exv10w36






Exhibit 10.36




PHANTOM STOCK AGREEMENT




     THIS PHANTOM STOCK AGREEMENT (this “Agreement”) is made as of the effective date set
forth on the attached notice of grant (the “Grant Notice”), between GROUP 1 AUTOMOTIVE,
INC., a Delaware corporation (the “Company”), and the Director set forth on the Grant
Notice (“Director”).



     1. Award of Phantom Shares. Pursuant to the GROUP 1 AUTOMOTIVE, INC. 2007 LONG TERM
INCENTIVE PLAN, as amended (the “Plan”), the Company hereby awards the number of phantom
shares of the Company (the “Phantom Shares”) set forth in the Grant Notice to Director,
subject to the terms and restrictions set forth herein. Director acknowledges receipt of a copy of
the Plan, and agrees that this award of Phantom Shares shall be subject to all of the terms and
provisions of the Plan, including future amendments thereto, if any, pursuant to the terms thereof.
In the event of any conflict between the terms of this Agreement and the Plan, the Plan shall
control. The Plan and the Grant Notice are incorporated herein by reference as a part of this
Agreement.



     2. Vesting and Forfeiture of Phantom Shares. (a) The Phantom Shares shall become
vested in accordance with the schedule set forth on the Grant Notice, provided that Director has
been a member of the Board continuously from the date of this Agreement through the applicable
vesting date set forth on the Grant Notice. Notwithstanding the foregoing, all unvested Phantom
Shares shall become fully vested on the date Director’s membership on the Board is terminated by
reason of death, “Disability” (which shall mean that Director has become disabled within
the meaning of section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the
“Code”), and any regulations or administrative guidance issued thereunder) or Retirement.
For purposes of this Agreement, “Retirement” shall mean Director’s resignation of his membership on
the Board or Director’ failure to be re-elected as a member of the Board.




          (b) While a Phantom Share remains outstanding pursuant to this Agreement, an amount equivalent
to the cash dividends paid with respect to a share of the Company’s common stock (“Common
Stock”) during such period shall be held by the Company without interest until a share of
Common Stock is deliverable to Director with respect to such Phantom Share or such Phantom Share is
forfeited, and then such amount shall be paid to Director or forfeited, as the case may be.




          (c) In the event of the termination of Director’s membership on the Board for any reason other
than death, Disability or Retirement, Director shall, for no consideration, forfeit to the Company
all unvested Phantom Shares.



     3. Delivery/Certificates. Upon termination of Director’s membership on the Board for
any reason, the Company shall cause a certificate or certificates for shares of Common Stock to be
issued without legend (except for any legend required pursuant to applicable securities laws or any
other agreement to which Director is a party) in the name of Director in cancellation for the
Phantom Shares that are vested, if any, as of the date of such termination. Notwithstanding the
foregoing however, issuance of Common Stock pursuant to this Agreement shall be made upon
Director’s “separation from service” within the meaning of Section 409A of the Code and may



1









 




not be made prior to the first day such issuance would not be subject to the additional tax
imposed by Section 409A of the Code.




     The Company, in its sole discretion, may elect to deliver certificates either in certificate
form or electronically to a brokerage account established for Director’s benefit at a
brokerage/financial institution selected by the Company. Director agrees to complete and sign any
documents and take additional action that the Company may request to enable it to deliver the
shares on Director’s behalf.



     4. Nontransferability of Phantom Shares. Director may not sell, transfer, pledge,
exchange, hypothecate or dispose of the Phantom Shares. A breach of these terms of this Agreement
shall cause a forfeiture of the Phantom Shares.



     5. Withholding of Tax. To the extent that the grant or vesting of the Phantom Shares,
or the delivery of Common Stock with respect thereto, results in compensation income to Director
for federal or state income tax purposes, Director shall deliver to the Company such amount of
money at such time as the Company may require to meet its obligation under applicable tax laws or
regulations or make such other arrangements to satisfy such withholding obligation as the Company,
in its sole discretion, may approve. In addition, the Company may withhold shares of Common Stock
(valued at their fair market value on the date of withholding of such shares) otherwise to be
delivered to Director to satisfy its withholding obligations.



     6. Status of Stock. Director agrees that the Common Stock that may be issued under
this Agreement will not be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable securities laws, whether federal or state, or the Company’s Code of
Conduct. Director also agrees that (a) the certificates representing shares of Common Stock that
may be issued under this Agreement may bear such legend or legends as the Committee deems
appropriate in order to assure compliance with applicable securities laws, (b) the Company may
refuse to register the transfer of such shares of Common Stock on the stock transfer records of the
Company if such proposed transfer would in the opinion of counsel satisfactory to the Company
constitute a violation of any applicable securities law, and (c) the Company may give related
instructions to its transfer agent, if any, to stop registration of the transfer of such shares of
Common Stock.



     7. Board Membership. Nothing in the adoption of the Plan, nor the award of Phantom
Shares thereunder pursuant to this Agreement, shall confer upon Director the right to continued
membership on the Board or limit in any way the right of the Board or the stockholders of the
Company to terminate Director’s membership on the Board at any time. Any question as to whether
and when there has been a termination of Director’s membership on the Board, and the cause of such
termination, shall be determined by the Committee, and its determination shall be final.



     8. Entire Agreement; Amendment. This Agreement and the documents incorporated by
reference herein replace and merge all previous agreements and discussions relating to the same or
similar subject matters between Director and the Company and constitute the entire agreement
between Director and the Company with respect to the subject matter of this



2









 




Agreement. All prior understandings and agreements, if any, among the parties hereto relating
to the subject matter hereof are hereby null and void and of no further force and effect.




     Except as provided below, any modification of this Agreement shall be effective only if it is
in writing and signed by both Director and an authorized officer of the Company. Notwithstanding
anything in the Plan or this Agreement to the contrary, if the Committee determines that the terms
of this grant do not, in whole or in part, satisfy the requirements of Section 409A of the Code,
the Committee, in its sole discretion, may unilaterally modify this Agreement in such manner as it
deems appropriate to comply with such section and any regulations or administrative guidance issued
thereunder.



     9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
any successors to the Company and all persons lawfully claiming under Director.



     10. Controlling Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to conflicts of laws principles thereof.




3