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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into between Group
1 Automotive, Inc., a Delaware corporation having offices at 950 Echo Lane,
Suite 350, Houston, Texas 77024 ("Group 1"), Koons Ford, Inc., a Florida
corporation and a wholly owned subsidiary of Group 1 ("Employer"), and James S.
Carroll, an individual currently residing at 13880 Stirling Road, Fort
Lauderdale, Florida 33330 ("Employee"), to be effective as of March 16, 1998.
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 March 16, 1998 and continuing throughout the
Term (as defined below) of this Agreement, subject to the terms and conditions
of this Agreement. In addition, Employee shall perform management services (as
determined in accordance with Section 1.2 hereof) for Courtesy Ford, Inc.
("Courtesy"), Perimeter Ford, Inc. ("Perimeter") and such other dealerships of
Group 1 as may be mutually agreed upon between Employee and Group 1 (Employer,
Courtesy, Perimeter and such other dealerships are collectively refereed to
herein as the "Dealerships Under Management").
1.2. Employee shall serve as President of Employer, Courtesy, as
Chairman of Perimeter, and shall serve in such offices of the other Dealerships
Under Management as may be mutually agreed by Employee and Group 1. Employee
agrees to serve in the assigned positions and to perform diligently and to the
best of Employee's abilities the duties and services appertaining to such
positions as determined by Group 1, as well as such additional or different
duties and services appropriate to such positions which Employee from time to
time may be reasonably directed to perform by Group 1. Employee shall at all
times comply with and be subject to such policies and procedures as Group 1 and
the Dealerships Under Management may establish from time to time.
1.3. Employee shall, during the period of Employee's employment by
Employer, devote Employee's full business time, energy, and best efforts to the
business and affairs of the Dealerships Under Management. 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
duties hereunder. It is specifically acknowledged that Employee's investments
in Koons Development Co., K.C. Partnership, World Partner Enterprises, Ltd.
(each owners of the real property of the dealership facilities leased to
subsidiaries of Group 1 under agreements of even date herewith), Shamrock Life
Insurance Company, Shamrock Reinsurance Company, Ltd., VPC Holding Corp.,
Vehicle Protection Corp. (credit life and supplemental warranty entities not
sold to Group 1 under the Agreement and Plan of Reorganization by and among
Group 1, Koons Merger, Inc., Koons Ford, Inc. and the stockholders of Koons
Ford, Inc. dated as of December 17, 1997 (the "Plan of Reorganization"), which
continuing activity will be the "runoff" of business pre- existing this
Agreement) and J. Carroll Enterprises, Inc. (the management company which will
manage Employee's investments in the preceding entities) will not constitute a
violation of this Section 1.3
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provided that the management of such investments do not require a significant
portion of Employee's business time or interfere with Employee's performance of
his 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 the business of Employer or any of its subsidiaries or affiliates and shall
not appropriate for Employee's own benefit business opportunities concerning
the subject matter of the fiduciary relationship. Exercise of the right
granted under Section 10.1(a) of the Plan of Reorganization will not constitute
a violation of this Section 1.4.
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 subsidiaries or affiliates, involves a possible
conflict of interest. In keeping with Employee's fiduciary duties to Employer
and its subsidiaries and affiliates, Employee agrees that Employee shall not
knowingly become involved in a conflict of interest with Employer, or any of
its subsidiaries or affiliates, or upon discovery thereof, allow such a
conflict to continue. Moreover, Employee agrees that Employee shall disclose
to Group 1's General Counsel (who shall be Group 1's outside General Counsel
unless Group 1 has employed an inside General Counsel) any facts which might
involve such a conflict of interest that has not been approved by Group 1's
President. Employer, Group 1 and Employee recognize that it is impossible to
provide an exhaustive list of actions or interests which constitute a "conflict
of interest". Moreover, Employer, Group 1 and Employee recognize there are
many borderline situations. In some instances, full disclosure of facts by
Employee to Group 1's General Counsel may be all that is necessary to enable
Employer or its subsidiaries or affiliates to protect their 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 or Group 1 to terminate the employment relationship.
Employee agrees that Group 1's determination as to whether a conflict of
interest exists shall be conclusive. Employer and Group 1 reserve the right to
take such action as, in their judgment, will end the conflict. It is
acknowledged that the outside activities described in Sections 1.3 and 1.4 do
not constitute a violation of this Section 1.5.
2. COMPENSATION AND BENEFITS:
2.1. (i) Employee's initial base salary under this Agreement shall
be $300,000.00 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.
(ii) In addition to the compensation of Sections 2.1(i) and
2.2, employee will be entitled to $260,000.00 per annum, paid in semi-monthly
installments, for each of the five years subsequent to the date of this
Agreement.
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2.2 Employee's participation in bonus plans shall be governed by
the bonus and incentive plans adopted by the Board of Directors of Employer in
which Employee is a participant.
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 Group 1 subject to the terms and
conditions of Group 1's 1996 Stock Incentive Plan and the stock option
agreement entered into thereunder. 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, and pension
plans. 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:
3.1. The term of this Agreement shall be for five (5) years from
March 16, 1998 through March 15, 2003. 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 any quarterly
incentive compensation previously payable with respect to full quarters
completed prior to the date of termination, but Employee shall not be entitled
to any incentive compensation with respect to full quarters not completed prior
to the date of termination. 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.
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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 Group 1'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 gross
negligence, gross incompetence or willful misconduct in the
performance of, or Employee's willful 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; or (c) Employee's material breach of
any material provision of this Agreement or corporate code or
policy, which breach remains uncorrected for 30 days following
Employer's delivery of written notice of such breach to
Employee. It is expressly acknowledged and agreed that the
decision as to whether "cause" exists for termination of the
employment relationship by Employer is delegated to Group 1's
Board of Directors for determination. Employee, if he so
requests, after reasonable notice of such Board of Directors
meeting, shall be entitled to be heard before the Board of
Directors;
(ii) for any other reason whatsoever, including termination without
cause, in the sole discretion of Group 1's Board of Directors;
(iii) upon Employee's 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's Board of Directors
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 or a material breach by Group 1 of any material
provision of the Plan of Reorganization, in each case which
remains uncorrected for 30 days following
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written notice of such breach by Employee to Employer's or
Group 1's Board of Directors, as appropriate;
(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. Subject to the provisions of Section 3.12, 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
shall be entitled to pro rata salary through the date of such termination, and
any quarterly incentive compensation previously payable with respect to full
quarters completed prior to the date of termination, but Employee shall not be
entitled to any incentive compensation with respect to full quarters not
completed prior to the date of termination.
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 contract, 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 or any of its subsidiaries or affiliates 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
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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.
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
which has not been paid, but Employee's heirs, administrators, or legatees
shall not be entitled to any individual incentive compensation 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 which has not been paid, but Employee
shall not be entitled to any individual incentive compensation 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 cases, 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 or any of its
subsidiaries or affiliates 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.
3.12. Notwithstanding anything to the contrary in this Section 3,
any compensation payable to Employee under Section 2.1.(ii) of this Agreement
will remain payable according to the terms thereof and will not be affected by
any termination of employment under this Agreement.
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 United States law, or if a court finds that Employee committed an
action resulting in Employer or any of its subsidiaries or affiliates having
civil or criminal liability or responsibility under the FCPA or other
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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 with
all applicable policies of Employer. Moreover, to the extent that Employer or
any of its subsidiaries or affiliates 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 and its subsidiaries and affiliates own 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 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 venturers, 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. Information which is common knowledge within the automotive retailing
industry is not included under the provisions of this Section 5.3.
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
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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.
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, within twelve (12) miles of
or in the county of any Dealership Under Management as of the date of
termination of the employment relationship or any of Employee's Dealerships
Under Management during the previous twelve months:
(i) engage in any business competitive with any line of business
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 business competitive with any line of
business 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,
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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 (i.e., this subsection (iii) shall not
apply to any prior employee who was not employed by Employer
during the twelve (12) months preceding the termination of
Employee).
6.2. The non-competition obligations set forth in subsections (i),
(ii) and (iii) of this Section 6.1 shall apply during Employee's employment and
for a period of three (3) years after termination of employment. If Employer
and its subsidiaries and affiliates abandon a particular aspect of their
business, that is, ceases such aspect of their business with the intention to
permanently refrain from such aspect of their business, then this
post-employment non- competition covenant shall not apply to such former aspect
of that business.
Further, Employee will not engage in these restricted activities or
assist in the industry consolidation efforts on behalf of any publicly held
entity in the automotive retailing industry (nor any entity with the ultimate
intention of becoming a publicly held entity or being acquired in any manner by
a publicly held entity), regardless of geographic area or market; provided,
however, that this paragraph shall not prohibit Employee from selling, to a
publicly held entity, any dealership acquired by him in full compliance with
his post-employment non-competition obligations hereunder and held by him for
at least one year.
6.3. Employee understands that the foregoing restrictions may limit
his ability to engage in certain businesses 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 3.5 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 a 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 (except for payments
payable to Employee under Section 2.1(ii)) 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.
6.4. 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 reasonably necessary to protect
the legitimate business interests of Employer and its subsidiaries and
affiliates, including 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
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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.
6.5. Notwithstanding the foregoing, the non-competition obligations
of this Article 6 shall not apply to (x) the leasing of property or facilities
owned by the Employee or his affiliates to a competitor of Group 1 if such
property or facilities were previously leased to Group 1 under a lease
agreement which Group 1 materially breached, failed to renew or terminated (for
reasons other than lessor's breach), or (y) the operation and management of any
dealership purchased pursuant to Section 10.1(b) of the Plan of Reorganization.
6.6. The parties hereto expressly acknowledge that Group 1's and
Employer's rights under this Article 6 are assignable and that such rights
shall be fully enforceable by any of Group 1's or Employer's assignees or
successors in interest.
7. MISCELLANEOUS:
7.1. For purposes of this Agreement the terms "affiliates" or
"affiliated" means an entity who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
Employer. For purposes of this Agreement the term "control" (including the
terms "controlled," "controlled by" and "under common control with") means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management or policies of an individual or
entity, whether through the ownership of stock or as a trustee or executor, by
contract or credit arrangement or otherwise.
7.2. Employer, Group 1 and Employee shall refrain, both during the
employment relationship and after the employment relationship terminates, from
making any negative or critical statements about each other or any of their
respective affiliates or such entities' directors, officers, employees, agents
or representatives or disclosing any conflicts with same, or from publishing
any oral or written statements about each other or any of their respective
subsidiaries' or affiliates' directors, officers, employees, agents or
representatives that are slanderous, libelous, or defamatory; or that disclose
private or confidential information about each other or any of their respective
subsidiaries' or affiliates' business affairs or about their respective
directors, officers, employees, agents, or representatives; or that constitute
an intrusion into the seclusion or private lives of each other or any of their
respective affiliates, directors, officers, employees, agents, or
representatives; or that give rise to unreasonable publicity about the private
lives of each other or any of their respective subsidiaries, affiliates,
officers, employees, agents, or representatives; or that place each other or
any of their respective affiliates, officers, employees, agents, or
representatives in a false light before the public; or that constitute a
misappropriation of the name or likeness of each other or any of their
respective subsidiaries, affiliates, 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:
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If to Employer to:
Group 1 Automotive, Inc.
950 Echo Lane, Suite 350
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 77002-6760
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.
7.4. This Agreement shall be governed in all respects by the laws
of the State of Florida, 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, causes of action, disputes,
controversies and other matters in question arising out of or relating to this
Agreement, any provision hereof, the alleged breach 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
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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 Florida, 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 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 Broward
County, Florida. 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 Florida; 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 Florida 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 of 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 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
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or any of its subsidiaries or affiliates and Employee is hereby canceled and
Employee hereby irrevocably waives and renounces all of Employee's rights and
claims under any such agreement or arrangement.
7.10. The reasonable costs of resolution of any dispute arising
under this Agreement shall be borne by the party losing such dispute.
7.11. The parties hereto expressly acknowledge that Group 1's and
Employer's rights under this Agreement are assignable and that such rights
shall be fully enforceable by any of Group 1's or Employer's assignees or
successors in interest.
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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/ JOHN T. TURNER
--------------------------
Name: John T. Turner
Title: Senior Vice President
KOONS FORD, INC.
By: /s/ WILLIAM C. CARROLL
-------------------------------------
Name: William C. Carroll
Title: Vice President
/s/ JAMES S. CARROLL
---------------------------------
Employee
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