EXHIBIT 10.39
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into between Group 1
Automotive, Inc. having offices at 950 Echo Lane, Suite 100, Houston, Texas
77024 ("Employer"), and Kevin H. Whalen, an individual currently residing at
3423 Oakland Drive, Sugarland, Texas 77479 ("Employee"), to be effective as of
November 3, 2002.
For and in consideration of the mutual promises, covenants, and
obligations contained herein, Employer and Employee agree as follows:
1. EMPLOYMENT AND DUTIES:
1.1. Employer agrees to employ Employee, and Employee agrees to be
employed by Employer, beginning November 3, 2002 and continuing throughout the
Term (as defined below) of this Agreement, subject to the terms and conditions
of this Agreement.
1.2. Employee shall serve as "Platform President of the Houston Platform"
of Employer. Employee agrees to serve in the assigned position and to perform
diligently and to the best of Employee's abilities the duties and services
appertaining to such position as determined by Employer, as well as such
additional or different duties and services appropriate to such position which
Employee from time to time may be reasonably directed to perform by Employer.
Employee shall at all tunes comply with and be subject to such policies and
procedures as Employer may establish from time to time.
1.3. Employee shall, during the period of Employee's employment by
Employer, devote Employees full business time, energy, and best efforts to the
business and affairs of Employer. Employee may not engage, directly or
indirectly, in any other business, investment, or activity that interferes with
Employee's performance of Employee's duties hereunder, is contrary to the
interests of Employer or any of its subsidiaries or affiliates, or requires any
significant portion of Employee's business time; provided, however, that
Employee may engage in passive personal investments that do not conflict with
the business and affairs of the Employer or any of its subsidiaries or
affiliates or interfere with Employee's performance of his or her duties
hereunder.
1.4. Employee acknowledges and agrees that Employee owes a fiduciary duty
of loyalty, fidelity and allegiance to act at all times in the best interests of
Employer or
any of its subsidiaries or affiliates and to do no act which would injure the
business, interests, or reputation of Employer or any of its subsidiaries or
affiliates. In keeping with these duties, Employee shall make full disclosure to
Employer of all business opportunities pertaining to Employer's business and
shall not appropriate for Employee's own benefit business opportunities
concerning the subject matter of the fiduciary relationship.
1.5. It is agreed that any direct or indirect interest in, connection
with, or benefit from any outside activities, particularly commercial
activities, which interest might in any way adversely affect Employer, or any of
its affiliates, involves a possible conflict of interest. In keeping with
Employee's fiduciary duties to Employer, Employee agrees that Employee shall not
knowingly become involved in a conflict of interest with Employer, or its
affiliates, or upon discovery thereof, allow such a conflict to continue.
Moreover, Employee agrees that Employee shall disclose to Employer's Chief
Executive Officer ("CEO") any facts, which might involve such a conflict of
interest that has not been approved by Employer's President. Employer and
Employee recognize that it is impossible to provide an exhaustive list of
actions or interests, which constitute a "conflict of interest". Moreover,
Employer and Employee recognize there are many borderline situations. In some
instances, full disclosure of facts by Employee to Employer's CEO may be all
that is necessary to enable Employer or its subsidiaries or affiliates to
protect its interests. In others, if no improper motivation appears to exist and
the interests of Employer or its subsidiaries or affiliates have not suffered,
prompt elimination of the outside interest will suffice. In still others, it may
be necessary for Employer to terminate the employment relationship. Employee
agrees that Employer's determination as to whether a conflict of interest exists
shall be conclusive. Employer reserves the right to take such action as, in its
judgment, will end the conflict.
2. COMPENSATION AND BENEFITS:
2.1. Employee's initial base salary under this Agreement shall be
$375,000.00 per annum and shall be paid in semi-monthly installments in
accordance with Employer's standard payroll practice. Employee's base salary may
be increased from time to time by Employer, and after any such change,
Employee's new level of base salary shall be Employee's base salary for purposes
of this Agreement until the effective date of any subsequent change.
2.2 Employee shall also be eligible for incentive compensation, payable
quarterly, pursuant to an incentive compensation plan to be based upon the
achievement of reasonable annual profitability and operating targets mutually
agreed upon by
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Employer and Employee. Such plan for Employee applicable to calendar year 2002
is attached to this Agreement.
2.3. If Employee is granted stock options, Employee will enter into a
separate written stock option agreement pursuant to which Employee shall be
granted the option to acquire common stock of Employer subject to the terms and
conditions of Employer's 1996 Stock Incentive Plan and the stock option
agreement entered into there under. The number of shares, exercise price per
share and other terms of the options shall be as specified in such other written
agreement.
2.4. While employed by Employer, Employee shall be allowed to participate,
on the same basis generally as other employees of Employer, in all general
employee benefit plans and programs, including improvements or modifications of
the same, which on the effective date or thereafter are made available by
Employer to all or substantially all of Employer's employees. Such benefits,
plans, and programs may include, without limitation, medical, health, and dental
care, life insurance, disability protection, deferred compensation, and pension
plans, and Employer will provide Employee with the use of three "Company Cars or
Demos" which will be subject to the policies relative to such vehicles used
within the Houston Platform. Nothing in this Agreement is to be construed or
interpreted to provide greater rights, participation, coverage, or benefits
under such benefit plans or programs than provided to similarly situated
employees pursuant to the terms and conditions of such benefit plans and
programs.
2.5. Employer shall not by reason of this Article 2 be obligated to
institute, maintain, or refrain from changing, amending, or discontinuing, any
such incentive compensation or employee benefit program or plan, so long as such
actions are similarly applicable to covered employees generally. Moreover,
unless specifically provided for in a written plan document adopted by the Board
of Directors of Employer, none of the benefits or arrangements described in this
Article 2 shall be secured or funded in any way, and each shall instead
constitute an unfunded and unsecured promise to pay money in the future
exclusively from the general assets of Employer and its subsidiaries and
affiliates.
2.6. Employer may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
3. TERM OF THIS AGREEMENT, EFFECT OF EXPIRATION OF TERM, AND TERMINATION PRIOR
TO EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION:
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3.1. The term of this Agreement shall be for five (5) years from November
3, 2002 through November 2, 2007. Should Employee remain employed by Employer
beyond the expiration of the Term, such employment shall convert to a
month-to-month relationship terminable at any time by either Employer or
Employee for any reason whatsoever, with or without cause, upon thirty days
notice. Upon such termination of the continued at-will employment relationship
by either Employer or Employee for any reason whatsoever, all future
compensation to which Employee is entitled and all future benefits for which
Employee is eligible shall cease and terminate. Employee shall be entitled to
pro-rata salary through the date of such termination, and Employee shall be
entitled to any incentive compensation actually paid to Employee under Employer
policies through the date of such termination with respect to the operations of
the Employer and its subsidiaries and affiliates during the calendar year in
which Employee's employment with Employer is terminated. Upon termination of
employment, Employee shall repay to Employer all advances received by Employee
from Employer or any of its subsidiaries or affiliates, including all advances
drawn against any bonus.
3.2. Notwithstanding any other provisions of this Agreement, Employer
shall have the right to terminate Employee's employment under this Agreement at
any time for any of the following reasons:
(i) For "cause" upon the determination by Employer's Board of Directors
that `cause' exists for the termination of the employment
relationship. As used in this Section 3.2(i), the term "cause" shall
mean (a) Employee has engaged in negligence, incompetence or
misconduct in the performance of, or Employee's refusal without
proper reason to perform, the duties and services required of
Employee pursuant to this Agreement; (b) Employee has been convicted
of a felony; (c) Employee's material breach of any material
provision of this Agreement or corporate code or policy; (d)
under-performance of the duties and responsibilities of Employee,
including but not limited to failure to meet forecast levels of
profitability; or (e) a manufacturer requires or recommends the
removal of Employee as "dealer manager" of Employer or any Employer
operations pursuant to such manufacturer's rights as franchisor of
the operations managed by Employee. It is expressly acknowledged and
agreed that the decision as to whether "cause" exists for
termination of the employment relationship rests with Employer for
determination.
(ii) for any other reason whatsoever, including termination without
cause, in the sole discretion of Employer;
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(iii) upon Employees death; or
(iv) upon Employee s becoming incapacitated by accident, sickness, or
other circumstance which in the reasonable opinion of a qualified
doctor approved by Employer renders him mentally or physically
incapable of performing the duties and services required of
Employee, and which will continue in the reasonable opinion of such
doctor for a period of not less than 180 days.
The termination of Employee's employment shall constitute a "Termination for
Cause" if made pursuant to Section 3.2(i); the effect of such termination is
specified in Section 3.4. The termination of Employee's employment shall
constitute an "Involuntary Termination" if made pursuant to Section 3.2(ii); the
effect of such termination is specified in Section 3.5. The effect of the
employment relationship being terminated pursuant to Section 3.2(iii) as a
result of Employee's death is specified in Section 3.7. The effect of the
employment relationship being terminated pursuant to Section 3. 2(iv) as a
result of the Employee becoming incapacitated is specified in Section 3.8.
3.3. Notwithstanding any other provisions of this Agreement, Employee
shall have the right to terminate the employment relationship under this
Agreement at any time for any of the following reasons:
(i) a material breach by Employer of any material provision of this
Agreement, which remains uncorrected for 30 days following written
notice of such breach by Employee to Employer's President;
(ii) the dissolution of Employer; or
(iii) for any other reason whatsoever, in the sole discretion of Employee.
The termination of Employee's employment by Employee shall constitute an
"Involuntary Termination" if made pursuant to Section 3.3(i) or 3.3(ii); the
effect of such termination is specified in Section 3.5. The termination of
Employee's employment by Employee shall constitute a "Voluntary Termination" if
made pursuant to Sections 3.3(iii); the effect of such termination is specified
in Section 3.4.
3.4. Upon a "Voluntary Termination" of the employment relationship by
Employee or a termination of the employment relationship for "Cause" by
Employer, all future compensation to which Employee is entitled and all future
benefits for which Employee is eligible shall cease and terminate as of the date
of termination. Employee
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shall be entitled to pro-rata salary through the date of such termination, and
Employee shall be entitled to any incentive compensation actually paid to
Employee under Employer policies through the date of such termination with
respect to the operations of the Employer and its subsidiaries and affiliates
during the calendar year in which Employee's employment with Employer is
terminated.
3.5. Upon an Involuntary Termination of the employment relationship by
either Employer or Employee pursuant to Sections 3.2(ii) or 3.3(i), Employee
shall be entitled, in consideration of Employee's continuing obligations
hereunder after such termination (including, without limitation, Employee's
non-competition obligations), to receive the compensation specified in Section
2.1, payable bi-weekly, as if Employee's employment (which shall cease on the
date of such Involuntary Termination) had continued for the full Term of this
Agreement. Upon an Involuntary Termination of the employment relationship by
Employee pursuant to Sections 3.3(ii), Employee shall be entitled, in
consideration of Employee's continuing obligations hereunder after such
termination (including, without limitation, Employee's non-competition
obligations), to receive in a lump sum payment the compensation specified in
Section 2.1 as if Employee's employment (which shall cease on the date of such
Involuntary Termination) had continued for the full Term of this Agreement.
Employee shall not be under any duty or obligation to seek or accept other
employment following Involuntary Termination and the amounts due Employee
hereunder shall not be reduced or suspended if Employee accepts subsequent
employment. Employee's rights under this Section 3.5 are Employee's sole and
exclusive rights against Employer or its subsidiaries or affiliates, and
Employer's and its subsidiaries' and affiliates' sole and exclusive liability to
Employee under this Agreement, in contact, tort, or otherwise, for any
Involuntary Termination of the employment relationship.
3.6. Employee covenants not to sue or lodge any claim, demand or cause of
action against Employer based on Involuntary Termination for any monies other
than those specified in Section 3.5. If Employee breaches this covenant,
Employer, and its subsidiaries' and affiliates' shall be entitled to recover
from Employee all sums expended by Employer, and its subsidiaries and affiliates
(including costs and attorneys' fees) in connection with such suit, claim,
demand or cause of action. Employer and its subsidiaries and affiliates shall
not be entitled to offset any of the amounts specified in the immediately
preceding sentence against amounts otherwise owing by Employer and its
subsidiaries and affiliates to Employee prior to a final determination under the
terms of the arbitration provisions of this Agreement that Employee has breached
the covenant contained in this Section 3.6.
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3.7. Upon termination of the employment relationship as a result of
Employee's death, Employee's heirs, administrators, or legatees shall be
entitled to Employee's pro rata salary through the date of such termination, and
Employee's heirs, administrators, or legatees shall be entitled to any
individual incentive compensation actually paid to Employee under Employer
policies through the date of such termination with respect to the operations of
the Employer and its subsidiaries and affiliates during the calendar year in
which Employee's employment with Employer is terminated.
3.8. Upon termination of the employment relationship as a result of
Employee's incapacity, Employee shall be entitled to his pro-rata salary through
the date of such termination, and Employee shall be entitled to any individual
incentive compensation actually paid to Employee under Employer policies through
the date of such termination with respect to the operations of the Employer and
its subsidiaries and affiliates during the calendar year in which Employee's
employment with Employer is terminated.
3.9. In all eases, the compensation and benefits payable to Employee under
this Agreement upon termination of the employment relationship shall be reduced
and offset by any amounts to which Employee may otherwise be entitled under any
and all severance plans (excluding any pension, retirement and profit sharing
plans of Employer that may be in effect from time to time) or policies of
Employer or its subsidiaries or affiliates or any successor to all or a portion
of the business or assets of Employer.
3.10. Termination of the employment relationship shall not terminate those
obligations imposed by this Agreement which are continuing in nature, including,
without limitation, Employee's obligations of confidentiality, non-competition
and Employee's continuing obligations with respect to business opportunities
that had been entrusted to Employee by Employer during the employment
relationship.
3.11. This Agreement governs the rights and obligations of Employer and
Employee with respect to Employee's salary and other perquisites of employment.
4. UNITED STATES FOREIGN CORRUPT PRACTICES ACT AND OTHER LAWS:
4.1. Employee shall at all times comply with United States laws applicable
to Employee's actions on behalf of Employer and its subsidiaries and affiliates,
including specifically, without limitation, the United States Foreign Corrupt
Practices Act, generally codified in 15 USC 78 (FCPA), as the FCPA may hereafter
be amended, and/or its successor statutes. If Employee pleads guilty to or nolo
contendre or admits civil or criminal liability under the FCPA or other
applicable United States law, or if a court finds that Employee has personal
civil or criminal liability under the FCPA or other applicable
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United States law, or if a court finds that Employee committed an action
resulting in Employer or any of its subsidiaries having civil or criminal
liability or responsibility under the FCPA or other applicable United States
law, such action or finding shall constitute "cause" for termination under this
Agreement unless Employer's Board of Directors determines that the actions found
to be in violation of the FCPA or other applicable United States law were taken
in good faith and in compliance wit all applicable policies of Employer.
Moreover, to the extent that Employer or any of its subsidiaries is found or
held responsible for any civil or criminal fines or sanctions of any type under
the FCPA or other applicable United States law or suffers other damages as a
result of Employee's actions, Employee shall be responsible for, and shall
reimburse and pay to such Employer an amount of money equal to, such civil or
criminal fines, sanctions or damages. The rights afforded Employer under this
provision are in addition to any and all rights and remedies otherwise afforded
by the law.
5. OWNERSHIP AND PROTECTION OF INFORMATION; COPYRIGHTS:
5.1. Employer owns certain confidential and proprietary information and
trade secrets to which Employee will be given access for the purpose of carrying
out his or her employment responsibilities hereunder. Furthermore, Employer
agrees to provide Employee with confidential and proprietary information and
trade secrets regarding the Employer and its subsidiaries and affiliates, in
order to assist Employee in satisfying his or her obligations hereunder.
5.2 All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by Employee, individually or in conjunction with others, during
Employee's employment by Employer (whether during business hours or otherwise
and whether on Employer's premises or otherwise) which relate to Employer's or
any of its subsidiaries' or affiliates' businesses, products or services
(including, without limitation, all such information relating to corporate
opportunities, research, financial and sales data, pricing and trading terms,
evaluations, opinions, interpretations, acquisition prospects, the identity of
customers or their requirements, the identity of key contacts within the
customer's organizations or within the organization of acquisition prospects, or
marketing and merchandising techniques, prospective names, and marks) shall be
disclosed to Employer and are and shall be the sole and exclusive property of
Employer. Upon termination of Employee's employment, for any reason, Employee
promptly shall deliver the same, and all copies thereof, to Employer.
5.3. Employee will not, at any time during or after his employment by
Employer, make any unauthorized disclosure of any confidential business
information or
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trade secrets of Employer or its subsidiaries or affiliates, or make any use
thereof, except in the carrying out of his employment responsibilities
hereunder. As a result of Employee's employment by Employer, Employee may also
from time to time have access to, or knowledge of, confidential business
information or trade secrets of third parties, such as customers, suppliers,
partners, joint ventures, and the like, of Employer and its subsidiaries and
affiliates. Employee also agrees to preserve and protect the confidentiality of
such third party confidential information and trade secrets to the same extent,
and on the same basis, as Employer's or any of its subsidiaries' or affiliates'
confidential business information and trade secrets.
5.4. If, during Employee's employment by Employer, Employee creates any
original work of authorship fixed in any tangible medium of expression which is
the subject matter of copyright (such as videotapes, written presentations on
acquisitions, computer programs, E-mail, voice mail, electronic databases,
drawings, maps, architectural renditions, models, manuals, brochures, or the
like) relating to Employer's, or any of its subsidiaries' or affiliates'
businesses, products, or services, whether such work is created solely by
Employee or jointly with others (whether during business hours or otherwise and
whether on Employer's or any of its subsidiaries' or affiliates' premises or
otherwise), Employer shall be deemed the author of such work if the work is
prepared by Employee in the scope of his or her employment; or, if the work is
not prepared by Employee within the scope of his or her employment but is
specially ordered by Employer or any of its subsidiaries or affiliates as a
contribution to a collective work, as a part of a motion picture or other
audiovisual work, as a translation, as a supplementary work, as a compilation,
or as an instructional text, then the work shall be considered to be work made
for hire and Employer or any of its subsidiaries or affiliates shall be the
author of the work. If such work is neither prepared by Employee within the
scope of his or her employment nor a work specially ordered that is deemed to be
a work made for hire, then Employee hereby agrees to assign, and by these
presents does assign, to Employer all of Employee's worldwide right, title, and
interest in and to such work and all rights of copyright therein.
5.5 Both during the period of Employee's employment by Employer and
thereafter, Employee shall assist Employer, or any of its subsidiaries or
affiliates and their nominees, at any time, in the protection of Employer's or
any of its subsidiaries' or affiliates' worldwide right, title, and interest in
and to information, ideas, concepts, improvements, discoveries, and inventions,
and its copyrighted works, including without limitation, the execution of all
formal assignment documents requested by Employer or any of its subsidiaries or
affiliates or their nominees and the execution of all lawful oaths and
applications for applications for patents and registration of copyright in the
United States and foreign countries.
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6. POST-EMPLOYMENT NON-COMPETITION OBLIGATIONS:
6.1. As part of the consideration for the compensation and benefits to be
paid and extended to Employee hereunder, and as an additional incentive for
Employer to enter into this Agreement, Employer and Employee agree to the
non-competition provisions of this Article 6. Employee agrees that during the
period of Employee's non-competition obligations hereunder, Employee will not,
directly or indirectly for Employee or for others:
(i) engage in the Restricted Area in any dealership operations
competitive with any such operations conducted by Employer or any of
its subsidiaries or affiliates;
(ii) render advice or services to, or otherwise assist, any other person,
association, or entity who is engaged, directly or indirectly, in
any dealership operations conducted by Employer or any of its
subsidiaries or affiliates;
(iii) encourage or induce any current or former employee of Employer or
any of its subsidiaries or affiliates to leave the employment of
Employer or any of its subsidiaries or affiliates or proselytize,
offer employment, retain, hire or assist in the hiring of any such
employee by any person, association, or entity not affiliated with
Employer or any of its subsidiaries or affiliates; provided,
however, that nothing in this subsection (iii) shall prohibit
Employee from offering employment to any prior employee of Employer
or any of its subsidiaries or affiliates who was not employed by
Employer or any of its subsidiaries or affiliates at any time in the
twelve (12) months prior to the termination of Employee's
employment.
The non-competition obligations set forth in subsections (i) and (ii) of this
Section 6. 1 shall apply during Employee's employment and for a period of three
(3) years after termination of employment. The obligations set forth in
subsection (iii) of this Section 6.1 with respect to employees shall apply
during Employee's employment and for a period of five (5) years after
termination of employment. If Employer or any of its subsidiaries or affiliates
abandons a particular aspect of its dealership operations, that is, ceases such
aspect of its dealership operations with the intention to permanently refrain
from such aspect of its dealership operations, then this post-employment
non-competition covenant shall not apply to such former aspect of that
dealership operation. So long as Employee is a member of the Board of Directors
of Employer, Restricted Area shall mean any
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geographic area or market where Employer or any of its subsidiaries or
affiliated companies are conducting any dealership operations as of the date of
termination of the employment relationship or have during the previous twelve
months conducted such business. Should Employee no longer be a member of the
Board of Directors of Employer, Restricted Area shall mean (i) any county in
which any dealership under the management responsibility of Employee as Platform
President during the term of this Agreement is located and (ii) any county
adjacent to a county described in (i) preceding.
6.2. Employee understands that the foregoing restrictions may limit his
ability to engage in certain business activities during the period provided for
above, but acknowledges that Employee will receive sufficiently high
remuneration and other benefits (e.g., the right to receive compensation under
Section 3.6 for the remainder of the Term upon Involuntary Termination and
access to certain confidential and proprietary information and trade secrets)
under this Agreement to justify such restriction. Employee acknowledges that
money damages would not be sufficient remedy for any breach of this Article 6 by
Employee, and Employer or any of its subsidiaries or affiliates shall be
entitled to enforce the provisions of this Article 6 by terminating any payments
then owing to Employee under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach, without
any requirement for the securing or posting of any bond in connection with such
remedies. Such remedies shall not be deemed the exclusive remedies for a breach
of this Article 6, but shall be in addition to all remedies available at law or
in equity to Employer or any of its subsidiaries or affiliates, including,
without limitation, the recovery of damages from Employee and his agents
involved in such breach.
6.3. It is expressly understood that the restrictions contained in this
Article 6 are related to and result from the agreements of Employer and Employee
in Article 5 and agreed that Employer and Employee consider the restrictions
contained in this Article 6 to be reasonable and necessary to protect the
confidential and proprietary information and trade secrets of Employer and its
subsidiaries and affiliates. Nevertheless, if any of the aforesaid restrictions
are found by a court having jurisdiction to be unreasonable, or overly broad as
to geographic area or time, or otherwise unenforceable, the parties intend for
the restrictions therein set forth to be modified by such courts so as to be
reasonable and enforceable and, as so modified by the court, to be fully
enforced.
7. MISCELLANEOUS:
7.1. For purposes of this Agreement the terms "affiliates" or "affiliated"
means an entity who directly, or indirectly trough one or more intermediaries,
controls, is controlled by, or is under common control with Employer.
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7.2. Employee shall refrain, both during the employment relationship and
after the employment relationship terminates, from publishing any oral or
written statements about Employer or any of its subsidiaries' or affiliates'
directors, officers, employees, agents or representatives that are slanderous,
libelous, or defamatory; or that disclose private or confidential information
about Employer or any of its subsidiaries' or affiliates' business affairs,
officers, employees, agents, or representatives; or that constitute an intrusion
into the seclusion or private lives of Employer or any of its subsidiaries' or
affiliates' directors, officers, employees, agents, or representatives; or that
give rise to unreasonable publicity about the private lives of Employer or any
of its subsidiaries' or affiliates' officers, employees, agents, or
representatives; or that place Employer or its subsidiaries' or affiliates' or
its officers, employees, agents, or representatives in a false light before the
public; or that constitute a misappropriation of the name or likeness Employer
or any of its subsidiaries' or affiliates' or its officers, employees, agents,
or representatives. A violation or threatened violation of this prohibition may
be enjoined.
7.3. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Employer to:
Group 1 Automotive, Inc.
950 Echo Lane, Suite 110
Houston, TX 77024
Attn: Chief Executive Officer
with a copy to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, TX 770024760
Attn: John S. Watson
If to Employee, to the address shown on the first page hereof.
Either Employer or Employee may furnish a change of address to the other in
writing in accordance herewith, except that notices of changes of address shall
be effective only upon receipt.
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7.4. This Agreement shall be governed in all respects by the laws of the
State of Texas, excluding any conflict-of-law rule or principle that might refer
the construction of the Agreement to the laws of another State or country.
7.5. No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
7.6. It is a desire and intent of the parties that the terms, provisions,
covenants, and remedies contained in this Agreement shall be enforceable to the
fullest extent permitted by law. If any such term, provision, covenant, or
remedy of this Agreement or the application thereof to any person, association,
or entity or circumstances shall, to any extent, be construed to be invalid or
unenforceable in whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its enforceability under
the applicable law to the fullest extent permitted by law. In any case, the
remaining provisions of this Agreement or the application thereof to any person,
association, or entity or circumstances other than those to which they have been
held invalid or unenforceable, shall remain in full force and effect.
7.7. Any and all claims, demands, cause of action, disputes, controversies
and other matters in question arising out of or relating to this Agreement, any
provision hereof, the alleged breath thereof, or in any way relating to the
subject matter of this Agreement, involving Employer, its subsidiaries and
affiliates and Employee (all of which are referred to herein as "Claims"), even
though some or all of such Claims allegedly are extra-contractual in nature,
whether such Claims sound in contract, tort or otherwise, at law or in equity,
under state or federal law, whether provided by statute or the common law, for
damages or any other relief, including equitable relief and specific
performance, shall be resolved and decided by binding arbitration pursuant to
the Federal Arbitration Act in accordance with the Commercial Arbitration Rules
then in effect with the American Arbitration Association. In the arbitration
proceeding the Employee shall select one arbitrator, the Employer shall select
one arbitrator and the two arbitrators so selected shall select a third
arbitrator. Should one party fail to select an arbitrator within five days after
notice of the appointment of an arbitrator by the other party or should the two
arbitrators selected by the Employee and the Employer fail to select an
arbitrator within ten days after the date of the appointment of the last of such
two arbitrators, any person sitting as a Judge of the United States District
Court of the Southern District of Texas, Houston Division, upon application of
the Employee or the Employer, shall appoint an arbitrator to fill such space
with the same force and effect as though such
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arbitrator had been appointed in accordance with the immediately preceding
sentence of this Section 7.7. The decision of a majority of the arbitrators
shall be binding on the Employee, the Employer and its subsidiaries and
affiliates. The arbitration proceeding shall be conducted in Houston, Texas.
Judgment upon any award rendered in any such arbitration proceeding may be
entered by any federal or state court having jurisdiction.
This agreement to arbitrate shall be enforceable in either federal or
state court. The enforcement of this agreement to arbitrate and all procedural
aspects of this Agreement to arbitrate, including but not limited to, the
construction and interpretation of this agreement to arbitrate, the scope of the
arbitrable issues, allegations of waiver, delay or defenses to arbitrability,
and the rules governing the conduct of the arbitration, shall be governed by and
construed pursuant to the Federal Arbitration Act.
In deciding the substance of any such Claim, the Arbitrators shall apply
the substantive laws of the State of Texas; provided, however, that the
Arbitrators shall have no authority to award treble, exemplary or punitive type
damages under any circumstances regardless of whether such damages may be
available under Texas law, the parties hereby waiving their right, if any, to
recover treble, exemplary or punitive type damages in connection with any such
Claims.
7.8. This Agreement shall be binding upon and inure to the benefit of
Employer its subsidiaries and affiliates and any other person, association, or
entity which may hereafter acquire or succeed to all or a portion of the
business or assets of Employer by any means whether direct or indirect, by
purchase, merger, consolidation, or otherwise. Employee's rights and obligations
under this Agreement are personal and such rights, benefits, and obligations of
Employee shall not be voluntarily or involuntarily assigned, alienated, or
transferred, whether by operation of law or otherwise, by Employee without the
prior written consent of Employer.
7.9. Except as provided in (1) written company policies promulgated by
Employer dealing with issues such as securities trading, business ethics,
governmental affairs and political contributions, consulting fees, commissions
and other payments, compliance with law, investments and outside business
interests as officers and employees, reporting responsibilities, administrative
compliance, and the like, (2) the written benefits, plans, and programs
referenced in Sections 2.2, 2.3 and 2.4, or (3) any signed written agreements
contemporaneously or hereafter executed by Employer and Employee, this Agreement
constitutes the entire agreement of the parties with regard to such subject
matters, and contains all of the covenants, promises, representations,
warranties, and agreements between the parties with respect to such subject
matters and replaces and merges previous agreements and discussions pertaining
to the employment
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relationship between Employer and Employee. Specifically, but not by way of
limitation, any other employment agreement or arrangement in existence as of the
date hereof between Employer or any of its subsidiaries or affiliates and
Employee is hereby canceled and Employee and Employer hereby irrevocably waive
and renounce all of Employee's and Employer's rights and claims under any such
agreement or arrangement.
IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement in multiple originals to be effective on the date first stated above.
GROUP 1 AUTOMOTIVE, INC.
By:/s/ B.B. Hollingsworth, Jr.
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B.B. Hollingsworth, Jr.
Chairman, President and Chief
Executive Officer
/s/ Kevin H. Whalen
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Kevin H. Whalen