April 5, 1996
Mr. Ezra P. Mager
141 East 72nd Street
New York, New York
Dear Ezra:
In connection with your resignation last January as an officer and
director of United Auto Group, Inc. and as an officer of Trace International
Holdings, Inc., UAG and Trace agree to certain payments and conditions as
follows:
1. CASH PAYMENTS. UAG agrees to pay you a total of $342,107.82
(subject to withholding of all income and employment taxes required by law to be
withheld), in 22 equal monthly installments, with the first payment due April 9,
1996, each payment due on the last business day of each calendar month, and the
last payment due December 31, 1997. On April 8, 1996 UAG shall also pay to you
$139,622.95 in cash (net of withholding of the type described above). After
January 1, 1996 but, prior to the date hereof, UAG and Trace have paid you an
aggregate of $18,269.23 in cash (net of withholding of the type described
above).
2. BENEFITS. Trace will pay your COBRA premiums until December 31,
1996 for a health insurance plan providing benefits equivalent to the plan
provided to you prior to January 1, 1996. You will continue to be able to use
the car currently used by you and leased by a UAG subsidiary until December 31,
1996. UAG will fund auto insurance coverage for such car during this period at
the same levels as prior to January 1, 1996.
3. REPURCHASE OF TRACE STOCK; M&E PARTNERSHIP. Trace will repurchase
your stock in Trace at your cost, or $250,000, by May 1, 1996. By May 1, 1996,
Trace will purchase your partnership interest in M&E Partnership in accordance
with Section 16 of the M&E Partnership Agreement for $500.
4. UAG STOCK. The Registration Rights Agreement will be amended by
May 1, 1996 so that, with respect to the first demand registration, you will
have priority over the other sellers.
5. ACQUISITION CANDIDATES. Until March 1, 1998 (unless an earlier
date is otherwise specified on Exhibit A hereto), you shall not, directly or
indirectly, discuss with any Acquisition Candidate (as defined below) any
acquisition, disposal, financing or joint venture, in respect of (i) an
Acquisition Candidate or its subsidiaries, (ii) any direct or indirect interests
in an Acquisition Candidate or its subsidiaries or (iii) the material assets of
an Acquisition Candidate or its subsidiaries. Acquisition Candidate means any
person or entity specified in Exhibit A hereto. This rule will
also prevent such discussions with the affiliates of an Acquisition Candidate or
officers, directors, consultants or employees of any Acquisition Candidate or
its affiliates in respect of the foregoing.
6. SOLICITATION. Until March 1, 1998, you shall not (nor shall you
permit your affiliates to) (i)(x) control, or own, directly or indirectly, an
equity interest in (including any convertible securities or rights to acquire
such equity), or (y) be an officer, director or employee of, or independent
contractor for, or provide services to, any person or entity (or its affiliates)
that employs, at any time any employee of UAG or its subsidiaries earning more
than $50,000 or (ii) solicit the employment of any employee of UAG or its
subsidiaries either for yourself or on behalf of any other person or entity.
7. CONFIDENTIALITY. You shall keep all financial statements of UAG
and its affiliates and financial information in the books and records of UAG and
its affiliates used in creating such financial statements (other than
information already in the public domain (through no fault of yours) or that is
required to be disclosed by law) confidential and shall not use the same for any
purpose (other than in evaluating your investment in UAG's stock).
8. RELEASES. UAG, Trace, you and Marshall S. Cogan have exchanged
general releases in the forms attached hereto.
9. REGISTRATION RIGHTS AGREEMENT AMENDMENT. You shall sign the
amendment to the Registration Rights Agreement substantially in the form
attached.
Yours sincerely,
TRACE INTERNATIONAL HOLDINGS, INC.
By: /s/ Marshall S. Cogan
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Marshall S. Cogan
Chief Executive Officer
UNITED AUTO GROUP, INC.
By: /s/ Carl Spielvogel
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Carl Spielvogel
Chief Executive Officer
Accepted and agreed to:
/s/ Ezra P. Mager
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Ezra P. Mager
(Attachments)