses, vacation or
any other employee benefits, and other terms and conditions of
employment or employment practices of Company;
b. related to or arising out of
the termination of Executive’s employment with Company or the
surrounding circumstances thereof;
c. based on discrimination or
harassment on the basis of race, color, religion, sex, national
origin, handicap, disability, age or any other category protected
by law under Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, Executive Order 11246, the Age Discrimination
in Employment Act, the Older Workers Benefits Protection Act, the
Equal Pay Act, the Americans With Disabilities Act, the Equal Pay
Act, the Americans With Disabilities Act, the Rehabilitation Act of
1973, the Consolidated Omnibus Budget Reconciliation Act of
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1985,
(as any of these laws may have been amended) or any other similar
labor, employment or anti-discrimination law under state, federal
or local law;
d. based on any contract, tort,
whistleblower, personal injury wrongful discharge theory or other
common law theory.
8. Executive’s Covenant Not to Sue or Accept
Recovery
Executive covenants not to sue
Company or any Releasee on account of any Released Claims, or to
incite, assist or encourage others to bring
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