Exhibit 10.1

 

AGREEMENT

 

THIS AGREEMENT (this “Agreement”) made as of this 23rd day of August, 2005
between SONIC AUTOMOTIVE, INC., a Delaware corporation (the “Employer”), and E.
LEE WYATT, JR. (the “Employee”).

 

WHEREAS, the Employee currently serves as Executive Vice President, Chief
Financial Officer and Treasurer of the Employer, and as an officer, director,
manager and/or governor of numerous direct and indirect subsidiaries and
affiliates of the Employer; and

 

WHEREAS, the Employer and the Employee are parties to an Employment Agreement
dated as of November 4, 2004 (the “Employment Agreement”); and

 

WHEREAS, the Employee has notified the Employer that he desires to voluntarily
resign his employment with the Employer in order to pursue other interests; and

 

WHEREAS, the Employer and the Employee desire to enter into this Agreement for
the purpose of effecting an orderly resignation by the Employee of his officer,
director and employment relationships with the Employer and the subsidiaries and
affiliates of the Employer.

 

NOW, THEREFORE, the parties intending to be legally bound agree as follows:

 

1. Resignation.

 

(a) The Employee hereby voluntarily resigns the following positions, such
resignation to be effective 5:00 p.m., Eastern Time, on September 6, 2005 (the
“Termination Date”): (i) Executive Vice President, Chief Financial Officer and
Treasurer of the Employer; and (ii) officer, director, manager and/or governor
of all direct and indirect subsidiaries of the Employer, as well as all
affiliates of the Employer including, without limitation, North Point Imports
LLC d/b/a North Point Volvo. If requested by the Employer, the Employee shall
further evidence such resignations by executing formal resignation letters
addressed to the Employer and such subsidiaries or affiliates.

 

(b) The Employer and the Employee acknowledge and agree that the Employee’s
resignation pursuant to this Agreement constitutes a termination by the Employee
“without cause” pursuant to paragraph 5(c) of the Employment Agreement.

 

(c) Notwithstanding the provisions of paragraph 6(a) of the Employment
Agreement, (i) the Employer shall pay the Employee for his accrued vacation pay
through the Termination Date, and (ii) if the Employee elects continued coverage
under the Employer’s group medical and/or dental benefit plans for himself
and/or his qualified dependants pursuant to COBRA, the Employer shall subsidize
the costs of that continued COBRA coverage for a period of two (2) months
following the termination of the Employee’s employment such that the Employee
shall not be required to pay more for COBRA coverage during such two-month
period than he would be required to pay if he were still an active employee of
the Employer.

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2. Retention as a Consultant.

 

(a) During the period commencing with the Termination Date and ending at 5:00
pm, Eastern Time, on April 30, 2006 (the “Consulting Term”), the Employer shall
retain the Employee, and the Employee shall serve, as a consultant to the
Employer. In such capacity, the Employee shall be available to the Employer and
shall perform such consulting services, as the Chief Executive Officer or the
President of the Employer shall reasonably request; provided, however, that such
requested consulting services shall be reasonable in scope and shall be
performed at reasonable times that do not interfere with Employee’s full-time
employment responsibilities owed to his new employer.

 

(b) As compensation for his consulting services during the Consulting Term, the
Employee shall receive a consulting fee of $12,500 per month, payable within ten
business days following the completion of each calendar month during the
Consulting Term. During the Consulting Term, the Employee will be reimbursed for
all reasonable out-of-pocket business related expenses incurred by the Employee
with the prior approval of the President of the Employer, in accordance with the
policies, practices and procedures of the Employer in effect from time to time.

 

(c) During the Consulting Term, all outstanding stock options previously granted
to the Employee pursuant to the Employer’s 1997 Stock Option Plan shall not be
terminated and shall continue to vest, in accordance with such Plan and the
terms of the applicable stock option agreements. All such stock options that
vest prior to the expiration of the Consulting Term must be exercised by the
Employee prior to the expiration of the Consulting Term, and all such stock
options will expire immediately upon expiration of the Consulting Term in
accordance with the terms of the Employer’s 1997 Stock Option Plan.

 

(d) Except as specifically provided in this Agreement, the Employee shall not be
entitled to any benefits during the Consulting Term.

 

(e) The Employee acknowledges that the Restrictive Covenants contained in
paragraphs 8 through 10 of the Employment Agreement shall continue to apply to
the Employee during the Consulting Term and that, notwithstanding the provisions
of the Employment Agreement, the “Restrictive Period” under the Employment
Agreement shall not begin to run until the expiration of the Consulting Term.

 

(f) All taxes applicable to any amounts paid by the Employer to the Employee
during the Consulting Term shall be paid by the Employee, and the Employer shall
not withhold or pay any amount for federal, state or municipal income tax,
social security, unemployment, workers compensation or any other tax or related
tax or assessment.

 

(g) In the performance of his consulting services during the Consulting Term,
the Employee acknowledges that he shall act solely as an independent contractor
and nothing contained herein shall at any time be construed so as to create the
relationship of employer and employee, partnership, principal and agent, or
joint venturer, as between the Employer and the Employee.

 

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3. Non-Disparagement. The Employer and the Employee each agree that, from the
execution of this Agreement, they shall not, directly or indirectly, disparage
the other party or his/its shareholders, directors, officers, representatives,
agents, employees, heirs or family members, as applicable, and shall not,
directly or indirectly, make any communication or comment, whether written or
oral, which might cause injury or damage to the other party or his/its
shareholders, directors, officers, representatives, agents, employees, heirs or
family members, as applicable, or to their respective reputations.

 

4. General Release. In return for the mutual consideration specified in this
Agreement, the Employer and the Employee each hereby release the other, and
their respective shareholders, directors, officers, representatives, agents and
employees, from any and all actions and causes of action, claims, demands and
compensation whatsoever, arising out of the employment of the Employee by the
Employer; provided, however, that this provision expressly shall not constitute
a release of any continuing obligations of the Employee or the Employer pursuant
to this Agreement, the Employment Agreement and any other existing written
agreements between the Employee and the Employer.

 

5. Termination for Breach; Effect on Employment Agreement and Other Agreements.

 

(a) In the event of a material breach by any party hereto of this Agreement or
the Employment Agreement, the non-breaching party shall be entitled to terminate
this Agreement by notice to the breaching party in writing.

 

(b) Except as expressly modified herein, this Agreement shall have no effect on
the Employment Agreement or any other existing written agreements between the
Employee and the Employer, and all other terms and conditions of the Employment
Agreement and such other agreements shall remain in full force and effect,
without modification.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first written above.

 

SONIC AUTOMOTIVE, INC. By:  

/s/ Jeffrey C. Rachor

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Name:   Jeffrey C. Rachor Title:   President and Chief Operating Officer

/s/ E. Lee Wyatt, Jr.

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E. Lee Wyatt, Jr.

 

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