Document:

Exhibit_10_18_Severance_Benefit_Plan

Exhibit 10.18
RUCKUS WIRELESS, INC. 
SEVERANCE BENEFIT PLAN
1.INTRODUCTION.  This Ruckus Wireless, Inc. Severance Benefit Plan (the “Plan”) is established by Ruckus Wireless, Inc. (the “Company”) on February 28, 2013 (the “Effective Date”).  The Plan provides for severance and change in control benefits to selected U.S. employees of the Company who are designated as participants in the Plan.  This document, together with the Participation Notice, constitutes the Summary Plan Description for the Plan. 
2.    PAYMENTS & BENEFITS.  
(a)    If there is a Qualifying Termination and the Participant signs a Release within 45 days following the Qualifying Termination and does not revoke the Release as permitted by law, the Company will provide the following payments and benefits, subject to the terms of the Plan, on the 60th day following the Qualifying Termination:  
(i)    Cash Severance.  The Company will make a lump sum cash payment to the Participant in an amount equal to the Participant’s Monthly Base Salary times the number of months set forth in the Participant’s Participation Notice.  If the Qualifying Termination is a Change in Control Termination, the lump sum cash payment will include an amount equal to one twelfth of Participant’s Annual Target Bonus times the number of months set forth in the Participant’s Participation Notice.
(ii)    Health Insurance Premiums.  If the Participant timely elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (together with any state law of similar effect, “COBRA”), the Company will pay the full amount of the Participant’s COBRA premiums, or will provide coverage under the Company’s self-funded broad based health insurance plans, on behalf of the Participant, including coverage for the Participant’s eligible dependents, in any such case as and when such premiums or coverage amounts would be due if paid for by the Participant, until the earliest to occur of (i) the end of the number of months set forth in the Participant’s Participation Notice, (ii) the expiration of the Participant’s eligibility for the continuation coverage under COBRA, and (iii) the date when the Participant becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (such period from the date of the Qualifying Termination through the earliest to occur of the dates set forth in clause (i) through (iii), the “COBRA Payment Period”).  These payments will be subject to applicable tax withholdings, including as necessary to avoid a violation of, or penalties under, the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including, without limitation, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act).  On the 60th day following the Qualifying Termination, the Company will make the first payment under this paragraph equal to the aggregate amount of payments that the Company would have paid through such date had such payments commenced on the date of the Qualifying Termination, with the balance of the payments paid thereafter on the original schedule.  In all cases, if the Participant becomes eligible for coverage under another employer’s group health plan or otherwise ceases to be eligible for COBRA during the COBRA Payment Period, the Participant must immediately notify the Company of such event, and all payments and obligations under this paragraph will cease.  Any insurance premiums that are paid by the Company will not include any amounts payable by the Participant under an Internal Revenue Code Section 125 health care reimbursement plan, which amounts, if any, are the sole responsibility of the Participant.
(iii)    Double Trigger Vesting.  If a Qualifying Termination is a Change in Control Termination, each of the Participant’s then outstanding and unvested compensatory equity awards will vest, and, as applicable, become exercisable, effective as of immediately prior to the Change in Control Termination, as to the percentage of unvested shares per equity award specified in the Participant’s Participation Notice.
3.    PARTICIPATION.  The Plan Administrator will select the Participants and will deliver a notice to each Participant, substantially in the form attached hereto as the “Participation Notice”, informing the employee that he or she is eligible to participate in the Plan.  Each employee of the Company who receives a Participation Notice and timely returns a signed copy of the Participation Notice to the Company is a “Participant” in the Plan.   

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4.    EXCEPTIONS TO ELIGIBILITY FOR BENEFITS; TERMINATION AND/OR RECOUPMENT OF BENEFITS
(a)    Exceptions to Benefits.  Notwithstanding anything to the contrary herein, a Participant will not receive benefits under the Plan (or will receive reduced benefits under the Plan) in the following circumstances:
(i)    The Participant has not entered into the Company’s standard form of Employee Proprietary Information And Inventions Agreement or any similar or successor document (the “Confidentiality Agreement”). 
(ii)    The Participant has failed to return all Company Property within 10 days after receiving written notice from the Company asking for the return of some or all Company Property.  For this purpose, “Company Property” means all material paper and electronic Company documents (and all copies thereof) created and/or received by the Participant during the Participant’s period of employment with the Company and other material Company materials and property that the Participant has in the Participant’s possession or control, including, without limitation, materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof, in whole or in part).  As a condition to receiving benefits under the Plan, a Participant must not make or retain copies, reproductions or summaries of any such Company documents, materials or property.  However, a Participant is not required to return the Participant’s personal copies of documents evidencing the Participant’s hire, termination, compensation, benefits and stock options and any other documentation received as a stockholder of the Company.
(b)    Termination and/or Recoupment of Benefits.  
(i)    A Participant’s right to receive benefits under the Plan will terminate immediately if, at any time prior to or during the period for which the Participant is receiving benefits under the Plan, the Participant, without the prior written approval of the Plan Administrator, (1) willfully breaches a material provision of the Confidentiality Agreement and/or any obligations of confidentiality, non-solicitation, non-disparagement, no conflicts or non-competition set forth in the Participant’s employment agreement, offer letter or under applicable law; (2) encourages or solicits any of the Company’s then current employees to leave the Company’s employ for any reason or interferes in any other manner with employment relationships at the time existing between the Company and its then current employees; or (3) induces any of the Company’s then current clients, customers, suppliers, vendors, distributors, licensors, licensees, or other third party to terminate their existing business relationship with the Company or interferes in any other adverse manner with any existing business relationship between the Company and any then current client, customer, supplier, vendor, distributor, licensor, licensee, or other third party.  Further, during the period for which the Participant is receiving benefits under the Plan, the Participant agrees to voluntarily cooperate with the Company by making himself or herself reasonably available without further compensation to assist with any threatened or pending litigation against the Company and any pending patent applications and if a Participant fails to do so, his or her benefits under the Plan will terminate immediately.
5.    CONDITIONS AND LIMITATIONS ON BENEFITS. 
(a)    Prior Agreements.  By accepting participation in the Plan, the Participant irrevocably waives the Participant’s rights to any severance benefits (including vesting acceleration) that would be paid on a Qualifying Termination under any offer letter or employment agreement with the Company that is in effect on the date the Participant signs the Participation Notice.  The payments pursuant to the Plan are in addition to, and not in lieu of, any accrued but unpaid salary, bonuses or employee welfare benefits to which a Participant is entitled for the period ending with the Participant’s Qualifying Termination.
(b)    Mitigation.  Except as otherwise specifically provided in the Plan, a Participant will not be required to mitigate damages or the amount of any payment provided under the Plan by seeking other employment or otherwise, nor will the amount of any payment provided for under the Plan be reduced by any compensation earned by a Participant as a result of employment by another employer or any retirement benefits received by such Participant after the date of the Participant’s termination of employment with the Company.
(c)    Indebtedness of Participants.  If a Participant is indebted to the Company on the effective date of the Participant’s Qualifying Termination, the Company reserves the right to offset the payment of any benefits under the Plan by the amount of such indebtedness.  Such offset will  be made in accordance with all applicable laws.  The Participant’s execution of the Participation Notice constitutes knowing written consent to the foregoing.
(d)    Parachute Payments.  This section explains what happens if any payments or benefits owed under the Plan are deemed to be “parachute payments” that would be subject to excise tax under the Code.  Except as otherwise expressly provided in a written agreement between a Participant and the Company, if any payment or benefit the Participant would receive in connection with a Change in Control from the Company or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 

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280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount.  The “Reduced Amount” will be either (A) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (B) the largest portion, up to and including the total, of the Payment, whichever amount (clause (A) or (B)), after taking into account all applicable federal, state, provincial, foreign, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Participant’s receipt, on an after-tax basis, of the greatest economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits paid to the Participant.  Within any such category of Payments (that is, clause (1), (2), (3) or (4)), a reduction will occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the Code and then with respect to amounts that are. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of the Participant’s applicable type of equity award (i.e., earliest granted equity awards are cancelled last).
6.    TAX MATTERS.
(a)    Withholding. All payments and benefits under the Plan will be subject to all applicable deductions and withholdings, including, without limitation, obligations to withhold for federal, state, provincial, foreign and local income and employment taxes.
(b)    Tax Advice.  By becoming a Participant in the Plan, the Participant agrees to review with Participant’s own tax advisors the federal, state, provincial, local, and foreign tax consequences of participation in the Plan.  The Participant will rely solely on such advisors and not on any statements or representations of the Company or any of its agents.  The Participant understands that the Participant (and not the Company) will be responsible for the Participant’s own tax liability that may arise as a result of becoming a Participant in the Plan.
(c)    Application of Code Section 409A.  This section explains how certain Plan provisions will be interpreted and applied in effort to avoid excise tax under the deferred compensation provisions of the Code.  It is intended that all of the benefits provided under the Plan satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5), and 1.409A-1(b)(9), and the Plan will be construed to the greatest extent possible as consistent with those provisions.  To the extent not so exempt, the Plan (and any definitions in the Plan) will be construed in a manner that complies with Section 409A, and incorporates by reference all required definitions and payment terms.  For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), a Participant’s right to receive any installment payments under the Plan will be treated as a right to receive a series of separate payments and, accordingly, each installment payment under the Plan will at all times be considered a separate and distinct payment.  If any of the payments upon a Separation from Service provided under the Plan (or under any other arrangement with the Participant) constitute “deferred compensation” under Section 409A and if the Participant is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i), at the time of the Participant’s Separation from Service, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments upon a Separation from Service will be delayed as follows: on the earlier to occur of (i) the date that is six months and one day after the effective date of the Participant’s Separation from Service, and (ii) the date of the Participant’s death (such earlier date, the “Delayed Initial Payment Date”), the Company will (A) pay to the Participant a lump sum amount equal to the sum of the payments upon Separation from Service that the Participant would otherwise have received through the Delayed Initial Payment Date if the commencement of the payments had not been delayed pursuant to this paragraph, and (B) commence paying the balance of the payments in accordance with the applicable payment schedules set forth above.  No interest will be due on any amounts so deferred.  
7.    CLAWBACK; RECOVERY.  All payments and severance benefits provided under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law.  No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason,” Constructive Termination, or any similar term under any plan of or agreement with the Company.
8.    RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION. 
(a)    Exclusive Discretion.  The Plan Administrator will have the exclusive discretion and authority to administer, construe and interpret the Plan and to decide any and all questions arising in connection with the operation of the Plan. 

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(b)    Amendment or Termination.  The Plan Administrator reserves the right to amend or terminate the Plan, any Participation Notice issued pursuant to the Plan or the benefits provided hereunder at any time.  Unless terminated sooner by the Plan Administrator, the Plan shall automatically terminate immediately following the day before the third anniversary of the date the Plan is adopted by the Board.  No such amendment or termination will apply to any Participant who would be adversely affected by such amendment or termination unless such Participant consents in writing to such amendment or termination. Any action amending or terminating the Plan or any Participation Notice will be in writing and executed by a duly authorized officer of the Company and approved by the Plan Administrator. 
9.    NO IMPLIED EMPLOYMENT CONTRACT.  The Plan will not be deemed (i) to give any employee or other person any right to be retained in the employ of the Company, or (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without Cause, which right is hereby reserved.
10.    DEFINITIONS.  For purposes of the Plan, the following terms are defined as follows: 
(a)    “Change in Control” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events as further described and subject to the exceptions in Section 13(g) of the Company’s Amended & Restated 2012 Equity Incentive Plan as of the Effective Date: (i) any person or entity acquires securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities, (ii) a merger, consolidation or similar transaction involving (directly or indirectly) the Company, (iii) a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries or (iv) individuals who, on the Effective Date, are members of the Board cease for any reason to constitute at least a majority of the members of the Board.  
(b)    “Code” means the Internal Revenue Code of 1986, as amended.
(c)    “Common Stock” means the common stock of the Company. 
(d)    “Plan Administrator” means the Board of Directors of the Company (the “Board”) or any committee of the Board duly authorized to administer the Plan.  The Plan Administrator may, but is not required to be, the Compensation Committee of the Board. The Board may at any time administer the Plan, in whole or in part, notwithstanding that the Board has previously appointed a committee to act as the Plan Administrator. 
(e)    “Release” means a general waiver and release, to the maximum extent permitted by law, of the Company and any related persons and entities, from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to the signing of the Release, including, without limitation, waiver of Section 1542 of the California Civil Code.  The terms of the Release shall be set forth in an agreement in the form provided by the Plan Administrator.
(f)    “Separation from Service” means a “separation from service” within the meaning of Treasury Regulations Section 1.409A-1(h), without regard to any alternative definition thereunder.
11.    LEGAL CONSTRUCTION.  The Plan will be governed by and construed under the laws of the State of California (without regard to principles of conflict of laws), except to the extent preempted by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
12.    CLAIMS, INQUIRIES AND APPEALS. 
(a)    Applications for Benefits and Inquiries.  Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan Administrator in writing by an applicant (or the applicant’s authorized representative).  The Plan Administrator is set forth below. 
(b)    Denial of Claims.  In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant’s right to review the denial. Any electronic notice will comply with the regulations of the U.S. Department of Labor.  The notice of denial will be set forth in a manner designed to be understood by the applicant and will include the following:
(1)    the specific reason or reasons for the denial;

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(2)    references to the specific Plan provisions upon which the denial is based;
(3)    a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and
(4)    an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following a denial on review of the claim, as described in Section 13(d).
The notice of denial will be given to the applicant within 90 days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional 90 days for processing the application.  If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial 90-day period.
The notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application. 
(c)    Request for a Review.  Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within 60 days after the application is denied.  A request for a review will be in writing and will be addressed to:
Ruckus Wireless, Inc.
Attn: General Counsel
350 West Java Dr. 
Sunnyvale, CA 94089
A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent.  The applicant (or the applicant’s representative) will have the opportunity to submit (or the Plan Administrator may require the applicant to submit) written comments, documents, records, and other information relating to the applicant’s claim. The applicant (or the applicant’s representative) will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the applicant’s claim.  The review will take into account all comments, documents, records and other information submitted by the applicant (or the applicant’s representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
(d)    Decision on Review.  The Plan Administrator will act on each request for review within 60 days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional 60 days), for processing the request for a review.  If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial 60-day period.  This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the review.  The Plan Administrator will give prompt, written or electronic notice of its decision to the applicant.  Any electronic notice will comply with the regulations of the U.S. Department of Labor.  In the event that the Plan Administrator confirms the denial of the application for benefits, in whole or in part, the notice will set forth, in a manner designed to be understood by the applicant, the following:
(1)    the specific reason or reasons for the denial;
(2)    references to the specific Plan provisions upon which the denial is based;
(3)    a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim; and
(4)    a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA. 
(e)    Rules and Procedures.  The Plan Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims.  The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.

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(f)    Exhaustion of Remedies.  No legal action for benefits under the Plan may be brought until the applicant (i) has submitted a written application for benefits in accordance with the procedures described above, (ii) has been notified by the Plan Administrator that the application is denied, (iii) has filed a written request for a review of the application in accordance with the appeal procedure described above, and (iv) has been notified that the Plan Administrator has denied the appeal. Notwithstanding the foregoing, if the Plan Administrator does not respond to an applicant’s claim or appeal within the relevant time limits, the applicant may bring legal action for benefits under the Plan pursuant to Section 502(a) of ERISA. 
13.    BASIS OF PAYMENTS TO AND FROM PLAN.  All benefits under the Plan will be paid by the Company.  The Plan will be unfunded, and benefits hereunder will be paid only from the general assets of the Company.
14.    OTHER PLAN INFORMATION.
(a)    Employer and Plan Identification Numbers.  The Employer Identification Number assigned to the Company (which is the “Plan Sponsor” as that term is used in ERISA) by the Internal Revenue Service is 54-2072041. The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the instructions of the Internal Revenue Service is 525.
(b)    Ending Date for Plan’s Fiscal Year.  The date of the end of the fiscal year for the purpose of maintaining the Plan’s records is December 31.
(c)    Agent for the Service of Legal Process. The agent for the service of legal process with respect to the Plan is:
Ruckus Wireless, Inc.
Attn: General Counsel
350 West Java Dr. 
Sunnyvale, CA 94089
(d)    Plan Sponsor and Administrator. The “Plan Sponsor” and the “Plan Administrator” of the Plan is the Company.  All notices and requests should be directed to:
Ruckus Wireless, Inc.
Attn: General Counsel
350 West Java Dr. 
Sunnyvale, CA 94089
The telephone number for the Plan Sponsor and Plan Administrator is (650) 265-4200.  The Plan Administrator is the named fiduciary charged with the responsibility for administering the Plan.
15.    STATEMENT OF ERISA RIGHTS.
Participants in the Plan (which is a welfare benefit plan sponsored by the Company) are entitled to certain rights and protections under ERISA.  Participants in the Plan are considered participants in the Plan for the purposes of this paragraph and, under ERISA, such Participants are entitled to:

Receive Information About Your Plan and Benefits
(a)    Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series), if applicable, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration;
(b)    Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan and copies of the latest annual report (Form 5500 Series), if applicable, and an updated (as necessary) Summary Plan Description.  The Plan Administrator may make a reasonable charge for the copies; and
(c)    Receive a summary of the Plan’s annual financial report, if applicable.  The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.

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Prudent Actions By Plan Fiduciaries
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan.  The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of Participants and other Plan Participants and beneficiaries.  No one, including the Participant’s employer, union or any other person, may fire a Participant or otherwise discriminate against a Participant in any way to prevent a Participant from obtaining a Plan benefit or exercising a Participant’s rights under ERISA.
Enforcement of Participant Rights
If a Participant’s claim for a Plan benefit is denied or ignored, in whole or in part, the Participant has a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.
Under ERISA, there are steps a Participant can take to enforce the above rights.  For instance, if the Participant requests a copy of Plan documents or the latest annual report from the Plan, if applicable, and does not receive them within 30 days, the Participant may file suit in a federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay the Participant up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.
If a Participant has a claim for benefits that is denied or ignored, in whole or in part, the Participant may file suit in a state or federal court.
If a Participant is discriminated against for asserting the Participant’s rights, the Participant may seek assistance from the U.S. Department of Labor, or the Participant may file suit in a federal court.  The court will decide who should pay court costs and legal fees.  If the Participant is successful, the court may order the person the Participant has sued to pay these costs and fees.  If the Participant loses, the court may order the Participant to pay these costs and fees, for example, if it finds the Participant’s claim is frivolous.
Assistance With Participant Questions
If a Participant has any questions about the Plan, the Participant should contact the Plan Administrator.  If the Participant have any questions about this statement or about the Participant’s rights under ERISA, or if the Participant needs assistance in obtaining documents from the Plan Administrator, the Participant should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the Participant’s telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  A Participant may also obtain certain publications about the Participant’s rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
16.    GENERAL PROVISIONS.
(a)    Notices.  Any notice, demand or request required or permitted to be given by either the Company or a Participant pursuant to the terms of the Plan will be in writing and will be deemed given when delivered personally, when received electronically (including email addressed to the Participant’s Company email account and to the Company email account of the Company’s General Counsel), or deposited in the U.S. Mail, First Class with postage prepaid, and addressed to the parties, in the case of the Company, at the address set forth in above, in the case of a Participant, at the address as set forth in the Company’s employment file maintained for the Participant as previously furnished by the Participant or such other address as a party may request by notifying the other in writing.
(b)    Transfer and Assignment.  The rights and obligations of a Participant under the Plan may not be transferred or assigned without the prior written consent of the Company.  The Plan will be binding upon any surviving entity resulting from a Change in Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard to whether or not such person or entity actively assumes the obligations hereunder.
(c)    Waiver.  Any party’s failure to enforce any provision or provisions of the Plan will not in any way be construed as a waiver of any such provision or provisions, nor prevent any party from thereafter enforcing each and every other provision of the Plan.  The rights granted to the parties herein are cumulative and will not constitute a waiver of any party’s right to assert all other legal remedies available to it under the circumstances. 
(d)    Severability.  Should any provision of the Plan be declared or determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.

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(e)    Section Headings.  Section headings in the Plan are included only for convenience of reference and will not be considered part of the Plan for any other purpose.

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RUCKUS WIRELESS, INC.
SEVERANCE BENEFIT PLAN
PARTICIPATION NOTICE
To: _______________________
Date: _____________________
You have been designated as eligible to be a Participant in the Ruckus Wireless, Inc. Severance Benefit Plan.  A copy of the Plan document is attached to this Participation Notice.  The terms and conditions of your participation in the Plan are as set forth in the Plan document and this Participation Notice, which together constitute the Summary Plan Description for the Plan.  
The table below designates the benefits you are eligible to receive pursuant to the Plan.
	
				
	 
	Lump Sum Cash Severance Payment
	Maximum Duration of COBRA Payment Period
	Percentage of Outstanding Equity Awards That Will Accelerate

	Qualifying Termination that is NOT a Change in Control Termination
	[_] months  
of your  
Monthly Base Salary 
	[_] months
	N/A

	Qualifying Termination that is a Change in Control Termination
	[_] months of your  
Monthly Base Salary and [_] months of your    Annual Target Bonus
	[_] months
	[_]%

In addition to other terms defined in the Plan document, the definitions on the following page are used to define the benefits to which you are entitled under the Plan.
Note that any stock options granted to you by the Company as “incentive stock options” prior to the date hereof may cease to qualify as “incentive stock options” as a result of the vesting acceleration benefit provided in the Plan.  By accepting participation in the Plan, you represent that you have either consulted your personal tax or financial planning advisor about the tax consequences of your participation in the Plan, or you have knowingly declined to do so.
Please return to the Company a copy of this Participation Notice signed by you and retain a copy of this Participation Notice, along with the Plan document, for your records. 
	
	
	 

	Signature

	 

	 

	Print Name

	 

	Date

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 “Monthly Base Salary” means the Participant’s monthly base salary in effect immediately prior to date of the Qualifying Termination, ignoring any reduction that forms the basis for Constructive Termination.
“Annual Target Bonus” means the Participant’s annual target bonus in effect for the year in which the Qualifying Termination occurs.  
“Qualifying Termination” means a Change in Control Termination or any other Involuntary Termination Without Cause.
“Change in Control Termination” means (i) an Involuntary Termination Without Cause, or (ii) a Constructive Termination, in either case that occurs within the period starting three months prior to a Change in Control and ending on the first anniversary of the Change in Control.   
 “Involuntary Termination Without Cause” means a Participant’s involuntary termination of employment by the Company, resulting in a Separation from Service, for a reason other than death, disability, or Cause.
“Cause” means any of the following events: (i) Participant’s willful failure substantially to perform his or her duties and responsibilities to the Company; (ii) willful breach of any obligation under any written agreement with the Company that is not cured within 30 days of written notice to the Participant; (iii) Participant’s deliberate violation of a Company policy, or commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct, that has caused or is reasonably expected to result in material injury to the Company; or (iv) material  unauthorized use,  disclosure or misappropriation by Participant of any proprietary information, trade secret or other asset of the Company or entrusted to the Company by a third party.  
“Constructive Termination” means the Participant resigns (resulting in a Separation from Service) because one of the following events or actions is undertaken without the Participant’s written consent: 
(i) a material diminution in the Participant’s authority, duties, or responsibilities; 
(ii) a reduction of five percent or more in the Participant’s annual base salary (unless pursuant to a salary reduction program applicable to all similarly situated employees); 
(iii) a non-temporary relocation of the Participant’s business office to a location that increases the Participant’s one-way commute by more than 50 miles from the primary location at which the Participant performed duties upon hire; or 
(iv) a material breach by the Company or any successor entity of the Plan or any employment agreement between the Company and the Participant.
An event or action will not give the Participant grounds for Constructive Termination unless (A) the Participant gives the Company written notice within 30 days after the initial existence of the event or action that the Participant intends to resign in a Constructive Termination due to such event or action; (B) the event or action is not reasonably cured by the Company within 30 days after the Company receives written notice from the Participant; and (C) the Participant’s Separation from Service occurs within 90 days after the end of the cure period. 

 10EX-10.1

Exhibit 10.1

STOCKHOLDERS AGREEMENT

STOCKHOLDERS AGREEMENT, dated as of February 28, 2013, among GROUP 1 AUTOMOTIVE, INC., a
Delaware corporation (the “Company”), and LINCOLN DA CUNHA PEREIRA FILHO
(“Pereira”), MAURICIO VAZ RODRIGUES, JOÃO ALBERTO GROSS FIGUEIRÓ (each of the foregoing a
“UAB Motors Management Stockholder” and, collectively, the “UAB Motors Management
Stockholders”), ANDRÉ RIBEIRO DA CUNHA PEREIRA and RSPJR ENTERPRISES, INC. (the foregoing,
together with UAB Motors Management Stockholders, the “Stockholders”).

RECITALS

A. As a result of transactions pursuant to the Share Purchase Agreement, the Stockholders are
the beneficial owners of the number of shares of Common Stock set forth opposite their respective
names on Schedule A hereto.

B. The Company and the Stockholders believe it to be in their mutual best interests to ensure
certain rights and obligations in respect of the Stockholders’ ownership and disposition of Common
Stock and other related matters in respect of the Company, as set forth herein.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

I. DEFINITIONS

1.1. Definitions. (a) In addition to the terms defined elsewhere herein, the
following terms have the following meanings when used with initial capital letters:

“Adverse Disclosure” means public disclosure of material non-public information, which
disclosure in the good faith judgment of the Board of Directors of the Company after consultation
with counsel to the Company (i) would be required to be made in any Registration Statement so that
such Registration Statement would not be materially misleading, (ii) would not be required to be
made at such time but for the filing of such Registration Statement and (iii) would have a material
adverse effect on the Company or its business or on the Company’s ability to effect a material
acquisition, disposition or financing.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with, such Person. For the purposes of this
definition, “control” when used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement” means this agreement, as the same may be amended from time to time.

“Board” means the Board of Directors of the Company.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks
in the City of New York are authorized by law to close.

“Common Stock” means the Common Stock, par value $0.01 per share, of the Company.

“Commission” means the Securities and Exchange Commission.

“Demand Registration” has the meaning set forth in Section 3.1.

“Director” means a member of the Board.

“Escrow Agreement” has the meaning set forth in the Share Purchase Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Maximum Offering Size” means the maximum number of shares of Common Stock that can be sold in
an underwritten Public Offering without being likely to have a material adverse effect on the
price, timing or distribution of the Common Stock being offered.

“Minimum Registrable Securities” has the meaning set forth in Section 3.1.

“Officer Agreement” has the meaning set forth in the Share Purchase Agreement.

“Permitted Transferee” means, with respect to any Stockholder, (i) any spouse or lineal
descendant of such Stockholder, (ii) any trust of which not less than 75% of the beneficial
interests are held by such Stockholder or his spouse or lineal descendants, (iii) any partnership,
corporation or other entity of which not less than 75% of the equity interests (on a fully diluted
basis) are owned directly or indirectly by one or more Stockholders or their respective spouses or
lineal descendants, and (iv) any other Stockholder; provided that each such transferee
(other than another Stockholder) will be a Permitted Transferee for purposes of this Agreement only
if such transferee shall have executed and delivered to the Company an instrument satisfactory to
the Company pursuant to which the transferee shall have agreed to be bound by all of the terms of
this Agreement applicable to its transferor.

“Person” means an individual, corporation, partnership, trust, association or any other entity
or organization, including a government or political subdivision or an agency or instrumentality
thereof.

“Piggy-Back Notice” has the meaning set forth in Section 3.2(a).

“Piggy-Back Registration” has the meaning set forth in Section 3.2(a).

“Piggy-Back Request” has the meaning set forth in Section 3.2(a).

“Public Offering” means any primary or secondary public offering of equity securities of the
Company pursuant to an effective registration statement under the Securities Act, other than
pursuant to a registration statement on Form S-4 or Form S-8 or any successor or similar form.

“Registering Stockholder” has the meaning set forth in Section 4.1.

“Registrable Securities” means shares of Common Stock; provided that such securities
will cease to be Registrable Securities when a registration statement relating to such securities
shall have been declared effective by the Commission and such securities shall have been disposed
of pursuant to such effective registration statement or when such securities may be sold without
registration pursuant to Rule 144.

“Registration Expenses” means all (i) registration and filing fees with the Commission, (ii)
fees and expenses of compliance with state securities or blue sky laws (including reasonable fees
and disbursements of counsel in connection therewith and the reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing
expenses, (iv) internal expenses of the Company (including, without limitation, all salaries and
expenses of officers and employees performing legal or accounting duties), (v) fees and expenses of
counsel and independent public accountants for the Company, (vi) fees and expenses of any
additional experts retained by the Company in connection with such registration, (vii) fees and
expenses of listing the Registrable Securities, if any, (viii) rating agency fees, (ix) transfer
taxes, and (x) reasonable fees and expenses of one counsel for the selling Stockholders.
Underwriting fees, discounts and commissions will be paid by the Registering Stockholder in
accordance with Section 4.3.

“Requesting Stockholders” has the meaning set forth in Section 3.1.

“Restricted Period” has the meaning set forth in Section 2.1.

“Rule 144” means Rule 144 under the Securities Act, as such rule may be amended from time to
time.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Share Purchase Agreement” means the Share Purchase Agreement, dated as of January 24, 2013 by
and among the Company, the shareholders of UAB Motors Participações S.A. named therein and UAB
Motors Participações S.A. as intervening and consenting party.

“Stockholder Director Nominee” has the meaning set forth in Section 5.1.

“Stockholder Representative” has the meaning set forth in Section 1.2.

“Transfer” has the meaning set forth in Section 2.1.

“Transferee” means any Person to whom any Stockholder Transfers any shares of Common Stock
except (i) in a sale pursuant to an effective registration statement, (ii) in a tender or exchange
offer described in clause (b) of Section 2.1, or (iii) in a sale without registration pursuant to
Rule 144.

“Underwriter” means a securities dealer who purchases any Registrable Securities as a
principal in connection with a distribution of such Registrable Securities in a Public Offering and
not as part of such dealer’s market-making activities.

1.2. Stockholder Representative. Except as otherwise provided herein, any right or
action that may be taken at the election of the Stockholders will be taken by a representative of
the Stockholders (the “Stockholder Representative”) on behalf thereof. The initial
Stockholder Representative will be Pereira. The Stockholders shall be entitled, in their sole
discretion, to remove the Stockholder Representative and designate a successor Stockholder
Representative by written notice to the Company delivered in accordance with Section 6.3 hereof;
provided that in the event that, upon death or disability of the Stockholder Representative or for
any other reason, no Person is acting as the Stockholder Representative as of the time any action
is otherwise to be taken hereunder by the Stockholder Representative or the Stockholders, such
action may be taken on behalf of the entire Stockholders by written action or consent of the
holders of a majority of shares of Common Stock then held by the members of the Stockholders. Any
change in the Stockholder Representative will become effective upon notice in accordance with
Section 6.3. Each Stockholder will severally, but not jointly, indemnify and hold the Company
harmless from any claim of any such Stockholder arising out of any act taken by the Stockholder
Representative with respect to such Stockholder pursuant to and in accordance with this Section
1.2.

II. RIGHTS AND OBLIGATIONS WITH

RESPECT TO TRANSFER

2.1. Transfers. Notwithstanding any other provision hereof, until (i) the sixth month
anniversary of the date hereof for a Stockholder other than a UAB Motors Management Stockholder and
(ii) in respect of any applicable UAB Motors Management Stockholder, the earlier of (A) the third
anniversary of the date hereof and (B) the date on which the Company terminates without cause the
applicable Officer Agreement between the Company and such UAB Motors Management Stockholder, other
than Pereira (the “Restricted Period”), no Stockholder may offer, sell, assign, grant a
participation in, pledge or otherwise transfer (“Transfer”) any of its Common Stock without
the prior written consent of the Company, except that (a) a Stockholder may transfer shares of
Common Stock to any Permitted Transferee, (b) a Stockholder may transfer shares of Common Stock in
connection with any tender offer or exchange offer made by any Person for any and all shares of
Common Stock approved by the Board, (c) a UAB Motors Management Stockholder may transfer or dispose
of 1/3 of the shares of Common Stock owned by him as the date hereof on or after the first
anniversary of the date hereof and (d) a UAB Motors Management Stockholder may transfer or dispose
of an additional 1/3 of the shares of Common Stock owned by him as the date hereof on or after the
second anniversary of the date hereof.

2.2. Restrictive Legend. (a) For so long as the transfer restrictions set forth in
Section 2.1 remain in effect, each certificate representing Common Stock owned by any UAB Motors
Stockholder will (unless otherwise permitted by the provisions of Section 2.2(b)) include the
following legend:

THE OFFER OR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE
THEREWITH. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS AGREEMENT TO WHICH THE COMPANY IS A
PARTY, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.

(b) In the event either of the restrictive legends above has ceased to be applicable, the
Company shall provide any Stockholder, at its request, without any expense to such Stockholder
(other than applicable transfer taxes and similar governmental charges, if any), with new
certificates for such securities not bearing the legend with respect to which the restriction has
ceased (it being understood that (i) the restriction referred to in the first paragraph of the
legend above shall cease with respect to securities when such restriction is no longer required in
order to assure compliance with the Securities Act, including at the time of a sale of such
securities pursuant to Rule 144 under the Securities Act and at the time when such securities shall
have been effectively registered under the Securities Act and (ii) the restriction referred to in
the second paragraph of the legend above shall cease with respect to securities held by any
Stockholder upon the earlier of the end of the Restricted Period with respect to such Stockholder
in accordance with Section 2.1 and the termination of this Agreement).

2.3. Improper Transfer. Any attempt to Transfer any Common Stock not in compliance
with this Agreement will be null and void and neither the Company nor any transfer agent of the
Company will register, or otherwise recognize in the Company’s records, any such improper Transfer.

2.4. Transferees. Any and all provisions of this Agreement which apply to the
Stockholders will apply with equal force to any Transferee.

	 	 	 	 	 	 	 
	III.	 	REGISTRATION RIGHTS
	 	 	 	3.1	 	 	Demand Registration.

	 	 	 	 	 	 	 

(a) At any time that a Stockholder Director Nominee serves as a member of the Board, one or
more Stockholders (the “Requesting Stockholders”), acting through the Stockholder
Representative, may make a written request to the Company for registration of (A) all of the
Registrable Securities held by such requesting Stockholders or (B) any part of the Registrable
Securities held by such requesting Stockholders, provided in each case that the then
current market value of the Registrable Securities to be registered is at least $50.0 million in
the aggregate (the “Minimum Registrable Securities”). Any such requested registration
shall hereinafter be referred to as a “Demand Registration.” Each request for a Demand
Registration shall specify the aggregate amount of Registrable Securities to be registered and the
intended methods of disposition thereof.

(b) In no event shall the Company be required to effect more than one Demand Registration.

(c) A Requesting Stockholder may withdraw its Registrable Securities from a Demand
Registration at any time. If as a result of such withdrawal the number of Registrable Securities
subject to such Demand Registration is less than the Minimum Registrable Securities, the Company
shall cease all efforts to secure registration and such registration nonetheless shall be deemed a
Demand Registration for purposes of Section 3.1(b); provided, however, if such
withdrawal is based on the reasonable determination of the Requesting Stockholders that since the
date of such request there has been a material adverse change in the business or prospects of the
Company or in general market conditions, it shall not be deemed a Demand Registration for purposes
of Section 3.1(b).

(d) No Demand Registration shall be deemed to have been effected if an underwritten Public
Offering is contemplated by such Demand Registration and the conditions to closing specified in the
underwriting agreement are not satisfied due to any act or omission by the Company.

(e) If the filing, initial effectiveness or continued use of a registration statement in
respect of a Demand Registration at any time would require the Company to make an Adverse
Disclosure, the Company may, upon giving prompt written notice of such action to the Stockholder
Representative, delay the filing or initial effectiveness of, or suspend use of, the such
registration statement for a shortest possible period of time determined in good faith by the
Company to be necessary for such purpose. In the event the Company exercises its rights under the
preceding sentence, the Requesting Stockholders agree to suspend, immediately upon their receipt of
the notice referred to above, their use of the prospectus relating to the Demand Registration in
connection with any sale or offer to sell Registrable Securities. The Company shall immediately
notify the Requesting Stockholders of the expiration of any period during which it exercised its
rights under this Section 3.1(e).

(f) The Company shall have the right to select the managing underwriter or underwriters for
the offering.

(g) If the managing underwriter or underwriters of a proposed underwritten Public Offering of
a class of Registrable Securities included in a Demand Registration, inform the Requesting
Stockholders in writing that, in its or their opinion, the number of Registrable Securities
requested to be included in such Demand Registration exceeds the Maximum Offering Size, the number
of Registrable Securities that can be included without having such an adverse effect shall be
allocated pro rata among the Stockholders that have requested participation in the
Demand Registration.

3.2 Piggy-Back Registration. (a) If, at any time that a Stockholder Director Nominee
serves as a member of the Board, the Company proposes to file a registration statement under the
Securities Act with respect to an offering of any of its Common Stock (i) for its own account
(other than a registration on Form S-8 or Form S-4 (or any substitute form that may be adopted by
the Commission)) or (ii) for the account of any holders of Registrable Securities other than the
Stockholders, then the Company shall give written notice of such proposed filing to the Stockholder
Representative as soon as practicable (but in any event not less than ten (10) Business Days before
the anticipated filing date) (the “Piggy-Back Notice”), and the Piggy-Back Notice will
offer the Stockholders the opportunity, subject to the limitations provided in Section 3.2(b) and
the restrictions on Transfer provided in Section 2.1, to register such number of shares of
Registrable Securities as the Stockholder Representative may request on behalf of the Stockholders
on the same terms and conditions as the registration of the Company’s or other holders’ Registrable
Securities (a “Piggy-Back Registration”). The Stockholder Representative on behalf of each
Stockholder shall have five (5) Business Days after the date on which the Stockholder
Representative received the Piggy-Back Notice to make a written request to the Company for common
stock held by any such Stockholder to be included in such registration statement (a “Piggy-Back
Request”). The Company will use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so requested to register by
such Stockholders to the extent required to permit the disposition of the Registrable Securities so
to be registered; provided that (A) if such registration involves an underwritten Public
Offering, all such Stockholders requesting to be included in the Company’s registration must sell
their Registrable Securities to any Underwriters at the same price and subject to the same
underwriting fees, discounts or commissions as apply to the Company or any other holder of
Registrable Securities and (B) if, at any time after giving written notice of its intention to
register any Registrable Securities pursuant to this Section 3.2(a), the Company shall determine
for any reason to not file a registration statement, the Company shall give written notice to the
Stockholder Representative and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration statement.

(b) If a registration pursuant to this Section 3.2 involves an underwritten Public Offering
and the managing Underwriter advises the Company in writing that the number of shares of Common
Stock that the Company and any holders, including the Stockholders, intend to include in such
registration exceeds the Maximum Offering Size, the Company will include in such registration, in
the following priority, up to the Maximum Offering Size:

(i) first, so much of the Registrable Securities proposed to be registered by the
Company as would not cause the offering to exceed the Maximum Offering Size; and

(ii) second, all Registrable Securities requested to be included in such registration
by all holders, including Stockholders, pursuant to this Section 3.2 (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro rata among all such
holders on the basis of the relative number of shares of Registrable Securities so requested
to be included in such registration).

3.3 Holdback Agreements. If any registration of Registrable Securities shall be in
connection with an underwritten Public Offering, the Stockholders agree not to effect any sale or
distribution, including, without limitation, any sale pursuant to Rule 144 or any successor
provision under the Securities Act, of any shares of Common Stock, and not to effect any sale or
distribution of any stock convertible into or exchangeable or exercisable for any Common Stock of
the Company (in each case, other than as part of such Public Offering) during the 14 days prior to
the effective date of such registration statement or during the period after such effective date
equal to the lesser of (i) such period of time as agreed between such managing Underwriter and the
Company and (ii) 180 days; provided that such period of time shall not exceed any similar
limitation period that applies to a Director or officer of the Company.

IV. REGISTRATION PROCEDURES

4.1. Filings; Information. Subject to the limitations set forth in Article III,
whenever a Stockholder (the “Registering Stockholder”) requests that any Registrable
Securities be included in a registration statement pursuant to Section 3.1 or Section 3.2, the
Company shall use its reasonable best efforts to include such Registrable Securities in such
registration statement, and in connection with any such request:

(a) The Company shall use its reasonable best efforts and shall take all appropriate actions
to cause such registration statement to be filed and become effective as soon as practicable.
Registrations under Section 3.1 shall be on such appropriate registration form of the SEC as shall
be selected by the Company.

(b) After such registration statement becomes effective, the Company shall use its reasonable
best efforts and shall take all appropriate actions to maintain the effectiveness of such
registration statement for the shorter of a period of 180 days after the effective date of such
registration statement and such period as the Registering Stockholder may require to complete its
contemplated sales in compliance with the securities laws of the jurisdiction in which the offering
is contemplated; provided, however, that the Company shall have no obligation to
maintain the effectiveness of such registration statement following the closing date of an
underwritten Public Offering.

(c) The Company shall, if requested, prior to filing such registration statement or any
amendment or supplement thereto, furnish to the Registering Stockholder, if any, copies thereof,
and thereafter furnish to the Registering Stockholder such number of copies of such registration
statement, amendment and supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and the prospectus included in such registration
statement (including each preliminary prospectus) as the Registering Stockholder or each such
Underwriter may reasonably request in order to facilitate the sale of the Registrable Securities.

(d) After the filing of the registration statement, the Company shall promptly notify the
Registering Stockholder of any stop order issued or, to the Company’s knowledge, threatened to be
issued by the Commission and take all reasonable actions required to prevent the entry of such stop
order or to remove it if entered.

(e) The Company shall enter into customary agreements (including an underwriting agreement in
customary form) and take such other actions as are reasonably required in order to expedite or
facilitate the sale of such Registrable Securities, including, without limitation, obtaining a
comfort letter from the Company’s independent public accountants in customary form and covering
such matters of the type customarily covered by comfort letters as the Underwriters may reasonably
request.

(f) The Company shall participate, at the request of the Registering Stockholder, in
presentations to prospective Underwriters and investors in general regarding the Public Offering.

(g) The Company shall use its reasonable best efforts to cause all such Registrable Securities
to be listed on each securities exchange on which similar securities issued by the Company are then
listed or, if not so listed, on a national securities exchange

4.2. Obligations of Stockholders. (a) Any Piggy-Back Request shall (i) specify the
Registrable Securities intended to be offered and sold by the Stockholder making the request,
(ii) express such Stockholder’s present intent to offer such Registrable Securities for
distribution, and (iii) contain the undertaking of such Stockholder to provide all such information
and materials and take all action as may reasonably be required in order to permit the Company to
comply with all applicable requirements in connection with the registration of such Registrable
Securities.

(b) No Stockholder shall have any right to obtain or seek an injunction restraining or
otherwise delaying any registration as the result of any controversy that might arise with respect
to the interpretation or implementation of this Agreement.

4.3. Registration Expenses. Registration Expenses incurred in connection with any
registration made pursuant to Article III will be borne by the Company to the extent permitted by
applicable law; provided, that each Stockholder will pay, on a pro rata basis, any
underwriting fees, discounts or commissions attributable to the sale of such Stockholder’s Common
Stock.

4.4. Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Stockholder registering shares pursuant to Section 3.1 or Section 3.2, its officers,
members and directors, and each Person, if any, who controls each such Stockholder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any
and all losses, claims, damages, liabilities and expenses caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or prospectus relating
to the Registrable Securities (as amended or supplemented if the Company will have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon intentionally untrue or intentionally misleading information
furnished in writing to the Company by or on behalf of such Stockholder expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus will not inure to the benefit of any Stockholder if a copy of the current
prospectus was not provided to the applicable purchaser by such Stockholder and such current copy
of the prospectus would have cured the defect giving rise to such loss, claim, damage or liability.

4.5. Indemnification by Stockholders. Each Stockholder registering shares pursuant to
Section 3.1 or Section 3.2 agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers and Directors and each Person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to such Stockholder, but only with reference to
intentionally untrue or misleading intentionally information related to such Stockholder furnished
in writing by or on behalf of such Stockholder expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or supplement thereto or any
preliminary prospectus. Each such Stockholder also agrees to indemnify and hold harmless any
Underwriters of the Registrable Securities, their officers and directors and each Person who
controls such Underwriters on substantially the same basis as that of the indemnification of the
Company provided in this Section 4.4.

4.6. Conduct of Indemnification Proceedings. In case any proceeding (including any
governmental investigation) is instituted involving any Person in respect of which indemnity may be
sought pursuant to Section 4.4 or Section 4.5, such Person will promptly notify the Person against
whom such indemnity may be sought in writing and the indemnifying party upon request of the
indemnified party will retain counsel reasonably satisfactory to the indemnified party to represent
the indemnified party and any others the indemnifying party may designate in such proceeding and
will pay the fees and disbursements of such counsel related to the proceeding. In any such
proceeding, any indemnified party will have the right to retain its own counsel, but the fees and
expenses of such counsel will be at the expense of such indemnified party unless (a) the
indemnifying party and the indemnified party have mutually agreed to the retention of such counsel
or (b) the named parties to any such proceeding (including any impleaded parties) include both the
indemnified party and the indemnifying party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between them, in which case
the fees and expenses of such counsel will be paid by the Company. It is understood that the
indemnifying party will not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all such indemnified parties, and that
all such fees and expenses will be reimbursed as they are incurred. In the case of the retention
of any such separate firm for the indemnified parties, such firm will be designated in writing by
the indemnified parties. The indemnifying party will not be liable for any settlement of any
proceeding effected without its consent, but if settled with such consent, or if there be a final
judgment for the plaintiff, the indemnifying party will indemnify and hold harmless such
indemnified parties from and against any loss or liability (to the extent stated above) by reason
of such settlement or judgment.

4.7. Contribution. (a) If the indemnification provided for herein is for any reason
unavailable to the indemnified parties in respect of any losses, claims, damages or liabilities
referred to herein, then each such indemnifying party, in lieu of indemnifying such indemnified
party, will contribute to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative
fault of the Company, the Stockholders and any Underwriter in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company, Stockholders registering
shares pursuant to Section 3.1 or Section 3.2 and the Underwriter will be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by such party
with intent or knowledge of the falsity thereof.

(b) The Company and each Stockholder registering shares of Common Stock pursuant to Section
3.1 or Section 3.2 agree that it would not be just and equitable if contribution pursuant to this
Section 4.7 were determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding subsection. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or liabilities referred
to in the immediately preceding subsection will be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the provisions
of this Section 4.7, no Underwriter will be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission, and no Stockholder registering shares pursuant to Section 3.1 or
Section 3.2 will be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Stockholder were offered to the public (less
underwriters) discounts and commissions) exceeds the amount of any damages which such Stockholder
has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

4.8. Participation in Underwritten Registrations. No Person may participate in any
underwritten registration hereunder unless such Person (a) agrees to sell such Person’s shares of
Common Stock on the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements and these registration rights.

4.9. Rule 144. Subject to the restrictions on transfer set forth in this Agreement,
the Company will file any reports required to be filed by it under the Securities Act and the
Exchange Act and will take such further action as the Stockholders may reasonably request to the
extent required from time to time to enable the Stockholders to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions provided by Rule 144
under the Exchange Act, as such Rule may be amended from time to time, or other appropriate rule or
regulation adopted by the Commission.

V. CERTAIN ARRANGEMENTS

5.1. Stockholder Director Nominee. Effective as of the date hereof, the Board shall
amend the bylaws of the Company to increase the size of the Board by one (1) member and shall fill
the vacancy by appointing Pereira to the Board. So long as the Stockholders in the aggregate hold
at least 700,000 shares of Common Stock, including, for the avoidance of doubt, any shares of
Common Stock (i) that remain in escrow pursuant to the Escrow Agreement and (ii) acquired in the
open market, (a) the Company, through the Board, shall nominate one (1) person designated by the
Stockholder Representative to serve as a Class 1 Director (the “Stockholder Director
Nominee”); provided that the initial Stockholder Director Nominee shall be Pereira and
that any subsequent or replacement Stockholder Director Nominee shall be subject to approval by the
Company, such approval not to be unreasonably withheld, (b) the Company shall use commercially
reasonable efforts to cause such Stockholder Director Nominee to be elected to the Board, including
without limitation, by soliciting proxies for any annual or special meeting of stockholders of the
Company at which Directors would be elected in favor the Stockholder Director Nominee’s election,
consistent with the efforts used to solicit proxies for the election of any other Board nominees,
and (c) each Stockholder shall attend any annual or special meetings of the stockholders of the
Company, in person or by proxy, and vote or direct a vote of all shares of its Common Stock
consistent with the recommendation of the Board as set forth in any proxy statement of the Company.

5.2. Indemnification and Insurance for Stockholder Director. (a) The Company shall
indemnify and hold harmless any Stockholder Director Nominee elected to serve on the Board in
accordance with Section 5.1 hereof to the same extent the other members of the Board are
indemnified by the Company in connection with the performance of their duties as directors of the
Company pursuant to the Company’s Certificate of Incorporation or Bylaws, employment agreements,
indemnification agreements or under applicable Law. The Company shall provide officers’ and
directors’ liability insurance covering any Stockholder Director Nominee elected to serve on the
Board in accordance with Section 5.1 hereof, the terms and coverage amounts of which shall be at
least as favorable as the terms and coverage amounts of the liability insurance provided to other
members of the Board.

VI. MISCELLANEOUS

6.1. Headings. The headings in this Agreement are for convenience of reference only
and will not control or affect the meaning or construction of any provisions hereof.

6.2. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement. This Agreement supersedes all prior
agreements and understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement. None of this Agreement is intended to confer upon any Person
other than the parties hereto and thereto any rights or remedies hereunder or thereunder.

6.3. Notices. Any notice, request, instruction or other document required or
permitted to be given hereunder by any party hereto to another party hereto will be in writing and
will be given to such party at its address set forth in Annex I attached hereto or, in the
case of a Transfer permitted hereunder, to the address of the permitted Transferee specified by it
upon notice given in accordance with the terms hereof, or to such other address as the party to
whom notice is to be given may provide in a written notice to the party giving such notice, a copy
of which written notice will be on file with the Secretary of the Company. Each such notice,
request or other communication will be effective (i) if given by certified mail, 72 hours after
such communication is deposited in the mails with certified postage prepaid addressed as aforesaid,
(ii) one Business Day after being furnished to a nationally recognized overnight courier for next
Business Day delivery, and (iii) on the date sent if sent by electronic facsimile transmission,
receipt confirmed.

6.4. Applicable Law. This Agreement will be governed by and construed in accordance
with the laws of the State of Delaware without regard to the conflict of laws rules of such state.

6.5. Severability. The invalidity or unenforceability of any provisions of this
Agreement in any jurisdiction will not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of
this Agreement, including any such provision, in any other jurisdiction, it being intended that all
rights and obligations of the parties hereunder will be enforceable to the fullest extent permitted
by law.

6.6. Termination. This Agreement may be terminated at any time by an instrument in
writing signed by the Company and Stockholders owning at least 66 2/3% of the
shares of Common Stock owned by the Stockholders.

6.7. Successors, Assigns and Transferees. The provisions of this Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective heirs, successors
and permitted assigns. Except as expressly contemplated hereby, neither this Agreement nor any
provision hereof will be construed so as to confer any right or benefit upon any Person other than
the parties to this Agreement and their respective successors and permitted assigns.

6.8. Amendments; Waivers. (a) No failure or delay on the part of any party in
exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided will be cumulative
and not exclusive of any rights or remedies provided by law.

(b) Neither this Agreement nor any term or provision hereof may be amended or waived except by
an instrument in writing signed, in the case of an amendment or waiver, by the Company and
Stockholders owning at least 66 2/3% of the shares of Common Stock owned by
the Stockholders.

6.9. Counterparts. This Agreement may be executed in any number of counterparts, each
of which will be an original with the same effect as if the signatures thereto and hereto were upon
the same instrument.

6.10. Remedies. The parties hereby acknowledge that money damages would not be
adequate compensation for the damages that a party would suffer by reason of a failure of any other
party to perform any of the obligations under this Agreement. Therefore, each party hereto agrees
that specific performance is the only appropriate remedy under this Agreement and hereby waives the
claim or defense that any other party has an adequate remedy at law.

6.11. Consent to Jurisdiction. Each of the Stockholders and the Company irrevocably
submits to the non-exclusive jurisdiction of any court located in the State of Delaware or the
United States Federal Court sitting in the State of Delaware over any suit, action or proceeding
arising out of or relating to this Agreement. Each of the Stockholders and the Company consents to
process being served in any such suit, action or proceeding by serving a copy thereof upon the
agent for service of process, provided that to the extent lawful and possible, written notice of
such service will also be mailed to such Stockholders or the Company, as the case may be. The
Stockholders hereby appoint

C T Corporation System

111 Eighth Avenue, New York, NY 10011

as their agent for service of process in Delaware for the purpose of this Section 6.11. Each of
the Stockholders and the Company agrees that such service will be deemed in every respect effective
service of process upon such Stockholders or the Company, as the case may be, in any such suit,
action or proceeding and will be taken and held to be valid personal service upon such Stockholder
or the Company, as the case may be. Nothing in this subsection will affect or limit any right to
serve process in any manner permitted by law, to bring proceedings in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any
other jurisdiction. Each of the Stockholders and the Company waives any right it may have to
assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 6.11.

6.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

6.13. Other Restrictions. The Stockholders acknowledge that there are additional
restrictions on the transfer of Common Stock held by the Stockholders pursuant to the Share
Purchase Agreement and related agreements.

1

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

GROUP 1 AUTOMOTIVE, INC.

By: /s/ John C. Rickel 

Name: John Rickel

Title: Senior Vice President &

Chief Financial Officer

/s/ Lincoln Da Cunha Pereira Filho

Lincoln Da Cunha Pereira Filho

/s/ Mauricio Vaz Rodrigues

Mauricio Vaz Rodrigues

/s/ João Alberto Gross Figueiró

João Alberto Gross Figueiró

/s/ André Ribeiro Da Cunha Pereira

André Ribeiro Da Cunha Pereira

/s/ Roger Searle Penske, Jr.

RSPJR Enterprises, Inc.

2

Annex I

Notices

To the Company:

Group 1 Automotive, Inc.

800 Gessner Road, Suite 500

Houston, TX 77024

Fax: (713) 647-5813

Attention: Earl Hesterberg

President and CEO

Group 1 Automotive, Inc.

800 Gessner Road, Suite 500

Houston, TX 77024

Fax: (713) 647-5869

Attention: Darryl Burman

VP, General Counsel

with a copy to (which shall not constitute notice):

Jones Day

717 Texas Street, Suite 3300

Houston, Texas 77002

Fax: (832) 239-3600

Attention: Darrell W. Taylor, Esq.

Jones Day

222 East 41st Street

New York, New York 10017

Fax: (212) 755-7306

Attention: S. Wade Angus, Esq.

Jones Day

Avenida Brigadeiro Faria Lima, 2277 — 5o andar

Jardim Paulistano, São Paulo, São Paulo (Brazil)

CEP 01452-000

Fax: +55-11-3018-3938

Attention: S. Wade Angus, Esq.

To the Stockholder Representative:

Lincoln da Cunha Pereira Filho

Rua do Rócio, 291 — 4o andar, conjunto 41

Vila Olímpia, São Paulo, São Paulo (Brazil)

CEP 04552-000

Fax: +55-11-3040-7979

with a copy to:

Cleary Gottlieb Steen & Hamilton LLP

Rua Funchal, 418 — 13o andar

Vila Olímpia, São Paulo, São Paulo (Brazil)

CEP 04551-060

Fax: +55-11-2196-7299

Attention: Juan G. Giraldez, Esq.

3

Schedule A

	 	•	 	Closing Date Common Stock

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Shareholder Name

	 	Amounts

	 	 	 	 	 

	 	 	 	 
	 	1.	 	 	André Ribeiro da Cunha Pereira

	 		251,204	
	 	 	 	 	 

	 	 	 	 
	 	2.	 	 	Lincoln da Cunha Pereira Filho

	 		230,357	
	 	 	 	 	 

	 	 	 	 
	 	3.	 	 	João Alberto Gross Figueiró

	 		230,357	
	 	 	 	 	 

	 	 	 	 
	 	4.	 	 	Maurício Vaz Rodrigues

	 		209,872	
	 	 	 	 	 

	 	 	 	 
	 	5.	 	 	RSPJR Enterprises, Inc.

	 		0	
	 	 	 	 	 

	 	 	 	 
	 	 	 	 	Total

	 		921,790	
	 	 	 	 	 

	 	 	 	 

	 	•	 	Closing Adjustment Escrow Common Stock

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Shareholder Name

	 	Amounts

	 	 	 	 	 

	 	 	 	 
	 	1.	 	 	André Ribeiro da Cunha Pereira

	 		19,059	
	 	 	 	 	 

	 	 	 	 
	 	2.	 	 	Lincoln da Cunha Pereira Filho

	 		17,477	
	 	 	 	 	 

	 	 	 	 
	 	3.	 	 	João Alberto Gross Figueiró

	 		17,477	
	 	 	 	 	 

	 	 	 	 
	 	4.	 	 	Maurício Vaz Rodrigues

	 		15,924	
	 	 	 	 	 

	 	 	 	 
	 	5.	 	 	RSPJR Enterprises, Inc.

	 		0	
	 	 	 	 	 

	 	 	 	 
	 	 	 	 	Total

	 		69,937	
	 	 	 	 	 

	 	 	 	 

	 	•	 	Escrow Common Stock Deposit

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Shareholder Name

	 	Amounts

	 	 	 	 	 

	 	 	 	 
	 	1.	 	 	André Ribeiro da Cunha Pereira

	 		124,113	
	 	 	 	 	 

	 	 	 	 
	 	2.	 	 	Lincoln da Cunha Pereira Filho

	 		113,812	
	 	 	 	 	 

	 	 	 	 
	 	3.	 	 	João Alberto Gross Figueiró

	 		113,812	
	 	 	 	 	 

	 	 	 	 
	 	4.	 	 	Maurício Vaz Rodrigues

	 		103,691	
	 	 	 	 	 

	 	 	 	 
	 	5.	 	 	RSPJR Enterprises, Inc.

	 		30,654	
	 	 	 	 	 

	 	 	 	 
	 	 	 	 	Total

	 		486,082	
	 	 	 	 	 

	 	 	 	 

4

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