Document:

Exhibit 10.1

 

Execution Version

 

 

 

 

 

May 21, 2015

 

 

Ring Energy, Inc.

200 N. Loraine Street, Suite 1245

Midland, TX 79701

 

		Attention:	William R. Broaddrick

Vice
President and Chief Financial Officer

 

		Re:	$500,000,000 Amended Senior Secured Revolving Credit
Facility for Ring Energy, Inc., subject to an initial Borrowing Base of $100,000,000

 

Gentlemen:

 

Ring Energy, Inc.
(the “Company”) has advised SunTrust Bank and SunTrust Robinson Humphrey, Inc. (the “Arranger”
and, together with SunTrust Bank, “SunTrust”) that the Company intends to acquire (the “Acquisition”)
the oil and gas properties in the Ford West Field and Ford Geraldine Unit in Culberson and Reeves Counties, Texas (the “Acquired
Assets”) of Finley Resources, Inc. the “Seller”) pursuant to a purchase and sale agreement between
the Company and the Seller (the “Acquisition Agreement”). You have further advised SunTrust that, in connection
with the Acquisition, the Company seeks to amend its existing senior credit facility (the “Existing Senior Credit
Facility”) by increasing the maximum facility amount from $100,000,000 to $500,000,000 and increasing the total borrowing
base to $100,000,000, adding additional lenders, extending the maturity date and making other amendments on the terms set forth
in the Summary of Principal Terms and Conditions attached hereto as Annex I (the “Term Sheet”). As used
in this letter, the “Amendment” means the proposed amendment described in this letter and the Term Sheet and
the “Amended Senior Credit Facility” means the Existing Senior Credit Facility as amended by such proposed Amendment.
All transactions described above, together with the financing contemplated hereby, are sometimes referred to herein as the “Transactions”.
Capitalized terms used in this letter but not defined herein shall have the meanings given to them in the Term Sheet.

 

SunTrust Bank is
pleased to commit to provide the full amount of the $100,000,000 initial increased Borrowing Base, subject to the terms and conditions
set forth in this letter and the Term Sheet (collectively, this “Commitment Letter”). You hereby appoint SunTrust
Robinson Humphrey, Inc. to act, and the Arranger agrees to act, as sole lead arranger and book manager for the Amended Senior Credit
Facility, subject to the terms and conditions of this Commitment Letter. No other agents, co-agents or arrangers will be appointed,
or other titles conferred, without the prior written consent of the Arranger.

 

    	 

    	 

    

Ring Energy, Inc.

Page
2

 

 

		A.	Syndication

 

The Lead Arranger reserves
the right, before or after the execution of the Financing Documentation, to syndicate all or a portion of SunTrust Bank’s
commitment to one or more other financial institutions that will become parties to the Financing Documentation (such financial
institutions, the “Lenders”) and the commitment of SunTrust Bank hereunder shall be reduced dollar-for dollar
as and when the corresponding commitments are received. The Company understands that the Lead Arranger intends to commence such
syndication efforts promptly. The Company agrees to actively assist the Lead Arranger in achieving a Successful Syndication (as
defined in the Fee Letter) and take such action as the Arranger may reasonably request related thereto. The Company’s assistance
shall include (but not be limited to) (i) making senior management, representatives and advisors of the Company and its affiliates
available to participate in meetings and to provide information to potential lenders under the Amended Senior Credit Facility at
such times and places as the Arranger may reasonably request; (ii) using the Company’s existing lending relationships to
assist in the syndication process; and (iii) assisting in the preparation of an information memorandum regarding the Company, the
Acquired Assets, the Amendment and the Amended Senior Credit Facility and other customary marketing materials to be used
in connection with the syndication, in form and substance reasonably acceptable to the Lead Arranger, at least 25 days prior to
the Closing Date; and (iv) preparing and providing promptly to the Lead Arranger all information with respect to the Company, its
subsidiaries, the Acquired Assets and the Transactions, including without limitation all financial information and projections
(the “Projections”), reasonably requested by the Lead Arranger in connection with the syndication of the Amendment.

 

The Arranger will manage
all aspects of the syndication of the Amended Senior Credit Facility in consultation with SunTrust Bank and the Company, including
the timing of all offers to potential Lenders, the determination of all amounts offered to potential Lenders, the selection of
Lenders, the allocation of commitments, and the determination of compensation and titles (such as co-agent, managing agent, etc.)
given, if any, to such Lenders. The Company agrees that no other agents, co-agents or arrangers will be appointed, or other titles
conferred, without the prior written consent of the Lead Arranger, and that no Lender will receive any compensation for its commitment
to, or participation in, the Amended Senior Credit Facility except as expressly set forth in the Term Sheet or the Fee Letter (as
defined below), or as otherwise agreed to and offered by the Arranger.

 

To ensure an orderly
and effective syndication of the Amended Senior Credit Facility, the Company further agrees that until the earlier of termination
of this Commitment Letter and a Successful Syndication (as defined in the Fee Letter), the Company will not, and will not cause
or permit any of its affiliates or agents to, arrange, sell, syndicate or issue, attempt to arrange, sell, syndicate or issue,
announce or authorize the announcement of the arrangement, sale, syndication or issuance of, or engage in discussions concerning
the arrangement, sale, syndication or issuance of, any credit facility or debt security (including any renewals thereof) except
with the prior written consent of the Arranger.

 

		B.	Conditions Precedent

 

The undertakings and
obligations of SunTrust under this Commitment Letter are subject to: (i) the preparation, execution and delivery of mutually acceptable
loan documentation, including an amendment to the Existing Credit Agreement incorporating substantially the terms and conditions
outlined in this Commitment Letter; (ii) the accuracy of all representations that the Company makes to SunTrust (including those
in Section D below) and all information that the Company furnishes to SunTrust, and the absence of any information or other
matter being disclosed after the date hereof that is inconsistent in a material and adverse manner with any information or other
material disclosed to SunTrust; (iii) the completion, and the Company’s reasonable cooperation in connection with, our due
diligence investigation and review, and our satisfaction in all material respects with the results thereof; (iv) the payment in
full of all fees, expenses and other amounts payable hereunder and under the Fee Letter; (v) the compliance with the provisions
of this Commitment Letter; (vi) the Closing Date on or prior to July 31, 2015; and (vii) the satisfaction of the other conditions
set forth in the Term Sheet.

 

    	 

    	 

    

Ring Energy, Inc.

Page
3

 

		C.	Representations

 

The Company represents
and warrants to SunTrust that all information, other than the Projections, that has been or will be made available to SunTrust
or any of the Lenders by the Company or any of the Company’s representatives (or on your or their behalf) in connection with
the transactions contemplated by this Commitment Letter (the “Information”) is or will be, when furnished, complete
and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements contained therein not misleading and (ii) the Projections
have been or will be prepared in good faith based upon reasonable assumptions. The Company agrees to supplement the Information
and the Projections from time to time so that the representation and warranty contained in this paragraph remains correct. In issuing
the commitments and undertakings hereunder and in arranging and syndicating the Amended Senior Credit Facility, SunTrust Bank and
the Arranger are relying on the accuracy of the Information and the Projections without independent verification thereof.

 

The Company authorizes
the Arranger and its affiliates, including SunTrust Bank, to share with each other, and to use, credit and other confidential or
non-public information regarding the Company to the extent permitted by applicable laws and regulations and for the purpose of
performing their obligations under this Commitment Letter and the Amended Senior Credit Facility.

 

		D.	Indemnities, Expenses, Fees Etc.

 

1.   Indemnification.  The
Company agrees to indemnify and hold harmless the Arranger, SunTrust Bank, each other Lender, their respective affiliates and their
respective directors, officers, employees, agents, representatives, legal counsel, and consultants (each, an “Indemnified
Person”) against, and to reimburse each Indemnified Person upon its demand for, any losses, claims, damages, liabilities
or other expenses (“Losses”) incurred by such Indemnified Person or asserted against such Indemnified Person
by any third party or by the Company or any of its affiliates, arising out of or in connection with this Commitment Letter, the
Fee Letter, the financing and other Transactions or the use of the proceeds of the Amended Senior Credit Facility, or any claim,
litigation, investigation or proceeding relating to any of the foregoing (whether or not such Indemnified Person is a party thereto),
and to reimburse each Indemnified Person upon demand for any legal or other expenses incurred in connection with investigation
or defending any of the foregoing, whether or not such Indemnified Person is a party to any such proceeding, in all cases, whether
or not caused by or arising in whole or in part out of the comparative, contributory or sole negligence of any indemnified person;
provided that the Company shall not be liable pursuant to this indemnity for any Losses to the extent that a court having
competent jurisdiction shall have determined by a final judgment (not subject to further appeal) that such Loss resulted from the
gross negligence or willful misconduct of such Indemnified Person. The Company shall not, without the prior written consent of
any Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which such Indemnified Person
is a party and indemnity has been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the subject matter of such indemnity. No Indemnified Person
shall be responsible or liable to the Company or any other person or entity for any punitive, indirect or consequential damages
in connection with the Amendment or the Amended Senior Credit Facility.

 

2.   Fees and Expenses.
In addition to the fees described in the Term Sheet, the Company will pay (or cause to be paid) the fees set forth in that certain
letter agreement dated as of the date hereof, executed by SunTrust Bank and the Lead Arranger and acknowledged and agreed to by
the Company relating to this Commitment Letter (the “Fee Letter”). The Company also agrees to pay, or to reimburse
SunTrust on demand for, all reasonable costs and expenses incurred by SunTrust (whether incurred before or after the date hereof)
in connection with the Amendment, the Amended Senior Credit Facility, the syndication thereof, the preparation of the Financing
Documentation and the other Transactions, including, without limitation, bank meeting expenses and fees and disbursements of its
counsel, regardless of whether the Closing Date occurs. The Company also agrees to pay all costs and expenses of SunTrust (including,
without limitation, fees and disbursements of its counsel) incurred in connection with the enforcement of any of its rights and
remedies hereunder.

 

    	 

    	 

    

Ring Energy, Inc.

Page
4

 

		E.	Miscellaneous

 

1.   Termination.
This Commitment Letter and all commitment and undertakings of SunTrust hereunder shall expire at 5:00 p.m., Atlanta, Georgia
time, on May 29, 2015, unless by such time the Company executes and delivers to SunTrust and this Commitment Letter and the
Fee Letter. Thereafter, all commitments and obligations of SunTrust under this Commitment Letter will terminate upon the earliest
to occur of (i) consummation of the Acquisition (with or without the use of the Amended Senior Credit Facility), (ii) termination
of the Acquisition Agreement, either by its terms or by a court of competent jurisdiction, or (iii) at 5:00 p.m. Atlanta, Georgia
time on July 31, 2015 unless the Closing Date occurs on or prior to such date. In addition to the foregoing, this Commitment
Letter may be terminated at any time by mutual agreement, and all commitments and undertakings of SunTrust hereunder may be terminated
by SunTrust if the Company fails to perform its obligations under this Commitment Letter or the Fee Letter on a timely basis.

 

2.   No Third-Party
Beneficiaries. This Commitment Letter is solely for the benefit of the Company, SunTrust and the Indemnified Persons; no provision
hereof shall be deemed to confer rights on any other person or entity.

 

3.   No Assignment;
Amendment. This Commitment Letter and the Fee Letter may not be assigned by the Company to any other person or entity, but
all of the obligations of the Company hereunder and under the Fee Letter shall be binding upon the successors and assigns of the
Company. This Commitment Letter and the Fee Letter may be not be amended or modified except in writing executed by each of the
parties hereto.

 

4.   Use of Name
and Information. The Company agrees that any references to SunTrust or any of its affiliates made in connection with the Amended
Senior Credit Facility are subject to the prior approval of SunTrust, which approval shall not be unreasonably withheld. SunTrust
shall be permitted to use information related to the syndication and arrangement of the Amended Senior Credit Facility in connection
with marketing, press releases or other transactional announcements or updates provided to investor or trade publications; including,
but not limited to, the placement of “tombstone” advertisements in publications of its choice at its own expense.

 

5.   Governing
Law; Waiver of Jury Trial. This Commitment Letter and the Fee Letter will be governed by and construed in accordance with the
laws of the state of Texas without regard to the principles of conflicts of laws thereof. EACH OF THE COMPANY AND SUNTRUST IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATED TO THIS COMMITMENT LETTER, THE FEE LETTER OR ANY OF THE TRANSACTIONS OR THE ACTIONS OF SUNTRUST IN THE NEGOTIATION,
PERFORMANCE OR ENFORCEMENT HEREOF.

 

    	 

    	 

    

Ring Energy, Inc.

Page
5

 

THE COMPANY IRREVOCABLY
AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT IN THE STATE OF GEORGIA OR THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF GEORGIA FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
COMMITMENT LETTER, THE FEE LETTER, AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY AND IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY AND IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. A FINAL
JUDGMENT IN ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER COURTS TO WHOSE JURISDICTION
THE COMPANY OR SUNTRUST ARE OR MAY BE SUBJECT, BY SUIT UPON JUDGMENT. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT ON THE
COMPANY MAY BE MADE BY REGISTERED MAIL ADDRESSED TO THE COMPANY AT THE ADDRESS APPEARING AT THE BEGINNING OF THIS LETTER FOR ANY
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT PURSUANT TO THIS COMMITMENT LETTER.

 

6.   Survival. The obligations
of the Company under the expense reimbursement, indemnification, confidentiality, and governing law, submission to jurisdiction,
jury trial waiver and related provisions of this Commitment Letter shall survive the expiration and termination of this Commitment
Letter.

 

7.   Confidentiality. The Company
will not disclose or permit disclosure of this Commitment Letter, the Fee Letter nor the contents of the foregoing to any person
or entity (including, without limitation, any Lender other than SunTrust), either directly or indirectly, orally or in writing,
except (i) to the Company’s officers, directors, agents and legal counsel who are directly involved in the transactions contemplated
hereby, in each case on a confidential basis or (ii) as required by law (in which case the Company agrees to inform SunTrust promptly
thereof).

 

8.   No fiduciary duty. The
Company acknowledges and agrees that (i) the commitment to and syndication of the Amended Senior Credit Facility pursuant to this
Commitment Letter is an arm's-length commercial transaction between the Company, on the one hand, and SunTrust, on the other, (ii)
in connection with the transactions contemplated hereby and the process leading to such transactions, SunTrust is and has been
acting solely as a principal and is not the agent or fiduciary of the Company or its stockholders, creditors, employees or any
other party, (iii) SunTrust has not assumed an advisory responsibility or fiduciary duty in favor of the Company with respect to
the transactions contemplated hereby or the process leading thereto (irrespective of whether SunTrust has advised or is currently
advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this
Commitment Letter, (iv) SunTrust and its affiliates may be engaged in a broad range of transactions that involve interests that
differ from those of the Company and its affiliates, and SunTrust has no obligation to disclose an of such interests by virtue
of any fiduciary or advisory or other relationship as a consequence of this Commitment Letter, and (v) SunTrust has not provided
any legal, accounting, regulatory or tax advice with respect to any transactions contemplated hereby and the Company has consulted
its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate. The Company waives and releases, to
the fullest extent permitted by law, any claims that it may have against SunTrust with respect to any breach or alleged breach
of fiduciary duty as a consequence of this Commitment Letter.

 

    	 

    	 

    

Ring Energy, Inc.

Page
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9.   Counterparts.
This Commitment Letter and the Fee Letter may be executed in any number of separate counterparts, all of which together constitute
one original. Delivery of an executed counterpart of a signature page to this Commitment Letter or the Fee Letter by facsimile
transmission or electronic transmission (in pdf form) shall be as effective as delivery of a manually executed counterpart hereof.

 

10.   Entire Agreement;
Swap Disclaimer. (a) This Commitment Letter and the Fee Letter embody the entire agreement and understanding among SunTrust,
the Company and their affiliates with respect to the Amended Senior Credit Facility and any transactions related thereto, and supersede
all prior understandings and agreements among the parties relating to the subject matter hereof. However, the terms and conditions
of the commitments of SunTrust Bank and the undertakings of the Arranger hereunder are not limited to those set forth herein, in
the Term Sheet or in the Fee Letter; those matters not covered or made clear herein or in the Term Sheet are subject to mutual
agreement of the parties.

 

(b)   Nothing herein
constitutes an offer or recommendation to enter into any “swap” or trading strategy involving a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act. Any such offer or recommendation, if any, will only occur after
we have received appropriate documentation from you regarding whether you are qualified to enter into a swap under applicable law.

 

11.   Patriot Act.
SunTrust hereby notifies the Company that pursuant to the requirements of the USA Patriot Improvement and Reauthorization Act of
2005, Title III of Pub. L. 109-177 (signed into law March 9, 2006) (the “Patriot Act”), it and its affiliates
are required to obtain, verify and record information that identifies the Company, which information includes the name, address,
tax identification number and other information regarding the Company that will allow SunTrust to identify the Company in accordance
with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective for SunTrust
and its affiliates.

 

 

 

[Remainder of this page
is intentionally blank]

 

    	 

    	 

    

 

 

We look forward to
working with you on this important transaction.

 

 

Very truly yours,

 

SUNTRUST BANK

 

 

 

By: /s/ Scott Mackey                             

Scott Mackey

Director

 

 

SunTrust
Robinson Humphrey, Inc.

 

 

 

By: /s/ Dan Mayer                                 

Dan Mayer

Director

 

 

 

    	Signature Page to Commitment Letter

    	 

    

 

ACCEPTED AND AGREED

this 21 day of May, 2015:

 

 

RING ENERGY, INC. 

 

 

 

 

By:  /s/ William R. Broaddrick                              

William R. Broaddrick

Vice President and Chief Financial Officer

 

 

 

 

 

 

 

    	Signature Page to Commitment LetterEX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into between Group 1 Automotive, Inc.
(“Employer”), and Earl J. Hesterberg (“Employee”), effective as of May 19, 2015 (the “Effective
Date”).

RECITALS

WHEREAS, Employer and Employee previously entered into an employment agreement dated September
8, 2010, as amended February 27, 2012 (the “Prior Employment Agreement”) and they desire to
continue the employment relationship without interruption under the following terms and supersede
the Prior Employment Agreement in its entirety.

WHEREAS, Employee has made the following representations to Employer, and Employer is relying
upon such representations: (i) the Employee is currently employed by Employer pursuant to the Prior
Employment Agreement and Non-Compete Agreement; (ii) Employee is not subject to any non-compete or
other provision in any other agreement to which he is a party that would restrict his ability to
perform his obligations under this Agreement; and (iii) Employee is not bound by the terms of any
other agreement that would prevent him from performing his obligations under this Agreement.

WHEREAS, simultaneously with the execution of this Agreement, Employer and Employee will
execute a further Non-Compete Agreement (“Non-Compete Agreement”) which shall continue Employee’s
non-competition obligations to Employer and nothing herein shall affect the enforceability of
either the prior non-compete agreement or the Non-Compete Agreement.

AGREEMENT

For and in consideration of the mutual promises, covenants, and obligations contained herein,
Employer and Employee agree as follows:

	1.	 	EMPLOYMENT AND DUTIES

1.1. Agreement to Employ. Employer shall employ Employee, and Employee shall be
employed by Employer, beginning on the Effective Date and continuing throughout the Term (as
defined below) of this Agreement, subject to the terms and conditions of this Agreement and the
Non-Compete Agreement.

1.2. Position and Responsibilities. Employee shall serve as Chief Executive Officer
of Employer. Employee shall perform diligently the duties and services appertaining to such
position as reasonably determined by the Board of Directors of Employer, as well as such additional
duties and services appropriate to such position which Employee from time to time may be reasonably
directed to perform by the Board of Directors of Employer. Employee shall at all times comply with
and be subject to such reasonable policies and procedures as the Board of Directors of Employer may
establish from time to time, which shall not be contrary to the terms of this Agreement. Employee
shall devote Employee’s full business time, energy, and best efforts to the business and affairs of
Employer. Employee shall not engage, directly or indirectly, in any other business, investment, or
activity that interferes with Employee’s performance of Employee’s duties hereunder, is contrary to
the interests of Employer or any of its subsidiaries or affiliates, or requires any significant
portion of Employee’s business time; provided, however, that Employee may engage in passive
personal investments that do not conflict with the business and affairs of Employer or any of its
subsidiaries or affiliates or interfere with Employee’s performance of his duties hereunder.
Employee shall not be required to perform any illegal activity or to sign-off on any materially
inappropriate financial statement or acknowledgement in the course of the performance of his duties
hereunder and any request by Employer that Employee violate the provisions of this sentence shall
be deemed to be a material breach of Employer’s obligations under this Agreement.

1.3. Fiduciary Duties. Employee acknowledges and agrees that Employee owes a
fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of
Employer or any of its subsidiaries or affiliates and to do no act which would be inconsistent with
those duties. In keeping with these duties, Employee shall make full disclosure to Employer of all
business opportunities pertaining to Employer’s business and shall not appropriate for Employee’s
own benefit business opportunities concerning the subject matter of the fiduciary relationship.

1.4. Conflicts of Interest. Any direct or indirect interest of Employee in
connection with, or benefit received by the Employee from, any outside activities, particularly
commercial activities, which might in any way adversely affect Employer, or any of its affiliates,
shall be deemed to be a conflict of interest. In keeping with Employee’s fiduciary duties to
Employer, Employee shall not knowingly become involved in a conflict of interest with Employer, or
its affiliates, or upon discovery thereof, allow such a conflict to continue. Moreover, Employee
agrees that Employee shall disclose to Employer’s Vice President, General Counsel and the audit
committee of the Employer’s board of directors (the “Board”) any facts which might involve such a
conflict of interest that has not been approved by the Board. The Employer’s determination as to
whether a conflict of interest exists shall be conclusive absent manifest error; but this standard
shall not apply to, nor shall any determination under this Section 1.4 affect, any issue that may
arise as to the existence of “cause” under Section 3.2(i). Employer reserves the right to take
such action as, in its judgment, will resolve the conflict, as long as such action is not contrary
to the terms of this Agreement.

	2.	 	COMPENSATION AND BENEFITS

2.1. Base Salary. Employee’s base salary shall be $1,100,000.00 per annum,
retroactive to January 1, 2015, and shall be paid in semi-monthly installments in accordance with
Employer’s standard payroll practice. Employee’s base salary may be increased from time to time by
Employer and, after any such increase, Employee’s new level of base salary shall be Employee’s base
salary for purposes of this Agreement until the effective date of any subsequent change. At any
time, Employee’s base salary shall not be reduced other than pursuant to a reduction that is
applied to substantially all other executive officers of Employer and that is no greater than the
percentage applied to substantially all other executive officers.

2.2. Annual Incentive Compensation Program. Employee’s bonus shall be determined by
the compensation committee of the Board (the “Compensation Committee”) in its sole discretion in
accordance with the terms of Employer’s Annual Incentive Compensation Program. Notwithstanding the
foregoing, Employee shall receive, no later than March 31st of each calendar year, his
Annual Incentive Compensation Program outlining his potential bonus calculations and performance
criteria to achieve such discretionary bonus for such calendar year. Any payments made pursuant to
the Annual Incentive Compensation Program shall be made on or before March 15th of the year
following the year in which the services giving rise to such bonus award were performed, after the
release of earnings for the performance period in which the services giving rise to such bonus
award were performed.

2.3. Long-Term Incentive Compensation.

	 	(i)	 	Initial Grant. The terms of this Agreement shall not affect the existing terms
or conditions of any grants previously issued to Employee.

	 	(ii)	 	Additional Grants. Employee shall be eligible to receive additional grants
under Employer’s 2014 Long Term Incentive Plan, or any successor plans, in such amounts
as determined in the sole discretion of the Compensation Committee, including grants of
options, Restricted Stock, or Restricted Stock Units. The Employer will vest all
unvested grants that have not previously vested on or before the Employee’s date of
termination, upon Employee’s completion of the Term or Subsequent Term of this
Agreement or resignation during Subsequent Term, and satisfaction of all
post-employment obligations set forth in Section 1 of the Non-Compete Agreement. Any
such termination after completion of the Term of this Agreement will be treated as a
“planned retirement” as defined in the 2007 LTIP Award Agreement or a “qualified
retirement” as defined in the 2014 LTIP Restricted Stock Agreement, if applicable.

	 	(iii)	 	Options. If Employee is granted stock options, Employee shall enter into a
separate written stock option agreement pursuant to which Employee shall be granted the
option to acquire common stock of Employer subject to the terms and conditions of
Employer’s 2014 Long Term Incentive Plan, or any successor plan, and the stock option
agreement entered into thereunder. The number of shares, exercise price per share and
other terms of the options shall be as specified in such other written agreement,
unless modified specifically herein. The Employer will vest all unvested grants that
have not previously vested on or before the Employee’s date of termination, upon
Employee’s completion of the term of this Agreement or whenever he chooses to resign
thereafter, and satisfaction of all post-employment obligations set forth in Section 1
of the Non-Compete Agreement. Any such termination after completion of the Term of
this Agreement will be treated as a “planned retirement” as defined in the 2007 LTIP
Award Agreement or a “qualified retirement” as defined in the 2014 LTIP Restricted
Stock Agreement, if applicable. If any stock options granted during employment expire
during the period of post-employment obligations, then Employee shall be entitled to
exercise the options for a period of ninety (90) days following the satisfaction of all
post-employment obligations.

	 	(iv)	 	Condition of Grants. The rights and liabilities of Employer and Employee
regarding entitlement to, and vesting of any long-term incentive compensation granted
pursuant to this Agreement shall be conditioned and dependent on the Employee’s consent
and agreement to the promises set forth in the Non-Compete Agreement and Section 5 of
this Agreement. In the event that any provision set forth in the Non-Compete Agreement
is violated, Employer shall have the right, among other remedies, to demand forfeiture
of any cash and equity grants awarded or vested during the twelve (12) months prior to
such violation or declaration.

2.4. Benefits and Vacation. While employed by Employer, Employee shall be allowed
to participate, on the same basis generally as other executive level employees of Employer, in all
general and executive level employee benefit plans and programs, including improvements or
modifications of the same, which on the Effective Date or thereafter are made available by Employer
to all or substantially all of Employer’s employees. Such benefits, plans, and programs may
include, without limitation, medical, health, vision and dental care, life insurance, disability
protection, deferred compensation and retirement plans. Employer will furnish Employee two
“demonstrator vehicles” of Employee’s choice. Additional perquisites must be approved by the
Board. Nothing in this Agreement is to be construed or interpreted to provide greater rights,
participation, coverage, or benefits under such benefit plans or programs than provided to
similarly situated employees pursuant to the terms and conditions of such benefit plans and
programs. In addition, Employer may furnish to Employee executive benefit plans and programs that
are not generally available to all other employees, including, without limitation, Employer’s
Deferred Compensation Plan, Executive Long-Term Disability Plan, and executive life insurance
programs.

2.5. Business Expenses. Employee shall be entitled to incur, and be reimbursed for,
all reasonable out-of-pocket business expenses incurred in the performance of Employee’s duties on
behalf of Employer. Employer shall reimburse Employee for such expenses, in accordance with
Employer’s policies regarding reimbursement of expenses (which policies will comply with Treasury
Regulation § 1.409A-3(i)(1)(iv)), subject to the Employee presenting appropriate supporting
documents regarding such expenses as required by such policies.

2.6. Benefit Obligations. Employer shall not by reason of this Section 2 be
obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any
incentive compensation or employee benefit program or plan, so long as such actions are similarly
applicable to other covered employees generally. Moreover, unless specifically provided for in a
written plan document adopted by the Board or the Compensation Committee, none of the benefits or
arrangements described in this Section 2 shall be secured or funded in any way, and each shall
instead constitute an unfunded and unsecured promise to pay money in the future exclusively from
the general assets of Employer and its subsidiaries and affiliates.

2.7. Taxes. Employer may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be required pursuant
to any law or governmental regulation or ruling.

	3.	 	TERM OF THIS AGREEMENT, EFFECT OF EXPIRATION OF TERM, AND TERMINATION PRIOR TO
EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION	 

3.1. Term. The term of this Agreement shall commence on the Effective Date and
continue for three (3) years thereafter (the “Term”), unless earlier terminated as provided for
herein. The Agreement shall automatically renew for additional terms of one year (“Subsequent
Term(s)”) until either Employee or Company issues a written notice of non-renewal. The notice of
non-renewal shall be issued no less than one year prior to conclusion of the Term or final
Subsequent Term. Upon termination of such employment by either Employer or Employee for
any reason whatsoever, (i) all compensation benefits to Employee shall cease and terminate (except
Employee shall be entitled to pro rata salary through the date of such termination and all equity
grants that have not vested prior to termination will be vested upon successful satisfaction of
post-employment obligations), and (ii) Employee shall be entitled to a pro rata bonus through the
date of such termination, calculated in accordance with the Employer’s Incentive Compensation Plan
and paid in a single lump sum payment at the later of (1) the first day of the seventh month
following the Employee’s Separation from Service (as defined in Section 3.12), or (2) March 15th of
the year following the year in which Separation from Service occurred, after the release of
earnings for the year in which Separation from Service occurred. Other than payment of the pro
rata salary and pro rata bonus as set forth in this Section 3.1, subject to the following sentence,
Employee shall not be entitled to any other compensation as a result of voluntary or involuntary
termination of employment, except as otherwise provided herein. Employer shall have the option of
paying Employee for part or all of the oneyear notice period in lieu of providing part or all of
the notice. Any such payment in lieu of notice shall be payable in a lump sum payment on the first
day of the seventh month following the Employee’s Separation from Service.

3.2. Termination by Employer. Notwithstanding any other provisions of this
Agreement, Employer shall have the right to terminate Employee’s employment under this Agreement at
any time, including during the Term, for any of the following reasons:

	 	(i)	 	For “cause,” which, as used in this Section 3.2(i), shall mean any of the
following; (a) the Employee’s conviction or plea of nolo contendere to a felony or a
crime involving moral turpitude; (b) the Employee’s breach of any material provision of
either this Agreement, the Employee Handbook, Employer’s Code of Conduct, or the Code
of Ethics for Specified Officers of Employer signed by Employee; (c) the Employee’s
using for his own benefit any confidential or proprietary information of Employer, or
willfully divulging for his benefit such information; (d) the Employee’s (1) fraud or
(2) misappropriation or theft of any of the Employer’s funds or property; or (e) the
Employee’s willful refusal to perform his duties or gross negligence, provided that
Employer, before terminating Employee under subsection (b) or (e) must first give
written notice to Employee of the nature of the alleged breach or refusal and must
provide the Employee with a minimum of fifteen (15) days to correct the problem and,
provided further, before terminating Employee for purported gross negligence Employer
must give written notice that explains the alleged gross negligence in detail and must
provide Employee with a minimum of twenty (20) days to correct the problem, unless
correction is inherently impossible;

	 	(ii)	 	For any other reason whatsoever, including termination without cause, in the
sole discretion of Employer’s Board of Directors;

	 	(iii)	 	Upon Employee’s death; or

	 	(iv)	 	Upon Employee’s becoming incapacitated by accident, sickness, or other
circumstance which in the reasonable opinion of a qualified doctor approved by the
Board renders him mentally or physically incapable of performing the essential
functions of Employee’s position, with or without reasonable accommodation, and which
will continue in the reasonable opinion of such doctor for a period of not less than
180 days. If the Employee disagrees with the determination, the Employee may appoint a
doctor of his own choosing and if that doctor reaches a determination different than
that of the first doctor, the two doctors shall mutually select a third doctor within
ten (10) days and such third doctor’s determination shall be deemed conclusive.

The termination of Employee’s employment shall constitute a “Termination for Cause” if made
pursuant to Section 3.2(i); the effect of such termination is specified in Section 3.4.

The termination of Employee’s employment shall constitute an “Involuntary Termination” if made
pursuant to Section 3.2(ii); the effect of such termination is specified in Section 3.5.

The effect of the employment relationship being terminated pursuant to Section 3.2(iii) as a result
of Employee’s death is specified in Section 3.7.

The effect of the employment relationship being terminated pursuant to Section 3.2(iv) as a result
of the Employee’s inability to perform the essential functions of the position is specified in
Section 3.8.

3.3. Termination by Employee. Notwithstanding any other provisions of this
Agreement, Employee shall have the right to terminate the employment relationship under this
Agreement at any time for any of the following reasons:

	 	(i)	 	A breach by Employer of any material provision of this Agreement or the
occurrence of a “Constructive Termination Event,” which shall be defined as (a) the
material failure by the Employer to pay the Employee’s compensation as provided in this
Agreement or a material diminution of the Employee’s base salary or incentive
compensation targets, (b) relocation without the Employee’s prior written consent of
the Employee’s primary employment location to a location that is more than 50 miles
from the location to which he was required to report on the Effective Date, (c) a
material diminution in the Employee’s position, duties, responsibilities, reporting
status, or authority, without the Employee’s prior written consent, or (d) if the
Employee is requested to perform any illegal activity or to sign-off on any materially
inappropriate financial statement or acknowledgement, except that before exercising his
right to terminate the employment relationship pursuant to any of the provisions of
this subsection (i), the Employee must first give written notice to the Employer’s
Board of Directors of the circumstances purportedly giving rise to his right to so
terminate within 90 days of the initial existence of the Constructive Termination Event
and must provide the Employer with a minimum thirty (30) days to correct the problem,
unless correction is inherently impossible; provided, however, that in the event of a
Corporate Change (as defined below) in which Employer either ceases to exist and its
successor does not succeed to Employer’s obligations under this Agreement by operation
of law or Employer has sold or otherwise disposed of substantially all its assets, if
Employer’s successor assumes in writing Employer’s obligations under this Agreement
effective as of the date of such Corporate Change, Employee shall not be entitled to
resign for the reasons described in Section 3.3(i) or 3.3(ii) and receive the
compensation and benefits described in Section 3.5 without a material breach by such
successor of this Agreement or a Constructive Termination Event or “Compensation
Reduction” (as defined below) occurring upon or following such Corporate Change. Any
termination of employment under this Section 3.3(i) must occur not later than two years
following the initial existence of the Constructive Termination Event.

	 	(ii)	 	The involuntary material reduction of Employee’s base salary or incentive
compensation targets (other than a reduction in such targets applied consistently to
the Company’s other executive officers that is designed to account for changes in
relative EPS projections as a result of such Corporate Change) within six (6) months
after the occurrence of any Corporate Change (defined below) (a “Compensation
Reduction”) that is not cured by Employer or its successor, as applicable, within
thirty (30) days of receiving detailed written notice of such event from Employee,
which notice must be provided within 90 days of the initial existence of such
Compensation Reduction. Any termination of employment under this Section 3.3(ii) must
occur not later than two years following the initial existence of the Compensation
Reduction. A “Corporate Change” shall mean the first to occur of any of the following
events: (1) an acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (each, a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 50% or more of either: (i) the then
outstanding shares of common stock of Employer (the “Outstanding Common Stock”) or (ii)
the combined voting power of the then outstanding voting securities of Employer
entitled to vote generally in the election of directors (the “Outstanding Voting
Securities”); excluding, however, the following: (A) any acquisition directly from
Employer (including without limitation any public offering), other than an acquisition
by virtue of the exercise of a conversion privilege unless the security being so
converted was itself acquired directly from Employer; (B) any acquisition by Employer;
(C) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by Employer or any Person controlled by Employer; or (D) any acquisition by
any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (1) of this definition of “Corporate Change”); (2) the consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of Employer (a “Corporate Transaction”); excluding,
however, such a Corporate Transaction pursuant to which (i) all or substantially all of
the individuals and entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or indirectly, more than 50% of,
respectively, the outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Corporate Transaction
(including, without limitation, an entity which as a result of such transaction owns
Employer or all or substantially all of the Employer’s assets, either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the Outstanding Common
Stock and Outstanding Voting Securities, as the case may be, and (ii) no Person or
group (other than Employer, any employee benefit plan (or related trust) sponsored or
maintained by Employer, by any entity controlled by Employer, or by such entity
resulting from such Corporate Transaction) will beneficially own, directly or
indirectly, more than 50% of, respectively, the outstanding shares of common stock of
the entity resulting from such Corporate Transaction or the combined voting power of
the outstanding voting securities of such corporation entitled to vote generally in the
election of directors, except to the extent that such ownership existed with respect to
Employer prior to the Corporate Transaction or (3) the approval by the stockholders of
Employer of a complete liquidation or dissolution of Employer, other than to a
corporation pursuant to a transaction which would comply with clauses (i) and (ii) of
subsection (2) of this definition of “Corporate Change,” assuming for this purpose that
such transaction were a Corporate Transaction. Any such Corporate Change must also
constitute a change in control as such phrase is defined in section 409A(a)(2)(A)(v) of
the Internal Revenue Code of 1986, as amended (the “Code”) and the guidance issued
thereunder, including consideration of all applicable attribution of ownership rules
under section 318 of the Code to the extent required by any guidance under section 409A
of the Code; or

	 	(iii)	 	For any other reason whatsoever, in the sole discretion of Employee.

The termination of Employee’s employment by Employee shall constitute an “Involuntary Termination”
if made pursuant to Section 3.3(i) or 3.3(ii); the effect of such termination is specified in
Section 3.5. The termination of Employee’s employment by Employee shall constitute a “Voluntary
Termination” if made pursuant to Section 3.3(iii); the effect of such termination is specified in
Section 3.4.

3.4. Payments Upon Voluntary Termination and Termination for Cause. Upon a
“Voluntary Termination” of the employment relationship during the Term by Employee pursuant to
Section 3.3(iii), or for “cause” by Employer pursuant to Section 3.2(i), all compensation and
benefits for Employee shall cease and terminate as of the date of termination. Employee shall be
entitled to pro rata salary, accrued but unpaid vacation (pursuant to the applicable vacation
policy) and reimbursement of expenses actually incurred through the date of such termination
subject to Section 2.5 (the “Accrued Entitlements”), but Employee shall not be entitled to any
bonuses with respect to the operations of Employer, its subsidiaries and/or affiliates for the
calendar year in which Employee’s employment with Employer is terminated. Employee will be
entitled to the use of the “demonstrator vehicles” provided pursuant to Section 2.4 for 30 days
following date of termination; provided, however, that the taxable benefit to the Employee does not
exceed the limit set forth in section 402(g)(1)(B) of the Code in the calendar year of the
Employee’s Separation from Service with Employer.

3.5. Payments Upon Involuntary Termination.

	 	(i)	 	Upon an Involuntary Termination of the employment relationship during the Term
by Employer pursuant to Section 3.2(ii) or by Employee pursuant to Section 3.3(i), in
addition to the Accrued Entitlements, Employee shall be entitled, in consideration of
Employee’s continuing obligations hereunder after such termination (including, without
limitation, Employee’s non-competition obligations as set forth in the Non-Compete
Agreement), to receive a payment in an amount equal to Employee’s base salary
determined pursuant to Section 2.1 and as in effect immediately prior to the
Involuntary Termination, divided by twelve (12) and multiplied by the greater of (i)
twelve (12) months or (ii) the number of months remaining in the Term, payable in a
single lump sum payment on the first day of the seventh month following the Employee’s
Separation from Service. Employee shall also be entitled to a pro-rated bonus (based on
termination date), calculated in accordance with the Employer’s Annual Incentive
Compensation Program and paid in a single lump sum payment at the later of (1) the
first day of the seventh month following the Employee’s Separation from Service, or (2)
March 15th of the year following the year in which Separation from Service occurred,
after the release of earnings for the performance period in which the services giving
rise to such bonus award were performed.

	 	(ii)	 	Upon an Involuntary Termination of the employment relationship by Employee
pursuant to Section 3.3(ii), in addition to the Accrued Entitlements, Employee shall be
entitled, in consideration of Employee’s continuing obligations hereunder after such
termination (including, without limitation, Employee’s non-competition obligations as
set forth in the Non-Compete Agreement), to receive a payment in an amount equal to
Employee’s base salary determined pursuant to Section 2.1 and as in effect immediately
prior to the Involuntary Termination, divided by twelve (12) and multiplied by thirty
(30) months, payable in a single lump sum payment on the first day of the seventh month
following the Employee’s Separation from Service.

	 	(iii)	 	In the event of an Involuntary Termination pursuant to Sections 3.2(ii),
3.3(i) or 3.3(ii), all Restricted Stock and stock options granted to Employee shall
become 100% vested, the exercise of which shall continue to be permitted as if
Employee’s employment had continued for the full Term. Employee will be entitled to a
pro-rated bonus (based on termination date), calculated in accordance with the
Employer’s Annual Incentive Compensation Program and paid in a single lump sum payment
at the later of (1) the first day of the seventh month following the Employee’s
Separation from Service, or (2) March 15th of the year following the year in which
Separation from Service occurred, after the release of earnings for the performance
period in which the services giving rise to such bonus award were performed. The
Employee will also be eligible for use of the “demonstrator vehicles” provided pursuant
to Section 2.4 for six months following the Separation from Service; provided, however,
that the taxable benefit to the Employee does not exceed the limit set forth in section
402(g)(1)(B) of the Code in the calendar year of the Employee’s Separation from Service
with the Employer.

	 	(iv)	 	In the event of an Involuntary Termination pursuant to Section 3.3(ii), if it
shall be determined by the IRS that any payment or distribution by the Employer to or
for the benefit of the Employee, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any interest or penalties are incurred by the Employee with respect to such
excise tax (such excise tax, together with interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then Employer shall reimburse Employee
for reasonable costs incurred by Employee disputing such determination, up to the
amount of $100,000; provided, however, Employer shall not be required to pay any Excise
Tax on behalf of Employee.

	 	(v)	 	Employee shall not be under any duty or obligation to seek or accept other
employment following Involuntary Termination and the amounts due Employee hereunder
shall not be reduced or suspended if Employee accepts subsequent employment. The
rights and liabilities of Employer and Employee regarding entitlement to vesting of all
Restricted Stock and stock options, shall be conditioned and dependent on the
Employee’s consent and agreement to the promises set forth in the Non-Compete Agreement
and Section 5 of this Agreement, and governed by respective plan documents and
agreements and to the enforceability of such covenants stated therein.

3.6. Covenant Not to Sue. Employee shall not sue or lodge any claim, demand or
cause of action against Employer based on Involuntary Termination for any monies other than those
specified in Section 3.5. If Employee breaches this covenant, Employer, and its subsidiaries and
affiliates shall be entitled to recover from Employee all sums expended by Employer, and its
subsidiaries and affiliates (including costs and attorneys’ fees) in connection with such suit,
claim, demand or cause of action. Employer and its subsidiaries and affiliates shall not be
entitled to offset any of the amounts specified in the immediately preceding sentence against
amounts otherwise owing by Employer and its subsidiaries and affiliates to Employee prior to a
final determination under the terms of the arbitration provisions of this Agreement that Employee
has breached the covenant contained in this Section 3.6.

3.7. Payments Upon Employee’s Death. Upon termination of the employment
relationship as a result of Employee’s death (i) Employee’s heirs, administrators, or legatees
shall be entitled to Employee’s Accrued Entitlements through the date of such termination, and
Employee’s heirs, administrators, or legatees shall be entitled to a pro-rated bonus (based on date
of death), calculated in accordance with the Employer’s Annual Incentive Compensation Program and
paid on or before March 15th of the year following the year in which such termination
occurred, after the release of earnings for the performance period in which the services giving
rise to such bonus award were performed; and (ii) all Restricted Stock and stock options granted to
Employee shall become 100% vested. Employee’s surviving spouse will be eligible for the use of one
“demonstrator vehicle” provided pursuant to Section 2.4 for 12 months from date of death of
Employee.

3.8. Payments Upon Employee’s Incapacity. Upon termination of the employment
relationship as a result of Employee’s incapacity pursuant to Section 3.2(iv): (i) Employee shall
be entitled to his Accrued Entitlements through the date of such termination, and Employee shall be
entitled to a pro-rated bonus (based on date of disability), calculated in accordance with the
Employer’s Annual Incentive Compensation Program and paid in a single lump sum payment at
the later of (1) the first day of the seventh month following the Employee’s Separation from
Service, or (2) March 15th of the year following the year in which Separation from Service
occurred, after the release of earnings for the performance period in which the services giving
rise to such bonus award were performed; and (ii) all Restricted Stock and stock options granted to
Employee shall become 100% vested. The Employee would also be eligible for use of one “demonstrator
vehicle” provided pursuant to Section 2.4 for six months from date of disability; provided,
however, that the taxable benefit to the Employee does not exceed the limit set forth in section
402(g)(1)(B) of the Code.

3.9. Right of Set-Off. In all cases, the compensation and benefits payable to
Employee under this Agreement upon Separation from Service shall be reduced and offset by any
amounts to which Employee may otherwise be entitled; however, this severance is in lieu of any
other severance he is now or hereafter entitled to receive (excluding any pension, retirement and
profit sharing plans of Employer that may be in effect from time to time) (“Other Severance”).
However, in the event this Section 3.9 would result in a substitution for a payment of deferred
compensation otherwise payable pursuant to this Agreement within the meaning of Treasury Regulation
§ 1.409A-3(f) and an impermissible change in the timing of the payment of deferred compensation
pursuant to Section 409A of the Code and the guidance promulgated pursuant thereto, then no amounts
payable pursuant to this Agreement will be reduced and instead such Other Severance to which the
Employee would be entitled shall be forfeited.

3.10. Continuation of Certain Obligations. Termination of the employment
relationship shall not terminate those obligations imposed by this Agreement which are continuing
in nature, including, without limitation, Employee’s obligations of confidentiality,
non-competition and Employee’s continuing obligations with respect to business opportunities that
had been entrusted to Employee by Employer during the employment relationship.

3.11. Scope of Agreement. This Agreement shall govern the rights and obligations of
Employer and Employee with respect to Employee’s salary and other perquisites of employment.

3.12. Certain Tax Considerations. Any references in this Agreement to a
“termination,” “termination of employment,” “date of termination” or similar reference to the
cessation of services for the Employer shall be interpreted to mean a “separation from service”
from the Employer and affiliates within the meaning of Section 409A(a)(2)(A)(i) of the Internal
Revenue Code of 1986, as amended (the “Code”) and Treasury Regulation § 1.409A-1(h) (a “Separation
from Service”). This Agreement shall be administered and interpreted to maximize the short-term
deferral exception to Section 409A of the Code, and Employee shall not, directly or indirectly,
designate the taxable year of a payment made under this Agreement. The portion of any payment
under this Agreement that is not a “deferral of compensation” and is paid within the “short-term
deferral period” within the meaning of Treasury Regulation § 1.409A-1(b)(4) shall be treated as a
short term deferral and not aggregated with other plans or payments. Any other portion of the
payment that does not meet the short-term deferral requirement shall, to the maximum extent
possible, be deemed to satisfy the exception from Treasury Regulation § 1.409A-1(b)(9)(iii)(A) for
involuntary separation pay and shall not be aggregated with any other payment. Any right to a
series of installment payments pursuant to this Agreement is to be treated as a right to a series
of separate payments. Any amount that is a short-term deferral within the meaning of Treasury
Regulation § 1.409A-1(b)(4), or within the involuntary separation pay limit under Treasury
Regulation § 1.409A-1(b)(9)(iii)(A) shall be treated as a separate payment. Payment dates provided
for in this Agreement shall be deemed to be timely paid if paid within any additional time for
payment following the specified payment date as is permitted under Section 409A of the Code
and the regulations promulgated thereunder. To the extent that any payments or reimbursements
provided to Employee under this Agreement are deemed to constitute deferred compensation to
Employee, such amounts shall be paid or reimbursed by the deadline for payment or reimbursement
specified in this Agreement but, if not so specified, reasonably promptly, but not later than
December 31 of the year following the year in which the expense was incurred. The amount of any
payments or expense reimbursements that constitute deferred compensation in one year shall not
affect the amount of payments or expense reimbursements constituting deferred compensation that are
eligible for payment or reimbursement in any subsequent year, and Employee’s right to such payments
or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other
benefit. In addition, notwithstanding anything to the contrary in this Agreement, no compensation
or benefits, including without limitation any severance payments or benefits payable under Section
3 hereof, shall be paid to Executive during the 6-month period following Executive’s Separation
from Service if the Company determines that paying such amounts at the time or times indicated in
this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If
the payment of any such amounts is delayed as a result of the previous sentence, then on the first
day of the seventh month following the end of such 6-month period (or such earlier date upon which
such amount can be paid under Section 409A of the Code without resulting in a prohibited
distribution, including as a result of Executive’s death), the Company shall pay Executive a
lump-sum amount equal to the cumulative amount that would have otherwise been payable to Executive
during such period.

3.13. Medical Coverage Continuation. In the event of the termination of Employee’s
employment relationship by Employer pursuant to Section 3.2 for any reason other than “cause” (as
defined in Section 3.2(i)) or by Employee pursuant to Section 3.3(i) or 3.3(ii), Employer shall
provide Employee and, if he is married on the date of such termination, his spouse, to the extent
that they were covered under Employer’s group medical benefits program for active employees (the
“Employer Medical Plan”) at the date of termination, continued coverage under the Employer Medical
Plan until the earliest to occur of the following events: (i) the Employee or his spouse receives
substantially comparable coverage and benefits under the plans and programs of a subsequent
employer, (ii) the later of the death of Employee or, if applicable, his spouse or (iii) the
expiration of the 36 month period beginning on July 1, 2015. Notwithstanding the foregoing, at
Employer’s election, and for all or part of the coverage duration described in the preceding
sentence, Employer may provide such continued medical coverage under an insured arrangement that is
purchased from a third party and that provides coverage substantially comparable to that provided
at the time of Employee’s termination to active employees under the Employer Medical Plan.
Employee or, after his death, Employee’s spouse (if applicable) shall pay for the full cost of such
coverage at the time such coverage is provided and Employer shall reimburse Employee or, after his
death, Employee’s spouse (if applicable) at a rate of 140% of the actual cost incurred on or within
10 days following the first day of each calendar quarter with respect to amounts paid by Employee
and/or his spouse (if applicable) during the immediately preceding calendar quarter; provided,
however, that amount of such reimbursement for each month of medical coverage provided under this
Section 3.13 shall not exceed 140% of the then-applicable monthly cost of COBRA continuation
coverage for Employee (and/or his spouse, as applicable) under the Employer Medical Plan per month;
and provided, further, however, that to the extent that such benefit and any other miscellaneous
separation pay benefits subject to Section 409A of the Code that are provided during the first six
months following Employee’s termination of employment (for reasons other than Employee’s death)
exceed the applicable dollar amount under Section 402(g)(1)(B) of the Code for the year in which
such termination occurs, Employer shall reimburse Employee for 140% of the actual cost incurred for
such coverage, subject to the limitation described above, for such six month period on the first
day following the expiration of such six month period or within five days thereafter.

	4.	 	UNITED STATES FOREIGN CORRUPT PRACTICES ACT AND OTHER LAWS

4.1. Compliance with Foreign Corrupt Practices Act. Employee shall at all times
comply with United States laws applicable to Employee’s actions on behalf of Employer and its
subsidiaries and affiliates, including specifically, without limitation, the United States Foreign
Corrupt Practices Act, generally codified in 15 USC 78 (“FCPA”), as the FCPA may hereafter be
amended, and/or its successor statutes. If Employee pleads guilty to or nolo contendere or admits
civil or criminal liability under the FCPA or other applicable United States law, or if a court
finds that Employee has personal civil or criminal liability under the FCPA or other applicable
United States law, or if a court finds that Employee committed an action resulting in Employer or
any of its subsidiaries having civil or criminal liability or responsibility under the FCPA or
other applicable United States law, such action or finding shall constitute “cause” for termination
under this Agreement in accordance with Section 3.2(i) unless the Board determines that the actions
found to be in violation of the FCPA or other applicable United States law were taken in good faith
and in compliance with all applicable policies of Employer. The rights afforded Employer under
this provision are in addition to any and all rights and remedies otherwise afforded by the law.

	5.	 	OWNERSHIP AND PROTECTION OF INFORMATION; COPYRIGHTS

5.1. Promise to Provide Confidential and Proprietary Information. Employer owns
certain confidential and proprietary information and trade secrets which it hereby promises to
provide to Employee for the purpose of carrying out his employment responsibilities hereunder.
Furthermore, Employer promises to provide Employee with confidential and proprietary information
and trade secrets regarding Employer and its subsidiaries and affiliates, in order to assist
Employee in satisfying his obligations hereunder. In addition, Employer promises to provide
Employee with specialized training including orientation, sales and financial information, and
computer and systems training.

5.2. Return of Proprietary Material. All information, ideas, concepts,
improvements, discoveries, and inventions, whether patentable or not, which are conceived, made,
developed or acquired by Employee, individually or in conjunction with others, during Employee’s
employment by Employer (whether during business hours or otherwise and whether on Employer’s
premises or otherwise) which relate to Employer’s or any of its subsidiaries’ or affiliates’
businesses, products or services (including, without limitation, all such information relating to
corporate opportunities, research, financial and sales data, pricing and trading terms,
evaluations, opinions, interpretations, acquisition prospects, the identity of customers or their
requirements, the identity of key contacts within the customer’s organizations or within the
organization of acquisition prospects, or marketing and merchandising techniques, prospective
names, and marks) shall be disclosed to Employer and are and shall be the sole and exclusive
property of Employer. Upon termination of Employee’s employment, for any reason, Employee promptly
shall deliver the same, and all copies thereof, to Employer.

5.3. Nondisclosure of Confidential Information. Except as required by law or
process, and in consideration for the promises contained in Section 5.1 above, Employee promises
that he will not, at any time during or after his employment by Employer, make any unauthorized
disclosure of any confidential business information or trade secrets of Employer or its
subsidiaries or affiliates, or make any use thereof, except in the carrying out of his employment
responsibilities hereunder. As a result of Employee’s employment by Employer, Employee may also
from time to time have access to, or knowledge of, confidential business information or trade
secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of
Employer and its subsidiaries and affiliates. Employee also agrees to preserve and protect the
confidentiality of such third party confidential information and trade secrets to the same extent,
and on the same basis, as Employer’s or any of its subsidiaries’ or affiliates’ confidential
business information and trade secrets.

5.4. Ownership of Copyrighted Works. If, during Employee’s employment by Employer,
Employee creates any original work of authorship fixed in any tangible medium of expression which
is the subject matter of copyright (such as videotapes, written presentations on acquisitions,
computer programs, E-mail, voice mail, electronic databases, drawings, maps, architectural
renditions, models, manuals, brochures, or the like) relating to Employer’s, or any of its
subsidiaries’ or affiliates’ businesses, products, or services, whether such work is created solely
by Employee or jointly with others (whether during business hours or otherwise and whether on
Employer’s or any of its subsidiaries’ or affiliates’ premises or otherwise), Employer shall be
deemed the author of such work if the work is prepared by Employee in the scope of his employment;
or, if the work is not prepared by Employee within the scope of his employment, but is specially
ordered by Employer or any of its subsidiaries or affiliates as a contribution to a collective
work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary
work, as a compilation, or as an instructional text, then the work shall be considered to be work
made for hire and Employer or any of its subsidiaries or affiliates shall be the author of the
work. If such work is neither prepared by Employee within the scope of his employment, nor a work
specially ordered that is deemed to be a work made for hire, then Employee hereby agrees to assign,
and by these presents does assign, to Employer all of Employee’s worldwide right, title, and
interest in and to such work and all rights of copyright therein.

5.5. Protection of Proprietary Material. Both during the period of Employee’s
employment by Employer and thereafter, Employee shall assist Employer, or any of its subsidiaries
or affiliates and their nominees, at any time, in the protection of Employer’s or any of its
subsidiaries’ or affiliates’ worldwide right, title, and interest in and to information, ideas,
concepts, improvements, discoveries, and inventions, and its copyrighted works, including without
limitation, the execution of all formal assignment documents requested by Employer or any of its
subsidiaries or affiliates or their nominees and the execution of all lawful oaths and applications
for patents and registration of copyright in the United States and foreign countries.

	6.	 	MISCELLANEOUS

6.1. Definition of “Affiliates” and “Affiliated.” For purposes of this Agreement
the terms “affiliates” or “affiliated” means an entity who directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with Employer.

6.2. Prohibition of Publication of Certain Information. Except as required by law
or process, Employee shall refrain, both during the employment relationship and after the
employment relationship terminates, from publishing any oral or written statements about Employer
or any of its subsidiaries’ or affiliates’ directors, officers, employees, agents or
representatives that are slanderous, libelous, or defamatory; or that disclose private or
confidential information about Employer or any of its subsidiaries’ or affiliates’ business
affairs, officers, employees, agents, or representatives; or that constitute an intrusion into the
seclusion or private lives of Employer or any of its subsidiaries’ or affiliates’ directors,
officers, employees, agents, or representatives; or that give rise to unreasonable publicity about
the private lives of Employer or any of its subsidiaries’ or affiliates’ officers, employees,
agents, or representatives; or that place Employer or its subsidiaries’ or affiliates’ officers,
employees, agents, or representatives in a false light before the public; or that constitute a
misappropriation of the name or likeness of Employer or any of its subsidiaries’ or affiliates’ or
its officers, employees, agents, or representatives. Except as required by law or process, the
Employer shall refrain, and shall use its best efforts to assure that its directors, officers,
employees, agents and representatives, and its subsidiaries and affiliates and their directors,
officers, employees, agents and representatives, shall refrain, both during the employment
relationship and after the employment relationship terminates, from publishing any untrue oral or
written statements about the Employee that are slanderous, libelous, or defamatory; or that
disclose private or confidential information about the Employee; or that constitute an intrusion
into the seclusion or private life of the Employee; or that give rise to unreasonable publicity
about the private life of the Employee; or that place the Employee in a false light before the
public.

6.3. Notice. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

If to Employer to:

Group 1 Automotive, Inc.

800 Gessner, Suite 500

Houston, TX 77024

Attn: Chairman of the Board

With a copy to:

	 	 	 
	Fisher & Phillips LLP

	333 Clay Street

	Suite 4000

	 	

	Houston, Texas 77002

	Attn:

	 	Steve Roppolo

	 	 	 
	Group 1 Automotive, Inc.

	800 Gessner, Suite 500

	Houston, TX 77024

	Attn:

	 	General Counsel

	 	 	 
	Group 1 Automotive, Inc.

	800 Gessner, Suite 500

	Houston, TX 77024

	Attn:

	 	Chairman of Compensation Committee

If to Employee:

Earl J. Hesterberg

At the address specified in the Company’s personnel records

With a copy to:

	 	 	 
	Akin Gump Strauss Hauer & Feld LLP

	1111 Louisiana Street

	44th Floor

Houston, TX 77002

Attn:

	 	

Christine LaFollette

Either Employer or Employee may furnish a change of address to the other in writing in accordance
herewith, except that notices of changes of address shall be effective only upon receipt.

6.4. Governing Law. This Agreement shall be governed in all respects by the law of
the State of Texas, excluding any conflict-of-law rule or principle that might refer the
construction of the Agreement to the laws of another State or country.

6.5. No Waiver. No failure by either party hereto at anytime to give notice of any
breach by the other party of, or to require compliance with, any condition or provision of this
Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.

6.6. Severability. It is a desire and intent of the parties that the terms,
provisions, covenants, and remedies contained in this Agreement shall be enforceable to the fullest
extent permitted by law. If any such term, provision, covenant, or remedy of this Agreement or the
application thereof to any person, association, or entity or circumstances shall, to any extent, be
construed to be invalid or unenforceable in whole or in part, then such term, provision, covenant,
or remedy shall be construed in a manner so as to permit its enforceability under the applicable
law to the fullest extent permitted by law. In any case, the remaining provisions of this
Agreement or the application thereof to any person, association, or entity or circumstances other
than those to which they have been held invalid or unenforceable, shall remain in full force and
effect.

6.7. Arbitration. The Parties agree that any claim, dispute, and/or controversy
that they may have arising from, related to, or having any relationship or connection whatsoever
with this Agreement, Employee’s employment, or other association with the Company, shall be
submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act.
In addition to any other requirements imposed by law, the arbitrator selected shall be a retired
Judge, or otherwise qualified individual to whom the parties mutually agree, and shall be subject
to disqualification on the same grounds as would apply to a Judge. The arbitrator shall apply the
Federal Rules of Civil Procedure and Evidence, including all rules of pleading, discovery, evidence
and all rights to resolution of the dispute by means of motions for summary judgment and judgment
on the pleadings. Resolution of the dispute shall be based solely upon the law governing the
claims and defenses pleaded, and the arbitrator may not invoke any basis (including but not limited
to, notions of “just cause”) other than such controlling law. This Agreement shall not prevent the
Parties from obtaining provisional remedies in court to the extent permitted by Texas law (either
before the commencement of or during the arbitration process), pending final resolution of the
dispute pursuant to this Agreement. The arbitrator shall have the immunity of a judicial officer
from civil liability when acting in the capacity of an arbitrator, which immunity supplements any
other existing immunity. Likewise, all communications during or in connection with the arbitration
proceedings are privileged. Awards shall include the arbitrator’s written reasoned opinion.

6.8. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of Employer, its subsidiaries and affiliates and any other person, association, or entity
which may hereafter acquire or succeed to all or a portion of the business or assets of Employer by
any means whether direct or indirect, by purchase, merger, consolidation, or otherwise. Employee’s
rights and obligations under this Agreement are personal and such rights, benefits, and obligations
of Employee shall not be voluntarily or involuntarily assigned, alienated, or transferred, whether
by operation of law or otherwise, by Employee without the prior written consent of Employer.
Notwithstanding anything to the contrary in this Section 6.8 or elsewhere in the Agreement, in the
event of the Employee’s death after becoming entitled to receipt of any payment or benefit, but
before receiving all such payments or benefits, the remaining payments shall be made to the
Employee’s survivors or estate and the remaining benefits shall be provided to his widow or other
survivors to the same extent and in the same manner as if he were still alive.

6.9. Entire Agreement. Except as provided in (1) written company policies
promulgated by Employer dealing with issues such as securities trading, business ethics,
governmental affairs and political contributions, consulting fees, commissions and other payments,
compliance with law, investments and outside business interests as officers and employees,
reporting responsibilities, administrative compliance, and the like, (2) the written benefits,
plans, and programs referenced in Section 2.3, (3) any signed written agreements contemporaneously
or hereafter executed by Employer and Employee, (4) the Non-Compete Agreement or (5) any award
agreements under Employer’s 1996 Stock Incentive Plan, 2007 Long Term Incentive Plan, or 2014 Long
Term Incentive Plan entered into by Employer and Employee prior to the Effective Date, this
Agreement constitutes the entire agreement of the parties with regard to such subject matters, and
contains all of the covenants, promises, representations, warranties, and agreements between the
parties with respect to such subject matters and replaces and merges previous agreements and
discussions pertaining to the employment relationship between Employer and Employee, including,
without limitation, the Prior Employment Agreement.

6.10. Headings. The headings contained in this Agreement are for reference only and
shall not affect the meaning or interpretation of any provision of this Agreement.

6.11. Amendment. No amendments or additions to this Agreement shall be binding
unless in writing and signed by both parties hereto.

6.12. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but both of which together will constitute one and the same
instrument

IN WITNESS WHEREOF, Employer and Employee have duly executed this Agreement in multiple
originals to be effective on the date first stated above.

DATE:       May 19, 2015       GROUP 1 AUTOMOTIVE, INC.

By: /s/ Max P. Watson, Jr.      

Name: Max P. Watson, Jr.

Title: Chairman, Compensation Committee

DATE:       May 19, 2015       /s/ Earl J. Hesterberg     

EARL J. HESTERBERG

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