SEVERANCE AGREEMENT BETWEEN PHILIP R. JOHNSON AND ASBURY AUTOMOTIVE GROUP, INC.



 Exhibit 10.6 
 

 
 SEVERANCE PAY AGREEMENT 
 FOR KEY EMPLOYEE 
 Reference is made to that certain agreement entered into as of April 21, 2003, as amended on
December 20, 2006, and November 14, 2007, (collectively the “Agreement”) between Asbury Automotive Group, Inc. and its subsidiaries and affiliates (“Asbury” or the “Company”) and Philip
Johnson (“Executive”), a key employee of Asbury, which provides for an agreed-upon compensation in the event of a Termination (as such term is defined in this Agreement) of Executive’s employment with Asbury. The parties hereto
agree to amend and restate such Agreement as hereinafter provided, as of April 29, 2009. 
  

	1.	Severance Pay Arrangement 

 If a Termination 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 (as such term is defined in this Agreement).
Payment (subject to required withholding) will be made by Asbury to Executive in a lump sum within 30 days of Termination. 
 If Executive
participates in a bonus compensation plan at the date of Termination, the Company shall pay Executive a pro rata bonus for the year of the Termination equal to the amount of the bonus that Executive would have received if Executive’s employment
not been terminated during such year, multiplied by the percentage of such year that has expired through the date of Termination. Such bonus shall be paid at such time as bonuses are paid under the bonus compensation plan to the Company’s other
employees whose employment has not terminated in such year. 
 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, dental, disability and life 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. Executive agrees to notify Asbury promptly upon obtaining such other employment.
At the end of 12 months, Executive, 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. 
 The amounts payable under this Section 1, to the extent modified under Section 2, shall constitute “Severance Pay” under this
Agreement. 
  

	2.	Change of Control Arrangement 

 In the event that a
Termination occurs at any time within two years after a “Change of Control,” which 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,
then (1) the term “12 months” in the first and third paragraphs of Section 1 of this Agreement shall be replaced with “36 months” and (2) the term “one year” in Section 6 of this Agreement shall be
replaced with “36 months.” 
  

	3.	Definition of Termination Triggering Severance Pay 

 A “Termination” triggering the Severance Pay set forth above in Sections 1 and 2 is defined as a termination of Executive’s employment with Asbury, which constitutes a “separation from service” from the
Company (within the meaning of Section 409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section 1.409A-1(h)) (1), by Asbury without Cause (as such term is defined in this Agreement), 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 (collectively “Good Reason”); provided that no termination shall be
deemed to be for Good Reason unless (i) Executive provides the Company with written notice setting forth the specific facts or circumstances constituting Good Reason within ninety (90) days after the initial existence of the occurrence of
such facts or circumstances, (ii) the Company has failed to cure such facts or circumstances within thirty (30) days of its receipt of such written notice, and (iii) the effective date of the termination for Good Reason occurs no
later than one hundred fifty (150) days after the initial existence of the facts or circumstances constituting Good Reason. For avoidance of doubt, a Termination shall not include either (1) a termination of Executive’s employment by
Asbury for Cause or due to Executive’s, death, disability (as such term is defined in this Agreement), retirement or voluntary resignation; or (2) the transfer of Executive from Asbury to any of its affiliates, until such time as Executive
is no longer employed by Asbury or any of its affiliates. If Executive is transferred to an affiliate of Asbury, references to “Asbury” herein shall be deemed to include the applicable affiliate to which Executive is transferred.








 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 4, 5 or 6 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 (6) months or longer. 
  

	4.	Confidential Information and Nondisclosure Provision 

 As a condition to the receipt of the Severance Pay payments and benefits described in Sections 1 and 2 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 Sections 1 and 2 above, as well as to
obtain injunctive relief and damages which may include recovery of amounts paid to Executive under this Agreement. 
  

	5.	Non-Solicitation of Employees 

 As a condition to
the receipt of the Severance Pay payments and benefits described in Sections 1 and 2 above, Executive agrees that during employment with Asbury and for one year following termination of Executive’s employment for any reason, Executive shall not
directly or indirectly solicit for employment or employ any person who, at any time during the 12 months preceding the last day of Executive’s employment, is or was employed by Asbury or induce or attempt to persuade any Executive of Asbury to
terminate their employment relationship. 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 Sections 1 and 2 above, as
well as to obtain injunctive relief and damages which may include recovery of amounts paid to Executive under this Agreement. 
  

	6.	Covenant Not to Compete 

 As a condition to the
receipt of the Severance Pay payments and benefits described in Sections 1 and 2 above, while Executive is employed by Asbury and for one year following termination of Executive’s employment for any reason (subject to the next paragraph),
Executive shall not directly or indirectly engage in, participate in, represent or be connected with in any way, as an officer, director, partner, owner, employee, agent, independent contractor, consultant, proprietor or stockholder (except for the
ownership of a less than 5% stock interest in a publicly-traded corporation) or otherwise, any business or activity which competes with the business of Asbury unless expressly consented to in writing by the Chief Executive Officer of Asbury
(collectively, “Covenant Not To Compete”). 
 In the event that Executive’s employment ends for any reason, the
provisions of the Covenant Not To Compete shall remain in effect for 12 months following the date of Termination except that the prohibition above on “any business or activity which competes with the business of Asbury” shall be limited to
AutoNation, Inc., Sonic Automotive, Inc., Lithia Motors, Inc., Penske Automotive Group, Inc., f/k/a/ United Auto Group, Inc., Group One Automotive Inc., and other competitive groups of similar size. Executive shall disclose in writing to Asbury the
name, address and type of business conducted by any proposed new employer of Executive if requested in writing by Asbury. Executive agrees that in the event of a breach by Executive of this Covenant Not To Compete, 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 Sections 1 and 2 above, as well as to obtain injunctive relief and damages which may include recovery of amounts paid to
Executive under this Agreement. 
  

	7.	Parachute Payment Limitation 

 Notwithstanding
anything in this agreement to the contrary, if any severance pay or benefits payable under this agreement (without the application of this Section 7), either alone or together with other payments, awards, benefits or distributions (or any
acceleration of any payment, award, benefit or distribution) pursuant to any agreement, plan or arrangement with Asbury or any of its affiliates (the “Total Payments”), would constitute a “parachute payment” (as defined in
Section 280G of the Code, then the following shall occur: 
  

	 	(a)	 tax counsel selected by Asbury’s independent auditors and acceptable to Executive shall compute the net present value to Executive of all the Total Payments
after reduction for the excise taxes imposed by Code Section 4999 










 
and for any normal income taxes that would be imposed on Executive if such Total Payments constituted Executive’s sole taxable income; and 

 

	 	(b)	said tax counsel shall next compute the maximum Total Payments that can be provided without any such Total Payments being characterized as “Excess Parachute Payments” (as
defined in Code Section 280G) and reduce the result by the amount of any normal income taxes that would be imposed on Executive if such reduced Total Payments constituted Executive’s sole taxable income. 

 If the result derived in clause (a) above is greater than the result derived in clause (b) above by more than 10% of the result derived in
clause (b) above, then Asbury shall pay Executive the full amount of the Total Payments without reduction. If the result derived from clause (a) above is not greater than the result derived in clause (b) above by more than 10% of the
result derived in clause (b) above, then Asbury shall pay Executive the maximum Total Payments possible without any such Total Payments being characterized as Excess Parachute Payments. The determination of how such Total Payments will be
reduced shall be made by Executive in good faith after consultation with Asbury. 
  
 GENERAL PROVISIONS 
  

	A.	Employment is At Will 

 Executive and Asbury
acknowledge and agree that Executive is an “at will” employee, which means that either Executive or Asbury may terminate the employment relationship at any time, for any reason, with or without cause or notice, and that nothing in this
Agreement shall be construed as an express or implied contract of employment. 
  

	B.	Execution of Release 

 As a condition to the receipt
of the Severance Pay payments and benefits described in Sections 1 and 2 above, Executive agrees to execute a release of all claims arising out of Executive’s employment or Termination including but not limited to any claim of discrimination,
harassment or wrongful discharge under local, state or federal law. 
  

	C.	Alternative Dispute Resolution 

 Any disputes
arising under or in connection with this Agreement shall be resolved by binding arbitration before an arbitrator (who shall be an attorney with at least ten years’ experience in employment law) in the city where Executive is located and in
accordance with the rules and procedures of the American Arbitration Association. Each party may choose to retain legal counsel and shall pay its own attorneys’ fees, regardless of the outcome of the arbitration. Executive may be required to
pay a filing fee limited to the equivalent cost of filing in the court of jurisdiction. Asbury will pay 








 
the fees and costs of conducting the arbitration. Judgment upon the award rendered by the arbitrator may be entered in any court of jurisdiction. 

 

	D.	Other Provisions 

 This Agreement shall be binding
upon the heirs, executors, administrators, successors and assigns of Executive and Asbury, including any successor to Asbury. 
 The
provisions of Sections 4, 5 and 6 shall survive the termination of this Agreement. 
 The headings and captions are provided for reference and
convenience only and shall not be considered part of this Agreement. 
 Any notice or other communication required or permitted to be
delivered under this Agreement shall be (i) in writing, (ii) delivered personally, by nationally recognized overnight courier service or by certified or registered mail, first-class postage prepaid and return receipt requested,
(iii) deemed to have been received on the date of delivery or on the third business day after mailing, and (iv) addressed as follows (or to such other address as the party entitled to notice shall later designate in accordance with these
terms): 
  

			
	 If to Asbury:
	  	Asbury Automotive Group, Inc.
		  	c/o General Counsel
		  	2905 Premiere Parkway, Suite 300
		  	Duluth, GA 30097
		  	
	 If to Executive:
	  	To the most recent address of Executive set forth in the personnel records of Asbury.

 This Agreement supersedes any and all agreements between Asbury and Executive relating to payments
upon Termination of employment or Severance Pay and may only be modified in a writing signed by Asbury and Executive. 
 This Agreement shall
be governed by and construed in accordance with the laws of the State of New York. 
 All payments hereunder shall be subject to any required
withholding of federal, state, local and foreign taxes pursuant to any applicable law or regulation. 
 If any provision of this Agreement
shall be held invalid or unenforceable, such holding shall not affect any other provisions, and this Agreement shall be construed and enforced as if such provisions had not been included. No provision of this Agreement shall be waived unless the
waiver is agreed to in writing and signed by Executive and the Chief Executive Officer of Asbury. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement 








 
by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 
 The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate the terms
and conditions required by, Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder. Notwithstanding any provision of this Agreement to the contrary, in the event that Asbury
determines that any amounts payable hereunder will be immediately taxable to Executive under Section 409A of the Code and related Department of Treasury guidance, Asbury and Executive shall cooperate in good faith to (x) adopt such
amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that they mutually determine to be necessary or appropriate to preserve the intended tax treatment of the benefits
provided by this Agreement, to preserve the economic benefits of this Agreement and to avoid less favorable accounting or tax consequences for Asbury and/or (y) take such other actions as mutually determined to be necessary or appropriate to
exempt the amounts payable hereunder from Section 409A of the Code or to comply with the requirements of Section 409A of the Code and thereby avoid the application of penalty taxes thereunder. 
  
  
 [Remainder
of Page Intentionally Left Blank] 







 This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument. 
 AGREED TO AS OF April 29, 2009: 
  
  

			
	BY EXECUTIVE:	  	BY ASBURY:
		  	
		  	
		  	ASBURY AUTOMOTIVE GROUP, INC.
		  	
		  	
		  	
	 /s/ Philip R. Johnson
	  	 /s/ Charles Oglesby

	Print Name: Philip R. Johnson	  	Print Name and Title: Charles Oglesby, President & CEO