|
Exhibit
10.9
SEVERANCE PAY
AGREEMENT
FOR KEY EMPLOYEE
Reference is made to that certain
agreement (the “ Agreement ”) entered into as of
August 1, 2005 between Asbury Automotive Group, Inc. and its
subsidiaries and affiliates (“ Asbury ”) and
Brett Hutchinson (“ Executive ”), a key employee
of Asbury, which provides for an agreed-upon compensation in the
event that there is a Termination (as defined below) of
Executive’s employment with Asbury. The parties hereto agree
to amend and restate such Agreement as hereinafter
provided.
| 1. |
Severance Pay Arrangement |
If a Termination (as defined
below) of Executive’s employment occurs at any time during
Executive’s employment, Asbury 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 Asbury to Executive monthly on the regular payroll dates of
Asbury 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, for 12 months
following the date of Termination, Executive shall be entitled 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 Asbury promptly upon obtaining such
other employment. At the end of 12 months, Employee, at his or her
option, may elect to obtain COBRA coverage in accordance with the
terms and conditions of applicable law and Asbury’s standard
policy.
Notwithstanding anything
herein to the contrary, if Executive is determined to be a
“specified employee” within the meaning of
Section 409A of the Internal Revenue
Code of 1986, as amended the
(“ Code ”) and if one or more of the payments or
benefits to be received by Executive pursuant to this Agreement
would be considered deferred compensation subject to
Section 409A of the Code, then no such payment shall be made
or benefit provided until six (6) months following
Executive’s date of Termination.
| 2. |
Definition of Termination Triggering Severance
Pay |
A “ Termination
” triggering the Severance Pay set forth above in
Section 1 is defined as a termination of Executive’s
employment with Asbury (1) by Asbury without
“cause”, or (2) by Executive because of (x) a
material change in the geographic location at which Executive must
perform Executive’s services (which shall in no event include
a relocation of Executive’s current principal place of
business to a location less than 50 miles away), (y) a
material diminution in Executive’s base compensation, or
(z) a material diminution in Executive’s authority,
duties, or responsibilities. For avoidance of doubt, a
“Termination” shall not include a termination of
Executive’s employment by Asbury for “cause” or
due to Executive’s, death, disability, retirement or
voluntary resignation.
For the purposes of this
Agreement, the definition of “ cause ” is:
(a) Executive’s gross negligence or serious misconduct
(including, without limitation, any criminal, fraudulent or
dishonest conduct) that is or may be injurious to Asbury; or
(b) Executive being convicted of, or entering a plea of nolo
contendere to, any crime that constitutes a felony or involves
moral turpitude; or (c) Executive’s breach of Sections
3, 4 or 5 below; or (d) Executive’s willful and
continued failure to perform Executive’s duties on behalf of
Asbury; or (e) Executive’s material breach of a written
policy of Asbury. For purposes of this Agreement, the definition of
“ disability ” is a physical or mental
disability or infirmity that prevents the performance by Executive
of his or her duties lasting (or likely to last, based on competent
medical evidence presented to Asbury) for a continuous period of
six months or longer.
“ Change of
Control ” is defined in accordance with the definition of
such term in Asbury’s 2002 Equity Incentive Plan, as such
plan may be amended from time to time.
| 3. |
Confidential Information and Nondisclosure
Provision |
As a condition to the receipt
of the Severance Pay payments and benefits described in
Section 1 above, during and after employment with Asbury,
Executive shall agree not to disclose to any person (other than to
an employee or director of Asbury, or to Asbury’s attorneys,
accountants and other advisors or except as may be required by law)
and not use to compete with Asbury any confidential or proprietary
information, knowledge or data that is not in the public domain
that was obtained by Executive while employed by Asbury regarding
Asbury or 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 Asbury (collectively, “
Confidential Information ”). In the event that
Executive’s employment terminates for any reason, Executive
will deliver to Asbury on or before the date of Termination all
documents and data of any nature pertaining to Executive’s
work with Asbury 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, Asbury shall be entitled to
inform all potential or new employers of such breach and to cease
payments and benefits that would otherwise be made pursuant to
Section 1 above, as well as to obtain injunctive relief and
damages which may include recovery of amounts paid to Executive
under this Agreement.
|
