Document:

LETTER AGREEMENT BETWEEN MICHAEL S. KEARNEY AND ASBURY AUTOMOTIVE GROUP, INC

 Exhibit 10.3 
 

 
 PERSONAL & CONFIDENTIAL 
 April 29, 2009 
 Michael Kearney 
 Dear Michael: 
 We are excited that you have assumed the role of Senior Vice President and Chief Operating Officer reporting to me. I am sure that
you will make a significant contribution to our company. 
 Cash Compensation 
 Your Target Annualized compensation will be $960,000. This includes base salary and annual bonus at target. The components are as follows: 
 Annual base compensation will be $600,000 and a total target annual bonus opportunity of $360,000, which is 60% of your base salary. The bonus targets, which are the same for all bonus-eligible employees in the
corporate office, are based upon the number of cars sold in the US in 2009 and Asbury EPS at each level of sales. We are excited about our opportunity to earn an excellent bonus in 2009 and we will provide a copy of this plan as soon as possible.

 Equity Grant 
 In connection with your promotion you
will receive a stock option grant of 50,000 stock options, issued to you April 29, 2009. This grant of will vest 1/3 on each anniversary of the issue date and will have a term of ten years. The strike price will be the closing price of
our stock on the date of issue. 
 Equity Holding Guideline 
 Your equity holding Guideline is 62,080 shares which you currently exceed. 
 Auto Allowance 
 You will receive a car allowance in the amount of $800 per month, plus the use of one demonstrator automobile. The monthly cash allowance will be paid to you in your
regular payroll and will be subject to normal withholding. 
 Benefits 
 You will continue to be eligible for your current benefits package. 
 Vacation 
 You will be eligible for 5 weeks of vacation annually. 
 Termination
Protection 
 You will receive a termination protection agreement providing base salary and benefits continuation for one year in the event of
termination, as defined in the agreement. 

 To signify your acceptance of this position, please sign below and return one copy to me. 
 Sincerely, 
  

							
				
	/s/ Charles Oglesby	 		 		 	
	 Charles Oglesby
 President and CEO
 Asbury Automotive Group, Inc.
  
 I hereby signify my acceptance of the position
  
	 		 		 	
				
	/s/ Michael S. Kearney	 		 		 	April 30, 2009
	Signature	 		 		 	DateSEVERANCE AGREEMENT BETWEEN MICHAEL S. KEARNEY & ASBURY AUTOMOTIVE GROUP, INC

 Exhibit 10.4 
 

 
 SEVERANCE PAY AGREEMENT 
 FOR KEY EMPLOYEE 
 This agreement is entered into as of April 29, 2009 (the “Employment Date”),
between Asbury Automotive Group, Inc. and its subsidiaries and affiliates (“Asbury” or the “Company”) and Michael Kearney (“Executive”), a key employee of Asbury, in order to provide 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 “Agreement”). 
  

	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 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, 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 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. 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 shall constitute “Severance Pay”
under this Agreement. 
  

	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, 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 either (i) a relocation of Executive’s current principal place of business to a location less than 50 miles away
or (ii) Executive’s relocation from Greensboro, North Carolina to the area in and around the metropolitan area of Atlanta, Georgia), (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 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 (6) months or longer. 
  

	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. 
  

	4.	Non-Solicitation of Employees 

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

	5.	Covenant Not to Compete 

 As a condition to the
receipt of the Severance Pay payments and benefits described in Section 1 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 Section 1 above, as well as to obtain injunctive relief and damages which may include recovery of amounts paid to Executive under this Agreement. 
 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 Section 1 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 3, 4 and 5 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/ Michael S. Kearney	 		 	 /s/ Philip Johnson

	Print Name: Michael S. Kearney	 		 	 Print Name and Title: Philip Johnson,
 Vice
President of Human Resources

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