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Separation Agreement

This is an actual contract by Asbury Automotive Group.

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Sectors: Specialty Retail
Governing Law: Delaware, View Delaware State Laws
Effective Date: October 15, 2004
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SEPARATION AGREEMENT
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THIS SEPARATION AGREEMENT ("Agreement") is made this 15th day of October, 2004 (the "Effective Date"), by and among Asbury Automotive Group, Inc., a Delaware corporation ("Asbury"), Ben David McDavid, Sr. ("McDavid Sr."), Ben David McDavid, Jr. ("David Jr."), and James McDavid ("James") (McDavid Sr., David Jr. and James are sometimes referred to collectively as the "Executives").


BACKGROUND


1. Asbury owns, indirectly, a group of retail automotive dealerships located
in Texas, which are known collectively as the "David McDavid Auto Group"
(the "McDavid Group").


2. From May 1, 1998 through July 29, 2003, Asbury Texas Management L.L.C., an
indirect wholly-owned subsidiary of Asbury ("Texas Management"), employed
McDavid Sr. as the President and CEO of the McDavid Group. As of July 30,
2003, McDavid Sr. ceased to be the President and CEO of the McDavid Group.


3. From May 1, 1998 through July 29, 2003, Texas Management also employed
David Jr. and James in various capacities. As of July 30, 2003, David Jr.
and James ceased to be employees of the McDavid Group.


4. The parties have agreed to enter into this Agreement to resolve any
disputes and controversies by and among them arising out of their
respective employment relationships.


NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter provided, and intending to be legally bound hereby, the parties agree as follows:


1. Termination of Employment. The parties hereby confirm that the Executives
left their employment with Texas Management and the McDavid Group as of
July 30, 2003.


2. Officers. Each of the Executives confirms that he no longer serves as an
officer of Asbury, or any of its subsidiaries or affiliates, including,
without limitation, the entities comprising the McDavid Group. If requested
by Asbury, the Executives will each deliver written acknowledgments that,
effective as of July 30, 2003, they ceased all offices of Asbury and any of
its subsidiaries and affiliates.


3. Severance Payments. In exchange for signing and not revoking the General
Release (as defined in Section 11 below) and the Executives' other
obligations under this Agreement, Asbury agrees to pay an aggregate of One
Million Five Hundred Thousand Dollars ($1,500,000) to the Executives in
lump sum payments, less applicable withholding and taxes, as follows: Two
Hundred Thousand Dollars ($200,000.00) to McDavid Sr., Six Hundred Fifty
Thousand Dollars ($650,000.00) to David Jr., and Six Hundred Fifty Thousand
Dollars ($650,000.00) to James (each, a "Severance Payment" and
collectively, the "Severance Payments"). Each of the Severance Payments
will be paid promptly upon Asbury's receipt of the signed General Releases
from all of the Executives and the expiration of the 7-day revocation
period following execution. For the avoidance of doubt, if any of the
Executives fails to sign and deliver, or revokes, his respective General
Release, then none of the Executives will be paid their respective
Severance Payments. David Jr. and James each acknowledge that, but for
Asbury's agreement to pay them the Severance Payments set forth herein,
they would not otherwise be entitled to any severance payments or benefits
in connection with the termination of their employment with Texas
Management and accordingly, the Severance Payments, among other things, are
good and valuable consideration for their respective obligations under this
Agreement.


4. Benefits. As of the Effective Date, the Executives and their families will
no longer participate in any health, dental or other benefit plans of
Asbury or the McDavid Group. At each of the Executives' options, COBRA
coverage will be available to them and their family as of the Effective
Date in accordance with the company policy of the McDavid Group.


5. Release from Non-Competition and other Obligations. In consideration of the
Executives' execution of the General Release and their other obligations
under this Agreement, Asbury, on behalf of itself, its subsidiaries and
affiliates, hereby releases each of the Executives from all obligations
under their Employment Agreements dated as of May 1, 1998 between each of
the Executives and Texas Management (the "Employment Agreements") and
further hereby releases each of the Executives from the non-competition
obligations of the Executives contained in any other document. McDavid Sr.
acknowledges that, but for Asbury's agreement to provide the release set
forth herein, he would be bound by a restrictive covenant prohibiting him
from competing with Asbury, its subsidiaries and affiliates, until May 1,
2005 and accordingly, the release provided herein, among other things, is
good and valuable consideration for McDavid Sr.'s respective obligations
under this Agreement.


6. Restrictions on McDavid Sr's Solicitation of Employees. In consideration of
the Severance Payment and the other benefits provided to him under this
Agreement, during the period from the Effective Date until January 1, 2005,
McDavid, Sr. agrees that he will not (a) directly or indirectly employ,
solicit, entice or encourage to leave the employ of Asbury or any of its
subsidiaries or affiliates, any person who is, or any time during the
preceding twelve months was, employed by, or otherwise engaged to perform
services for, Asbury or any of its subsidiaries or affiliates, or (b)
otherwise intentionally interfere with the relationship of Asbury or any of
its subsidiaries or affiliates with any person who is employed by, or
otherwise engaged to perform services for, Asbury or any of its
subsidiaries or affiliates.


7. Restriction on David Jr.'s and James' Solicitation of Employees. In
consideration of the Severance Payment and the other benefits provided to
them under this Agreement, each of David Jr. and James agrees that during
the period from the Effective Date until January 1, 2005, he will not (a)
directly or indirectly employ, solicit, entice or encourage to leave the
employ of Asbury or any of its subsidiaries or affiliates, any person who
is, or any time during the preceding twelve months was, employed by, or
otherwise engaged to perform services for, Asbury or any of its
subsidiaries or affiliates, or (b) otherwise intentionally interfere with
the relationship of Asbury or any of its subsidiaries or affiliates with
any person who is employed by, or otherwise engaged to perform services
for, Asbury or any of its subsidiaries or affiliates. This restriction
shall not prohibit David Jr. and/or James from retaining the services of
independent contractors who provide products or services on a non-exclusive
basis to the automotive industry. Knowing that Asbury is relying thereon,
each of David Jr. and James represents and warrants to Asbury that, except
as set forth below, from the period of July 29, 2003 through the Effective
Date, he has not directly or indirectly employed any person who is, or at
any time during the six months preceding such employment was, employed by
or otherwise engaged to perform services for, Asbury or any of its
subsidiaries or affiliates, or otherwise intentionally interfered with the
relationship of Asbury or any of its subsidiaries or affiliates and any
person who is employed by, or otherwise engaged to perform services for,
Asbury or any of its subsidiaries or affiliates. David Jr. acknowledges
that he has paid a former employee of the McDavid Dealerships, Walter
Dominigues, to do part time, day labor work for him and has requested
former employees, Billy Clark and Patrick Morrison (who are wholesale
buyers at other dealerships) to look for vehicles for him at public
auctions. Neither Mr. Morrison nor Mr. Clark have been paid by David Jr.
Also, David Jr. requested the advice of Clark Minton, a current employee of
the McDavid Dealerships, to aid him in the renewal of his insurance
policies, since Mr. Minton had originally assisted in obtaining his
coverage.


8. Duty of Confidentiality. Each of the Executives acknowledges that he will
not disclose to any person (other than to a management level employee or
director of Asbury or its subsidiaries or affiliates, and except as may be
required by law) and not use to compete with Asbury, its subsidiaries or
affiliates any confidential or proprietary information, knowledge or data
that is not in the public domain, which was obtained by him as an employee
of the McDavid Group, with respect to Asbury, its subsidiaries or
affiliates, 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, its subsidiaries or affiliates.


9. Return of Documents. Each of the Executives represents and warrants to
Asbury that he has returned to Asbury or destroyed all documents, materials
and data of any nature pertaining to Asbury, its subsidiaries or
affiliates, that was acquired by him during the course of his employment
with Texas Management, and that he has not retained in his possession any
such documents, materials or data or any reproduction thereof; provided,
however, that the Executives shall be permitted to retain copies of the
Employment Agreements and all other agreem
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