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Exhibit 10.6
AutoNation PETER C. SMITH
Senior Vice President
Human Resources
April 18, 2000
Mr. Craig Monaghan
146 Armand Road
Ridgefield, CT 06877
Dear Craig:
Welcome to AutoNation, Inc.! This letter will confirm our offer of
employment as follows:
POSITION: Chief Financial Officer, Senior Vice
President, reporting to the Chief Executive
Officer of the Company, Michael Jackson.
START DATE: May 8, 2000, or a mutually agreed upon date.
SALARY: $17,307.69 payable bi-weekly ($450,000
annualized)
SIGNING BONUS: Upon joining AutoNation, Inc. and your
appointment by the Board of Directors as a
Senior Executive, you will also receive a
$100,000 signing bonus, less applicable tax
withholding.
YEAR 2000 ANNUAL BONUS: You will be eligible for a Year 2000 bonus
representing up to 50% of annual base salary
($450,000), from January 1, 2000, in the
event the Company's earnings per share (EPS)
equals or exceeds .90 per share, and subject
to approval or modification of the Board of
Directors.
RELOCATION: The Company will provide you with relocation
assistance in moving you and your personal
property to our area. Attached for your
review is a copy of the Relocation Policy.
You are eligible for Tier 4 benefits. Should
you voluntarily terminate employment, other
than for Good Reason (as defined in the
attached rider) on or before one year of
employment, a pro-rated share of all
relocation
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Mr. Craig Monaghan
04/18/00
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reimbursements must be repaid to the Company
pursuant to the policy.
STOCK OPTION PLAN - The Company intends to give you an Initial
INITIAL GRANT: Grant of options to acquire 350,000 shares
of AutoNation, Inc. common stock. This grant
is subject to approval by the Board of
Directors. The strike price will be the
closing price of AutoNation, Inc. common
stock on the last trading day prior to your
date of employment. As stated above, under
the provisions of the Company's Employee
Stock Option Plan (the "Plan") stock options
vest twenty-five percent (25%) per year
during your term of employment beginning
with the date of your grant. This Initial
Grant will represent your entire stock
option grant for the year 2000, and as such,
you will not be eligible to receive any
additional stock option grants during 2000.
STOCK OPTION PLAN - Subject to the discretion of the Board of
FUTURE GRANTS: Director's Compensation Committee, in 2001
and future years, you may participate in the
Company's Plan for options awarded
commensurate with your position. The terms
and conditions of the Plan are subject to
change from time to time as determined by
the Board of Directors.
SEVERANCE: At any time during your employment, the
Company has the right to terminate the
employment relationship and to discharge
your employment and you may also terminate
the employment relationship for any reason
or no reason at all. Upon termination of
your employment by the Company at any time
other than for cause, or upon termination of
your employment for "Good Reason" at any
time, in each case as defined in this letter
agreement, you will be eligible to receive
an amount equivalent to eighteen (18) months
of your initial annual base salary,
$450,000, (i.e., a gross total severance
payment of $675,000) less applicable taxable
withholding. (See "Good Reason" rider
attached). The severance payments shall be
disbursed as salary continuation in equal
bi-monthly installments in accordance with
the Company's normal payroll practices and
shall be contingent upon your execution of a
general waiver and release of all claims.
You shall have no obligation to obtain
alternative employment during the severance
period. The severance payments will not
discontinue OR BE DECREASED IN ANY WAY as a
result of your obtaining employment
during the severance period, except if you
become re-employed with AutoNation or any of
its subsidiaries. Additionally, during the
severance period the Company will provide
you with a COBRA subsidy, representing the
cost of your COBRA premium,
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Mr. Craig Monaghan
04/18/00
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should you be eligible for and elect
continuation of the Company's group health
and welfare benefits plans. Stock option
vesting will cease on the last day of
employment, thus vesting will not continue
during the severance period; provided,
however, that you shall have 60 calendar
days after the termination of your
employment to exercise all vested stock
options. In the event the Company ceases
severance payments in breach of the general
waiver and release of claims, you will be
released from the non-compete restrictions
within the Confidentiality and
Non-Competition Agreement. Similarly, in the
event you materially breach any of the
covenants of the general waiver and release
of claims or any provision of the
Confidentiality and Non-Competition
Agreement, in addition to any remedies and
damages that may be available to the
Company, the Company will cease all
severance payments and benefits.
If your employment is terminated for cause
you will be paid that portion of the salary
prorated through the date of termination,
and the Company will have no further
obligations. For purposes of this letter
agreement, termination for "cause" shall
mean a termination of your employment by the
Company as a result of (i) your failure or
refusal to perform the material duties and
responsibilities required by the Company to
be performed by you which are consistent
with your position as Chief Financial
Officer of the Company (provided that you
are notified in writing of such failure or
refusal and do not cure such failure or
refusal within a reasonable period of time);
(ii) your gross negligence or willful
misconduct in the performance of your
duties; (iii) the commission of an act of
dishonesty affecting the Company or the
commission of an act constituting common law
fraud or a felony; or (iv) the commission of
an act causing material damages to the
Company (other than as a result of good
faith exercise of your business judgment) or
your following the directions of the CEO of
the Company or the Board of Directors.
BENEFITS: You will be eligible to participate in the
Company's group health and dental benefit
programs effective on the first day of the
month coincident with or following the
completion of thirty days service.
DRUG SCREENING: This offer is contingent upon the successful
completion of the Company's hair analysis
drug screening process. Please contact Tracy
Hamm at (954) 769-6746 so that she may
arrange an
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Mr. Craig Monaghan
04/18/00
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appointment at a clinic for the purpose of
collecting a small hair sample for testing.
CONFIDENTIALITY AND Employment is contingent upon your signing
NON-COMPETE the Company's Confidentiality and
AGREEMENT: Non-Compete Agreement.
This letter along with the Company's Confidentiality and Non-Compete Agreement
represent the full and entire agreement of employment. Moreover no one in the
organization, other than the Chief Executive Officer ("CEO"), has the authority
or legal ability to modify the terms of this Agreement. The CEO can do so only
if it is done specifically in a written agreement. The position of Senior
Executive and the remuneration are subject to approval and/or modification of
the Company's Board of Directors. Please confirm your acceptance of this offer
by signing in the space provided below and then return one original signed copy
to me as soon as possible.
We look forward to having you join our team.
Sincerely,
/s/ Peter C. Smith
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Peter C. Smith
ACCEPTED:
/s/ Craig Monaghan
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Craig Monaghan
April 19, 2000
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Date
Attachments:
(1) Amended and Restated 1998 Employee Stock Option Plan
(2) Confidentiality and Non-Compete Agreement
(3) Good Reason Rider
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Mr. Craig Monaghan
04/18/00
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GOOD REASON RIDER
For purposes of this letter agreement, "Good Reason" shall mean a voluntary
termination of your employment as a result of (i) a material change by the
Company in your authority, duties or responsibilities which would cause your
position with the Company to become of materially less responsibility and
importance; (ii) any decrease in your base salary by the Company, and/or (iii)
during the first three (3) years of employment, your relocation by the Company
without your consent to an area outside of South Florida.
