SEPARATION AGREEMENT AND GENERAL RELEASE
EXHIBIT 10.1
This SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”) is made and entered into this
9th day of May, by and between Group 1 Automotive, Inc., a Delaware corporation
(together with its affiliates (defined below), “Group 1”) and X.X. Xxxxxxxxxxxxx, Xx.
(“Xxxxxxxxxxxxx”). Xxxxxxxxxxxxx and Group 1 are sometimes herein collectively referred to herein
as the “Parties” and individually, a “Party.” The “Effective Date” of this Agreement shall be on
the later of (i) the eighth (8th) day after this Agreement has been signed by
Xxxxxxxxxxxxx and (ii) the date of the expiration of the revocation period described in Section 24
of this Agreement.
WITNESSETH:
WHEREAS, Xxxxxxxxxxxxx is employed as president, chairman, and chief executive officer of
Group 1, and serves as a member of Group 1’s board of directors; and
WHEREAS, the Parties entered into an Employment Agreement dated March 1, 2002 (which was
amended pursuant to that certain First Amendment to Employment Agreement dated May 21, 2003`) (the
“Employment Agreement,” as amended) pursuant to which the Parties agreed to certain terms and
conditions of Xxxxxxxxxxxxx’x employment by Group 1;
WHEREAS, because of his employment and his service on the board of directors of Group 1,
Xxxxxxxxxxxxx has obtained intimate and unique knowledge of all aspects of Group 1’s business
operations, current and future plans, financial plans and other confidential and proprietary
information;
WHEREAS, Xxxxxxxxxxxxx has acknowledged that disclosure of confidential and proprietary
information relating to Group 1 to any person or entity in the automotive business, or use of such
information by Xxxxxxxxxxxxx for personal gain, would (i) violate Xxxxxxxxxxxxx’x fiduciary
obligation to Group 1 and the terms of Sections 5 and 6 of the Employment Agreement and (ii) cause
significant and irreparable harm to Group 1; and
WHEREAS, the Parties desire to finally, fully and completely resolve all disputes that may now
exist or may hereafter arise relating to the hiring, employment and termination of employment
relationship between Xxxxxxxxxxxxx and Group 1, and any and all matters concerning or in any manner
relating to the Employment Agreement, and all benefits and compensation to which Xxxxxxxxxxxxx may
be entitled in connection with his employment by or service on the board of directors of Group 1;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter set forth, and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1. Termination of Employment. Xxxxxxxxxxxxx’x employment with Group 1 shall be terminated as
of the Effective Date. Xxxxxxxxxxxxx resigns as of the Effective Date from any
and all positions as an officer, member of the board of directors or other position of Group 1
and any and all of its subsidiaries. Except as otherwise expressly provided in this Agreement, all
benefits, stock options, restricted stock rights, compensation, perquisites and other rights of
Xxxxxxxxxxxxx under the Employment Agreement or otherwise with Group 1 shall cease as of the
Effective Date including that no further salary, bonus, benefits, payments, stock or stock options
shall be due from or paid by Group 1 to Xxxxxxxxxxxxx. However, the Parties agree that the
provisions of the First Amended Employment Agreement dated May 21, 2003, shall continue to apply
through the end of the Consulting Term, defined below, at which time the Amended Employment
Agreement shall terminate.
2. Continuing Nondisclosure, Protection of Proprietary Information, and Non-Competition
Obligations. The Ownership and Protection of Information, Copyrights, and Post-Employment
Non-Competition obligations of Xxxxxxxxxxxxx set forth in Sections 5 and 6 of the Employment
Agreement shall continue in full force and effect for the periods set forth in the Employment
Agreement.
3. Return Of Property. Within five (5) days after the Effective Date, Xxxxxxxxxxxxx shall (i)
deliver to Group 1 all equipment and property of Group 1 in his possession, including all files and
programs stored electronically or otherwise, that relate or refer to Group 1 or any officer,
director or employee of Group 1, and (ii) deliver to Group 1 all originals and copies of non-public
documents, notes, memoranda or any other written materials that relate or refer to Group 1. Group
1 hereby transfers ownership to Xxxxxxxxxxxxx of the cellular telephone, computer, and Blackberry
currently provided to Xxxxxxxxxxxxx by Group 1.
4. Salary Rights. Group 1 shall pay to Xxxxxxxxxxxxx his current monthly salary amount (minus
required withholdings) pursuant to Group 1’s normal payroll schedule until November 2, 2005, but
not thereafter.
5. Split-Dollar Life Insurance Rights. Group 1’s obligations with respect to continuation of
the Split-Dollar Life Insurance Policy on Xxxxxxxxxxxxx’x life shall continue through December 31,
2008.
6. Office and Secretary Rights. Group 1 shall have no obligation to, and shall not, provide
Xxxxxxxxxxxxx with an office, a secretary or an assistant beyond the Effective Date. The Parties
agree that Xxxxxxxxxxxxx may hire his former secretary.
7. Medical Insurance and COBRA Rights. Xxxxxxxxxxxxx’x existing medical insurance coverage
shall be continued by Group 1 through the Consulting Term, defined below. When the Consulting Term
ends, Xxxxxxxxxxxxx and his dependents shall have the right to elect continuation of applicable
medical insurance coverage pursuant to COBRA, at their own cost. Group 1 shall provide in writing
to Xxxxxxxxxxxxx at his home address, information regarding COBRA election.
8. Rights Under 401(k), ESPP and Deferred Compensation. Any vested interest held by Xxxxxxxxxxxxx
in Group 1’s 401(k), Employee Stock Purchase and Deferred Compensation Plans shall be distributed
in accordance with the terms of the applicable Plans (the
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“Plans”) and law. Xxxxxxxxxxxxx shall not be a participant in the 401(k) or Employee Stock
Purchase Plans after the Effective Date, and shall not be entitled to any further contribution for
any period of time after the Effective Date. Group 1 shall provide to Xxxxxxxxxxxxx in writing at
his address for notice, information necessary and as required by law to facilitate the transfer or
rollover of his 401(k) account. During the Consulting Term, defined herein, Xxxxxxxxxxxxx shall be
eligible to participate in the Deferred Compensation Plan. However, he shall not be entitled to
receive Employer Deferrals as defined in the Deferred Compensation Plan, after the Effective Date.
9. Annual Bonus Rights. Provided Xxxxxxxxxxxxx fully cooperates with Group 1 during the
transition and satisfactorily fulfills his obligations to Group 1 during the Consulting Term as
described in section 13 of this Agreement, and subject to the discretion of the board of directors
of Group 1, Group 1 may pay Xxxxxxxxxxxxx one-third of the annual bonus he would have received
under Group 1’s 2005 Bonus Plan, up to a maximum of $380,000 (minus required withholdings), payable
in February 2006 pursuant to Group 1’s normal schedule. The Board of Directors of Group 1 shall
notify Xxxxxxxxxxxxx in writing by February 28 of the amount of his bonus, if any.
10. Vehicle Rights. Xxxxxxxxxxxxx shall be entitled to use the demonstrator vehicles
currently provided to him by Group 1 until the end of the Consulting Term (defined below). During
the Consulting Term, insurance coverage currently provided by Group 1 in connection with use of
demonstrator vehicles by executives of the Group 1 shall continue to apply to the demonstrator
vehicles used by Xxxxxxxxxxxxx. Upon expiration of the Consulting Term, Xxxxxxxxxxxxx shall
immediately return all such demonstrator vehicles to Group 1.
11. Restricted Stock and Stock Option Rights. On March 14, 2006, 12,500 shares of the 50,000
shares of restricted stock (or restricted stock units) Group 1 granted to Xxxxxxxxxxxxx in March
2005 shall become fully vested. The remaining 37,500 shares of restricted stock shall forfeit to
the Company in accordance with the Restricted Stock Agreement. All stock options previously
granted to Xxxxxxxxxxxxx under Incentive Stock Option Agreements have vested and are exercisable in
accordance with the terms of the applicable Incentive Stock Option Agreements.
12. Survivor Rights. Upon Xxxxxxxxxxxxx’x death, this Agreement shall operate in favor of his
estate (“Estate”); provided, however, in the event of Xxxxxxxxxxxxx’x death, Group 1 shall have the
option to accelerate all remaining sums owed to Xxxxxxxxxxxxx pursuant to this Agreement and pay
such amount, discounted to present value, in a lump sum to Xxxxxxxxxxxxx’x Estate.
13. Consulting. Group 1 shall retain Xxxxxxxxxxxxx as an independent consultant to Group 1
from the Effective Date through March 31, 2006 (the “Consulting Term”). Xxxxxxxxxxxxx shall be
available during normal business hours to provide consulting services to the chief executive
officer and board of directors of Group 1, as they deem necessary or appropriate. Such services
shall include assisting Group 1 in the transition of the new chief executive officer and testifying
(and preparing to testify) as a witness in any proceeding or otherwise providing information or
reasonable assistance to Group 1 in connection with any
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claim or suit. Xxxxxxxxxxxxx shall cooperate with Group 1 regarding any pending or
subsequently-filed litigation, claims or other disputed items involving Group 1 that relate to
maters within the knowledge or responsibility of Xxxxxxxxxxxxx during his employment.
Xxxxxxxxxxxxx shall (i) meet with Group 1’s representatives, its counsel or other designees at
mutually convenient times and places with respect to any items within the scope of this provision;
(ii) provide truthful testimony regarding same to any court, agency or other adjudicatory body; and
(iii) provide Group 1 with notice of contact by any adverse party (known by Xxxxxxxxxxxxx to be
adverse to Group 1 or its interests), and shall not voluntarily assist any such non-governmental
adverse party or such adverse party’s representatives. For his consulting services, Group 1 shall
pay to Xxxxxxxxxxxxx a total of $100,000 (minus required withholdings) over the Consulting Term, to
be paid in five equal monthly installments (each being payable on the last day of each calendar
month) of $20,000 (minus required withholdings), beginning November 30, 2005 and ending on March
31, 2006. Such payments are expressly conditioned on Xxxxxxxxxxxxx’x compliance with all terms of
this Agreement and the Ownership and Protection of Information and Post-Employment Non-Competition
obligations in Sections 5 and 6 of the Employment Agreement.
14. Release By Xxxxxxxxxxxxx. Xxxxxxxxxxxxx hereby releases Group 1 and its employees,
officers, agents, directors, stockholders and affiliates (collectively referred to as “Releasees”),
from any and all claims, causes of action, losses, obligations, liabilities, damages, judgments,
costs, expenses (including attorneys fees) of any kind whatsoever, through the Effective Date,
including, but not limited to, disputes or claims arising out of Xxxxxxxxxxxxx’x Employment
Agreement, hiring, employment or termination of such employment with Group 1, including any
disputes regarding compensation, bonus, stock, or options. This Release includes, but is not
limited to, all claims, whether arising in contract or allegations of tort, common law or assertion
of federal or state statutory rights, including, but not limited to, Title VII of the Civil Rights
Act of 1964, as amended, the Texas Commission on Human Rights Act, the Americans with Disabilities
Act, or the Age Discrimination in Employment Act, encompassing claims of age discrimination, claims
for wrongful discharge, breach of express or implied contract or implied covenant of good faith and
fair dealing, as well as any expenses, costs or attorneys fees. Xxxxxxxxxxxxx does not release his
right to enforce the terms of this Agreement. Furthermore, Xxxxxxxxxxxxx hereby relinquishes any
right to re-employment with Group 1. For purposes of this Agreement the term “Affiliate” means a
party, person or entity that, directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, such party, where “control”, “controlled by” and
“under common control with” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such party, whether through the ownership of
voting securities, by voting trust, contract or similar arrangement, as trustee or executor, or
otherwise.
15. Release By Group 1. Group 1 hereby releases Xxxxxxxxxxxxx from any and all claims, causes of
action, losses, obligations, liabilities, damages, judgments, costs, expenses (including attorneys’
fees) which arise out of actions taken by Xxxxxxxxxxxxx while serving Group 1 and acting in good
faith, and which he had no reasonable cause to believe the conduct was unlawful or illegal,
including, but not limited to, claims under federal, state or local constitution, statute, law,
ordinance or regulation provided, however, Group 1 does not release its right to enforce the terms
of this Agreement.
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16. Non-Disparagement. Xxxxxxxxxxxxx shall not make any public disparaging or critical statements
regarding the Releasees and Group 1 shall cause its members of the board of directors and new Chief
Executive Officer not to make any public disparaging or critical statements regarding
Xxxxxxxxxxxxx.
17. Breach By Xxxxxxxxxxxxx. In the event Xxxxxxxxxxxxx breaches any term or provision of
this Agreement, all amounts which otherwise would be payable by Group 1 to Xxxxxxxxxxxxx under this
Agreement shall cease and Group 1 shall be excused and have no further obligation for payment of
any further amounts to Xxxxxxxxxxxxx. Provided, however, that notwithstanding such cessation of
Group 1 obligations, Xxxxxxxxxxxxx’x obligations pursuant to the Ownership and Protection of
Information and Post-Employment Non-Competition provisions of the Employment Agreement shall
continue in full force and effect as specified in this Agreement. In addition to the remedies
referenced above, Group 1 may bring suit in a court of competent jurisdiction to enforce any term
or provision of this Agreement, and in the event said court determines that Xxxxxxxxxxxxx has
breached or failed to perform any material term or provision of this Agreement, damages and
injunctive relief may be issued against Xxxxxxxxxxxxx.
18. Recovery Of Attorneys Fees. If Group 1 seeks and obtains judicial or equitable relief for
any violation of this Agreement by Xxxxxxxxxxxxx, Group 1 shall be entitled to recover from
Xxxxxxxxxxxxx its costs and reasonable attorneys’ fees expended in such effort. If Xxxxxxxxxxxxx
seeks and obtains judicial or equitable relief for any violation of this Agreement by Group 1, he
shall be entitled to recover from Group 1 his costs and reasonable attorneys’ fees expended in such
efforts.
19. Right Of Cancellation. If Xxxxxxxxxxxxx or anyone acting on his behalf brings suit or
files a claim for arbitration against Group 1 for any claims released in Section 14 of this
Agreement, except any action to enforce this Agreement, Group 1 may choose to cancel all of the
remaining terms of this Agreement and recover from Xxxxxxxxxxxxx (or Xxxxxxxxxxxxx’x successors or
assigns) the value of anything else paid by Group 1 in exchange for this Agreement, including any
profit realized by Xxxxxxxxxxxxx pursuant to the exercise of any option, as described in section 11
of this Agreement. If the Agreement is not canceled by Group 1, then the terms of this Agreement
shall continue in full force and effect.
20. Notices. All notices and other communications hereunder will be in writing. Any notice or
other communication hereunder shall be deemed duly given if it is sent by registered or certified
mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set
forth:
If to Xxxxxxxxxxxxx:
Xx. X.X. Xxxxxxxxxxxxx, Xx.
0000 Xxxx Xxx Xxxx
Xxxxxxx, Xxxxx 00000
0000 Xxxx Xxx Xxxx
Xxxxxxx, Xxxxx 00000
If to Group 1:
General Counsel
Group 1 Automotive, Inc.
000 Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Group 1 Automotive, Inc.
000 Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
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Any party may send any notice or other communication hereunder to the intended recipient at the
address set forth above using any other means (including personal delivery, expedited courier,
messenger services, telecopy, telex, ordinary mail or electronic mail), but no such notice or other
communication shall be deemed to have been duly given unless and until it is actually received by
the intended recipient. Any party may change the address to which notices and other communications
hereunder are to be delivered by giving the other party notice in the manner set forth herein.
21. Joint Preparation. The Parties acknowledge that this Agreement has been drafted,
prepared, negotiated and agreed to jointly, with advice of each Party’s respective legal counsel,
and to the extent that any ambiguity should appear, now, or at any time in the future, latent or
apparent, such ambiguity shall not be resolved or construed against either Party.
22. Non-Admission. This Agreement shall not in any way be construed as an admission by either
Party of any acts of wrongdoing, violation of any statute, law or legal or contractual right.
Group 1 and Xxxxxxxxxxxxx acknowledge that each has willingly to entered into this Agreement
described herein.
23. Review By Counsel. Xxxxxxxxxxxxx and Group 1 acknowledge that they have thoroughly
discussed all aspects of this Agreement and the effect of same with their respective legal counsel,
that they have had a reasonable time to review the Agreement, that they fully understand all the
provisions of the Agreement and are voluntarily entering into this Agreement. The parties further
represent that they have not transferred or assigned to any person or entity any claim involving
the other party or any portion thereof or interest therein.
24. Period Of Consideration And Revocation. Xxxxxxxxxxxxx acknowledges that he has been given
a period of 21 days from April 9, 2005, to review and consider this Agreement before executing it.
He has the right to use as much or as little of the 21-day period as he wishes before executing
this Agreement. Xxxxxxxxxxxxx may revoke this Agreement within 7 days after signing it, in which
case this Agreement and the obligations herein, are null and void. Revocation is only effective if
Xxxxxxxxxxxxx delivers a written notice of revocation to Group 1, c/o Xxxx Xxxxxxx, 000 Xxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, within 7 days after executing the Agreement. Xxxxxxxxxxxxx
understands that Group 1’s obligations under this Agreement do not become effective until after the
7 day revocation period has expired.
25. Execution In Multiple Counterparts. This Agreement may be executed in multiple
counterparts, whether or not all signatories appear on these counterparts, and each counterpart
shall be deemed an original for all purposes. This Agreement shall be deemed performable by all
Parties in Xxxxxx County, Texas and the construction and enforcement of this Agreement shall be
governed by Texas law without regard to its conflicts of law rules.
* * * * *
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I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, THAT I UNDERSTAND ALL OF ITS
TERMS, AND THAT I AM ENTERING INTO IT VOLUNTARILY.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed as of the day
and year first above written.
| X.X. Xxxxxxxxxxxxx, Xx. | ||||
| GROUP 1 AUTOMOTIVE, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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