Document:

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                                                                    Exhibit 10.4

                           SPANISH BROADCASTING SYSTEM
                             1999 STOCK OPTION PLAN
                            FOR NONEMPLOYEE DIRECTORS

     1. PURPOSE.

         The purpose of the Plan is to promote the interests of Spanish
Broadcasting System, Inc. (the "Company") and its shareholders by increasing the
proprietary and personal interest of nonemployee members of the Board in the
growth and continued success of the Company by granting them Options to purchase
shares of the Company's stock.

     2. DEFINITIONS.

         Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.

         "Board" shall mean the Board of Directors of the Company.

         "Change in Control" shall mean the occurrence of any of the following:

         (a) any "person" as such term is defined in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company or any Subsidiary or any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any Subsidiary), becomes the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company's then outstanding securities;

         (b) during any two consecutive years, individuals who at the beginning
of such period constitute the Board, and any new director (whose election by the
Board or nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved), cease for any reason to
constitute at least a majority of the Board;

         (c) the stockholders of the Company approve a merger or consolidation
of the Company with any other company other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than eighty percent (80%) of the combined voting power of the
voting securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities; or

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         (d) the stockholders of the Company adopt a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

         "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

         "Company" shall mean Spanish Broadcasting System, Inc., a Delaware
corporation, and any successor corporation.

         "Disability" shall mean the inability, by reason of bodily injury or
physical or mental disease, or any combination thereof, of the Optionee to
perform his duties as a member of the Board for a period of one hundred eighty
(180) days (whether or not consecutive) in any period of three hundred and
sixty-five (365) consecutive days.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         "Fair Market Value" per Share as of a particular date shall mean,
unless otherwise determined by the Board:

         (i) the closing sales price per Share on a national securities exchange
on the most recent date on which there was a sale of Shares on such exchange;

         (ii) if clause (i) does not apply and the Shares are quoted on the
National Association of Securities Dealers Automated Quotation system
("NASDAQ"), either (a) the closing price per Share as reported on NASDAQ for the
date of grant, provided, a sale was reported on such day or (b) if the date of
grant is a holiday, Saturday or Sunday, the closing price per share as reported
on NASDAQ on the preceding day to the date of grant on which a sale was
reported;

         (iii) if clause (i) or (ii) does not apply and the Shares are then
traded on an over-the-counter market, the closing price for the Shares in such
over-the-counter market for the business day preceding the exercise date; or

         (iv) if the Shares are not then listed on a national securities
exchange or traded in an over-the-counter market, such value as the Board in its
discretion may determine.

         "Nonemployee Director" shall mean a member of the Board who is not an
employee of the Company.

         "Option" shall mean an option to purchase Shares granted pursuant to
the Plan. Options granted under the Plan are not"incentive stock options" within
the meaning of Section 422 of the Code.

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         "Option Agreement" shall mean an Option Agreement, substantially in the
form attached hereto as Exhibit A, to be entered into between the Company and an
Optionee, which shall set forth the terms and conditions of the Options granted
to such Optionee.

         "Participant" shall mean a Nonemployee Director who is granted an
Option under the Plan.

         "Plan" shall mean this Spanish Broadcasting System 1999 Stock Option
Plan for Nonemployee Directors, as hereinafter amended from time to time.

         "Share" shall mean a share of the Company's common stock, $.0001 par
value.

      3. SHARES SUBJECT TO THE PLAN.

         (a) Shares Subject to the Plan. Subject to adjustment as set forth in
Section 3(b), the maximum number of Shares that may be issued or transferred
pursuant to Options under this Plan shall be 300,000 which may be authorized but
unissued Shares or Shares held in the Company's treasury, or a combination
thereof. Any Shares subject to an Option that cease to be subject thereto may
again be the subject of Options hereunder.

         (b) Changes in Company's Shares. In the event the Board determines that
any stock dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Shares, or other similar
corporate event, affects the value of the Shares such that an adjustment is
required in order to preserve the benefits or potential benefits intended to be
made available under this Plan, the Board shall have the right, in its sole
discretion, and in such manner as it may deem equitable, to adjust any or all of
(a) the number and kind of Shares subject to outstanding Options, and (b) the
exercise price with respect to any Option or (c) make provision for a cash
payment to an Optionee or a person who has an outstanding Option (in an amount
equal to the then difference between the exercise price and the Fair Market
Value of a Share).

      4. PARTICIPATION.

         Each Nonemployee Director shall be eligible to participate in the Plan,
provided that the Board shall have the discretion to determine which, if any,
Nonemployee Director shall receive a grant of Options hereunder.

      5. TERMS OF OPTIONS AND SHARES.

         (a) Terms. The Options granted hereunder shall have the following terms
and conditions:

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                  (i) Exercise Price. The exercise price of any Option shall be
one hundred percent (100%) of the Fair Market Value of a Share as of the date
the Option is granted, provided, however, that the Board, in its discretion may
grant Options above or below Fair Market Value.

                  (ii) Term. Subject to the discretion of the Board, the term of
an Option shall be ten years from the date it is granted.

                  (iii) Vesting. Options shall be exercisable in such
installments (which need not be equal) and at such times as the Board may
designate, as embodied in the Option Agreement covering such Option, provided,
however, that any Options granted hereunder as of the Effective Date shall vest
and become exercisable at a rate of twenty percent (20%) immediately and an
additional twenty percent (20%) each year, beginning on the first anniversary of
the date of grant, and each anniversary thereof, provided that the Optionee is
still a member of the Board on each such vesting date. In addition, any Option
granted an individual who is elected to the Board as a Nonemployee Director
during calendar year 2000 or thereafter shall vest and become exercisable at a
rate of twenty percent (20%) per year, beginning on the date of grant and an
additional twenty percent (20%) on the first anniversary of the date of grant
and each anniversary thereafter, provided that the Optionee is still a member of
the Board on each such date. Notwithstanding the foregoing, any Options that are
not exercisable prior to a Change in Control shall become exercisable on the
date of such Change in Control and shall remain exercisable for the remainder of
their Term.

                  (iv) Number. The Board shall have the discretion to determine
the number of options to be granted any Nonemployee Director, and to determine
the terms and conditions of any such grant, all as embodied in the Option
Agreement covering such Option.

         (b) Termination of Service. An Optionee who ceases to be a member of
the Board for any reason other than death, retirement on or after age 65, or
Disability shall have thirty (30) days from the date of such cessation to
exercise any then exercisable Options, after which all such Options shall
terminate and be of no further force or effect. If an Optionee ceases to be a
member of the Board due to death, retirement on or after age 65, or Disability,
all outstanding Options held by such Optionee that are exercisable on such date
shall remain exercisable for their Term, and shall thereafter terminate and be
of no further force or effect.

         (c) Option Agreement. Options shall be granted only pursuant to a
written Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Board shall determine, consistent with the Plan.

         (d) Non-Transferability. No Option granted hereunder the Plan shall be
transferable by the Optionee to whom granted otherwise than by will or the laws
of descent and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or his guardian or legal representative.
The terms of such Option shall be binding upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.

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         (e) Method of Exercise. The exercise of an Option shall be made only by
delivery of a written notice (in person or by first class mail to the Secretary
of the Company at the Company's principal executive office) specifying the
number of Shares to be purchased and accompanied by full payment therefor and
otherwise in accordance with the Option Agreement pursuant to which the Option
was granted. The exercise price for any Shares purchased pursuant to the
exercise of an Option shall be paid in full upon such exercise in cash, by check
or, at the discretion of the Board and upon such terms and conditions as the
Board shall approve, by transferring previously owned Shares to the Company,
having Shares withheld, or pursuant to a "cashless exercise" procedure, or any
combination thereof. Any Shares transferred to the Company as payment of the
exercise price shall be valued at their Fair Market Value on the day preceding
the date of exercise of such Option. If requested by the Board, the Optionee
shall deliver the Option Agreement evidencing the Option to the Secretary of the
Company who shall endorse thereon a notation of such exercise and return such
Option Agreement to the Optionee. Not less than one hundred (100) Shares may be
purchased at any time upon the exercise of an Option unless the number of Shares
so purchased constitutes the total number of Shares then purchasable under the
Option or the Board determines otherwise in its sole discretion.

         (f) Rights as Stockholder. No Optionee shall be deemed for any purpose
to be or to have the rights and privileges of the owner of any Shares subject to
any Option unless and until (a) the Option shall have been exercised pursuant to
the terms thereof, and (b) the Company shall have issued the Shares to the
Optionee.

      6. ADMINISTRATION.

         The Plan shall be administered by the Board. Subject to the provisions
of the Plan, the Board shall be authorized to interpret and construe the Plan
and the Option Agreements, to establish, amend, and rescind any rules and
regulations relating to the Plan, and to make all other determinations necessary
or advisable for the administration of the Plan and to carry out its purpose.
The determinations of the Board in the administration of the Plan, as described
herein, shall be final and conclusive. The Secretary shall be authorized to
implement the Plan in accordance with its terms and to take such actions of a
ministerial nature as shall be necessary to effectuate the intent and purposes
thereof. The Board may, in its sole and absolute discretion, delegate to any
proper officer of the Company, or more than one of them, any or all of its
administrative duties under this Plan.

      7. OTHER PROVISIONS.

         (a) Effective Date. The Plan has been approved by the Board and by the
Company's stockholders, and shall become effective as of the date the Board
approved such Plan, (the "Effective Date"). The Plan shall continue in effect
until ten years after the date it was approved by the Company's stockholders.

         (b) Amendment, Suspension or Termination of the Plan. The Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to

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time by the Board; provided, however, that, except as provided in Section 3(b),
no amendment, suspension nor termination shall, without the consent of the
Optionee, alter or impair any rights or obligations under any Option theretofore
granted.

         (c) Governing Law. The Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of New York without giving effect to the choice of law principles thereof.

         (d) Regulations and Other Approvals. (i) The obligation of the Company
to sell or deliver Shares with respect to Options granted under the Plan shall
be subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by
the Board.

                  (ii) The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority.

                  (iii) Each Option is subject to the requirement that, if at
any time the Board determines, in its sole discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
the issuance of Shares, no Options shall be granted or payment made or Shares
issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions as
acceptable to the Board.

                  (iv) In the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act, and is not otherwise exempt from such registration,
such Shares shall be restricted against transfer to the extent required by the
Securities Act or regulations thereunder, and the Board may require any
individual receiving Shares pursuant to the Plan, as a condition precedent to
receipt of such Shares, to represent to the Company in writing that the Shares
acquired by such individual are acquired for investment only and not with a view
to distribution. The certificate for such shall include any legend that the
Board deems appropriate to reflect any restrictions on transfer.

         (e) Withholding of Taxes. As a condition to the exercise of an Option
and to the extent required by law, no later than the date as of which an amount
first becomes includible in the gross income of an Optionee for federal income
tax purposes with respect to Options granted under this Agreement, the Optionee
shall pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, estate, or local taxes of any kind
required by law to be withheld with respect to such amount. The obligations of
the Company under this Agreement shall be conditioned on such payment or
arrangements, and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
employee. In its discretion, the Board may permit an Optionee to satisfy
withholding obligations by delivering previously owned Shares or by having
Shares withheld.

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         (f) Titles; Construction. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan. The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, when the context so indicates.

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                                   EXHIBIT A

                            FORM OF OPTION AGREEMENT

[SBS LOGO]

Date:
     -------------------

(Optionee's Name)
------------------------
(Address)
------------------------
(Address)
------------------------

Dear (Optionee's Name) :
     -------------------

Pursuant to the terms and conditions of the Spanish Broadcasting System, Inc.
1999 Stock Option Plan for NonEmployee Directors (the "Plan"), you have been
granted a Nonqualified Stock Option to purchase ________ shares (the "Option")
of Class A common stock as outlined below.

<TABLE>
<S>                            <C>
            Granted To:        ________________________

            Grant Date:        ________________________

       Options Granted:        ________________________

Option Price per Share:        ________________________  Total Cost to Exercise: $________

       Expiration Date:        _________ _________ _______, unless terminated earlier.

      Vesting Schedule:        ___% immediately, ___ % each year as follows:

                               ____________________________________________

                               ____________________________________________

       Transferability:        Not transferable except in accordance with the Plan.

                                       Spanish Broadcasting System, Inc.

                                       By:_________________________________
</TABLE>

By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and conditions
of the Plan. I further acknowledge receipt of a copy of the Plan and agree to
conform to all of the terms and conditions of the Option and the Plan.

Signature:_____________________________________     Date:_______________________
                  (Name of Optionee)

                                     EX-A-1<PAGE>
                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is entered into as of July
24, 2002 by and between AutoNation, Inc. (together with its subsidiaries and
affiliates, the "Company"), and Michael J. Jackson (the "Executive"), an
individual resident of the State of Florida.

                                    RECITALS

         WHEREAS, the Executive currently serves as the Chief Executive Officer
of the Company pursuant to an Employment Agreement dated as of September 22,
1999 (the "Initial Employment Agreement"), which is scheduled to expire by its
terms on September 24, 2002; and

         WHEREAS, the Company and the Executive desire to replace and supersede
the Initial Employment Agreement with this Agreement, effective as of the date
hereof, and desire to set forth herein the terms and conditions of the
Executive's employment with the Company following termination of the Initial
Employment Agreement, as well as certain non-competition covenants applicable to
the Executive.

                               TERMS OF AGREEMENT

         In consideration of the mutual representations, warranties, covenants
and agreements contained in this Agreement, the parties hereto agree as follows:

         1. EMPLOYMENT.

                  (a) EMPLOYMENT PERIOD. The Executive shall serve as Chief
         Executive Officer of the Company. The period during which the Executive
         shall serve as Chief Executive Officer of the Company (the "Employment
         Period") pursuant to the terms of this Agreement shall commence on the
         date hereof and shall continue until the close of business on September
         24, 2005, unless earlier terminated pursuant to PARAGRAPH 2 of this
         Agreement. The parties hereto agree that the Initial Employment
         Agreement shall terminate and be of no further force and effect as of
         the execution and delivery of this Agreement.

                  (b) DUTIES AND RESPONSIBILITIES. During the Employment Period,
         the Executive shall have such authority and responsibility and perform
         such duties as are customary to the office the Executive holds or as
         may be assigned to him from time to time at the direction of the
         Company's Board of Directors or Chairman of the Board. During the
         Employment Period, the Executive's employment shall be full time and
         the Executive shall perform his duties honestly, diligently,
         competently, in good faith and in what he believes to be the best
         interests of the Company and shall use his best efforts to promote the
         interests of the Company.

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                  (c) BASE SALARY. In consideration for the Executive's services
         hereunder and the restrictive covenants contained herein, the Executive
         shall be paid a base salary during calendar year 2002 at an annual rate
         of $1,150,000 (the "Salary"). The Salary will be payable in accordance
         with the Company's customary payroll practices and will be subject to
         annual review and adjustment by the Compensation and Nominating
         Committee (the "Committee") of the Company's Board of Directors;
         PROVIDED, HOWEVER, that the Salary shall not be reduced during the
         Employment Period.

                  (d) BONUS. During the Employment Period, the Executive shall
         participate in the Company's Senior Executive Incentive Bonus Plan (the
         "Plan"), or any successor or substitute to the Plan, at such target
         award levels and upon such terms and conditions as are determined in
         the discretion of the Committee; PROVIDED, HOWEVER, that the target
         award level for annual incentive bonuses under the Plan, or any
         successor or substitute to the Plan, will be no less than the existing
         target award level of 133 1/3% of the Executive's Salary at such time.
         A portion of the Executive's annual bonus will be deferred in
         accordance with the existing 3-year deferred bonus program for the
         Executive adopted by the Committee in 2001. Upon expiration of the
         3-year deferred bonus program at the end of 2003, a new 3-year deferred
         bonus program similar to the current program will be established for
         the Executive.

                  (e) BENEFITS. During the Employment Period, the Executive
         shall be entitled to (i) participate in any retirement plans, insurance
         programs and other fringe benefit plans and programs as are from time
         to time established and maintained for the benefit of executives of the
         Company, subject to the provisions of such plans and programs, (ii)
         participate in the CEO/President Car Policy and the Director Car
         Program (or successor programs) pursuant to which the Executive is
         entitled to the use of two vehicles selected by the Executive, and
         (iii) use of the Company's corporate aircraft for personal travel for
         up to 100 hours per year (PROVIDED that the cost of such travel will be
         included in the Executive's annual income subject to tax).

                  (f) EXPENSES. In addition to the compensation and benefits
         described above, the Executive shall be reimbursed for all
         out-of-pocket expenses reasonably incurred by him on behalf of or in
         connection with the business of the Company during the Employment
         Period, upon delivery of receipts and pursuant to the reimbursement
         standards and guidelines of the Company.

                  (g) STOCK OPTIONS. The Executive shall be entitled to
         participate in any annual stock option grants during the Employment
         Period (or other broad-based stock option grants that include senior
         executives of the Company) at an appropriate level as determined by the
         Committee.

         2. TERMINATION.

                  (a) CAUSE, DEATH AND DISABILITY. At any time during the
         Employment Period, the Company shall have the right to terminate the
         Employment Period and to discharge the Executive for "Cause"

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         (as defined below). Upon any such termination by the Company for Cause,
         the Executive or his legal representatives shall be entitled to that
         portion of the Salary prorated through the date of termination, and the
         Company shall have no further obligations hereunder. Termination for
         Cause shall mean termination because of: (i) the Executive's breach of
         his covenants contained in this Agreement; (ii) the Executive's failure
         or refusal to perform the duties and responsibilities required to be
         performed by the Executive under the terms of this Agreement; (iii) the
         Executive willfully engaging in illegal conduct or gross misconduct in
         the performance of his duties hereunder (PROVIDED, that no act or
         failure to act shall be deemed "willful" if done, or omitted to be
         done, in good faith and with the reasonable belief that such action or
         omission was in the best interests of the Company); (iv) the
         Executive's commission of an act of fraud or dishonesty affecting the
         Company or the commission of an act constituting a felony; or (v)
         Executive's violation of Company policies in any material respect. The
         Company acknowledges that the Executive may resign or otherwise
         terminate the Employment Period and his employment with the Company
         without Good Reason (as defined below), PROVIDED that (a) the Company
         shall have no further obligations hereunder from and after the end of
         the Employment Period in such event and (b) Executive shall provide
         reasonable written notice to the Company (in no event less than twenty
         (20) business days) of such resignation or termination, shall provide a
         reasonable transition of his duties and responsibilities with the
         Company and shall coordinate with the Company as to the public
         communication of the resignation or termination in order to ensure an
         orderly transition.

         In addition, in the event that during the Employment Period the
         Executive (i) dies, the Employment Period shall automatically
         terminate, or (ii) is unable to perform his duties and responsibilities
         as provided herein due to his physical or mental disability or sickness
         (a) for more than ninety (90) days (whether or not consecutive) during
         any period of twelve (12) consecutive months or (b) reasonably expected
         to extend for greater than three (3) months, the Company may at its
         election terminate the Employment Period and Executive's employment. In
         the case of CLAUSE (I) or CLAUSE (II) above, the Company shall have no
         further obligations hereunder from and after such termination date and
         the Executive's rights with respect to any employee stock options held
         by him shall be as set forth in the applicable stock option plan.

                  (b) WITHOUT CAUSE BY THE COMPANY OR BY EXECUTIVE FOR GOOD
         REASON. At any time during the Employment Period, the Company shall
         have the right to terminate the Employment Period and to discharge the
         Executive without Cause effective upon delivery of written notice to
         the Executive. At any time during the Employment Period, the Executive
         shall have the right to terminate the Employment Period for Good Reason
         if, after delivery of written notice to the Company, the Company has
         not cured the circumstances constituting "Good Reason" within ten (10)
         business days. Upon such termination of the Employment Period by the
         Company without Cause or by the Executive for Good Reason, as long as
         the Executive is in compliance with the provisions of Paragraphs 3 and
         4 below and the Executive executes a reasonable and mutually acceptable
         severance agreement with the Company that includes a release of the

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         Company and a covenant of reasonable cooperation on matters Executive
         is involved with pertaining to the Company (a "Severance Agreement"),
         the Executive will be entitled to an amount equal to (i) twice the sum
         of the Executive's then-current Salary plus annual bonus awarded to the
         Executive in the calendar year prior to such termination of the
         Executive's employment PLUS (ii) the PRO RATA portion (based on the
         portion of the calendar year actually served by the Executive) of the
         annual bonus to which the Executive would have been entitled had the
         Executive not been terminated, to the extent applicable performance
         targets are met. Payment of the amount due under CLAUSE (I) above will
         be made by the Company within thirty (30) days following termination of
         the Executive. Payment of the amount due under CLAUSE (II) above will
         be made by the Company at the same time as annual bonuses are paid to
         the Company's bonus-eligible employees for the year in which the
         Executive is terminated.

         In addition, upon such termination of the Employment Period by the
         Company without Cause or by the Executive for Good Reason, as long as
         the Executive is in compliance with the provisions of Paragraphs 3 and
         4 below and the Executive executes a Severance Agreement: (1) the
         Executive and his dependents will be entitled to continue to
         participate in the Company's group health and welfare benefit plans (as
         such plans are in effect at such time) for a period of 18 months
         following such termination at the same cost to the Executive as such
         benefits were provided prior to such termination (or the Company will
         procure and pay for comparable benefits during such time period); (2)
         all vested employee stock options held by the Executive as of such
         termination will survive and be exercisable for the remainder of their
         initial 10-year term (at which time such stock options, if not
         exercised, will terminate and be void); and (3) all unvested employee
         stock options held by the Executive will immediately vest on such
         termination and will survive and be exercisable for one year following
         such termination (at which time such stock options, if not exercised,
         will terminate and be void). At all times during the Employment Period,
         the foregoing provisions of this paragraph shall govern in the event of
         any conflict between such provisions and the provisions of any stock
         option agreement to which the Executive is a party or the provisions of
         any stock option plan pursuant to which the Executive's employee stock
         options were granted.

                  "Good Reason" shall mean the occurrence of any of the
         following: (i) a material change by the Company in the Executive's
         duties or responsibilities which would cause Executive's position with
         the Company to become of materially and substantially less
         responsibility and importance than those associated with his duties or
         responsibilities as of the date hereof; or (ii) a material breach of
         this Agreement by the Company, which breach is not cured within ten
         (10) days after written notice thereof is received by the Company.

                  (c) Upon termination of the Employment Period hereunder, at
         the Company's request the Executive shall resign from the Company's
         Board of Directors.

         3. RESTRICTIVE COVENANTS. The Executive hereby acknowledges that the
         Company is as of the date hereof engaged primarily in the sale,
         leasing, financing and servicing of new and used vehicles, as well as
         the

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         provision of related services and products, such as the sale of parts
         and accessories, extended service contracts, aftermarket automotive
         products and collision repair services (the "Auto Business"). The
         Executive further acknowledges that: (i) the Company may engage in
         additional related businesses or in separate and distinct businesses
         from time to time, (ii) the Company currently engages in its businesses
         by means of traditional retail establishments, the Internet and
         otherwise and the Company may in the future engage in its businesses by
         alternative means, and (iii) the Executive's position with the Company
         is such that he will be privy to specific trade secrets, confidential
         information, confidential business lists, confidential records,
         customer goodwill, specialized training and employees, any or all of
         which have great and competitive value to the Company.

                  The Executive hereby agrees that, for a period of one (1) year
         following the termination of the Executive's employment with the
         Company (by the Company or the Executive for any reason), the Executive
         shall not, directly or indirectly, anywhere in the United States (or in
         any other geographic area outside the United States where the Company
         conducts business at any time during Executive's employment with the
         Company):

                  (a) participate or engage in or own an interest in, directly
         or indirectly, any individual proprietorship, partnership, corporation,
         joint venture, trust or other form of business entity, whether as an
         individual proprietor, partner, joint venturer, officer, director,
         member, employee, consultant, independent contractor, stockholder,
         lender, landlord, finder, agent, broker, trustee, or in any manner
         whatsoever (except for an ownership interest not exceeding 1% of a
         publicly-traded entity), if such entity or its affiliates is engaged,
         directly or indirectly, in the Auto Business or any other business of
         the type and character engaged in or competitive with any business
         conducted by the Company at any time during the Executive's employment
         by the Company on or after the date hereof;

                  (b) employ, or knowingly permit any company or business
         directly or indirectly controlled by him to employ, any person who was
         employed by the Company or any subsidiary or affiliate of the Company
         at or within the prior six (6) months, or in any manner seek to induce
         any such person to leave his or her employment (including, without
         limitation, for or on behalf of a subsequent employer of the
         Executive);

                  (c) solicit any customers to patronize any business directly
         or indirectly in competition with the businesses conducted by the
         Company or any subsidiary or affiliate of the Company at any time
         during the Executive's relationship with the Company; or

                  (d) request or advise any Person who is a customer or vendor
         of the Company or any subsidiary or affiliate of the Company or its
         successors to withdraw, curtail or cancel any such customer's or
         vendor's business with any such entity.

         4. CONFIDENTIALITY. The Executive acknowledges that he, as a material
         inducement to the Company entering into this Agreement, entered into an
         Employee Confidentiality Agreement as of the date hereof, a copy of
         which is attached hereto as Exhibit "A." The Executive hereby also
         agrees that,

                                       5
<PAGE>

         without the prior approval of the Company, he shall not at any time
         during his employment with the Company and for a period of five (5)
         years thereafter: (1) give any interviews or speeches, write any books
         or articles, make any public statements (whether through the press, at
         automobile trade conferences or meetings or through similar media), or
         make any disparaging or negative statements: (x) concerning the Company
         or any of its businesses or reputation or the personal or business
         reputations of its directors, officers, shareholders or employees, (y)
         concerning any matter he has participated in while an employee of the
         Company, or (z) in relation to any matter concerning the Company or any
         of its businesses occurring after the Employment Period; or (2) in any
         way impede, disrupt or interfere with the contracts, agreements,
         understandings, communications or relationships of the Company with any
         third party.

         5. ACKNOWLEDGMENTS OF THE PARTIES. The parties agree and acknowledge
         that the restrictions contained in Paragraphs 3 and 4 are reasonable in
         scope and duration and are necessary to protect the Company. If any
         provision of Paragraphs 3 or 4 as applied to any party or to any
         circumstance is adjudged by a court to be invalid or unenforceable, the
         same shall in no way affect any other circumstances or the validity or
         enforceability of any other provisions of this Agreement. If any such
         provision, or any part thereof, is held to be unenforceable because of
         the duration of such provision or the area covered thereby, the parties
         agree that the court making such determination shall have the power to
         reduce the duration and/or area of such provision and/or to delete
         specific words or phrases and in its reduced form, such provision shall
         then be enforceable and shall be enforced. The Executive agrees and
         acknowledges that the breach of Paragraph 3 or 4 will cause irreparable
         injury to the Company, and upon breach of any provision of such
         Paragraphs, the Company shall be entitled to injunctive relief,
         specific performance or other equitable relief, PROVIDED, HOWEVER, that
         such remedies shall in no way limit any other remedies which the
         Company may have (including, without limitation, the right to seek
         monetary damages).

         6. NOTICES. All notices requests, demands, claims or other
         communications hereunder shall be in writing and shall be deemed given
         if delivered by certified or registered mail (first class postage
         pre-paid), hand delivery, guaranteed overnight delivery or facsimile
         transmission, if such transmission is confirmed by certified or
         registered mail (first class postage pre-paid) or guaranteed overnight
         delivery, to the following addresses and telecopy numbers (or to such
         other addresses or telecopy numbers which such party shall designate in
         writing to the other parties):

         To the Company:

                  AutoNation, Inc.
                  110 S.E. 6th Street, 29th Floor
                  Fort Lauderdale, Florida 33301
                  Attention: Chairman of the Board

                                       6
<PAGE>

         Copy To:

                  AutoNation, Inc.
                  110 S.E. 6th Street, 29th Floor
                  Fort Lauderdale, Florida 33301
                  Attention: General Counsel
                  Telecopy: (954) 769-6340

         To Executive:

                  Michael J. Jackson
                  AutoNation, Inc.
                  110 S.E. 6th Street, 29th Floor
                  Fort Lauderdale, Florida 33301
                  Telecopy: (954) 769-6402

         7. AMENDMENT, WAIVER, REMEDIES. This Agreement may not be modified,
         amended, supplemented, extended, canceled or discharged, except by
         written instrument executed by all parties. No failure to exercise, and
         no delay in exercising, any right, power or privilege hereunder
         preclude the exercise of any other right, power or privilege. No waiver
         of any breach of any provision shall be deemed to be a waiver of any
         preceding or succeeding breach of the same or other provision, nor
         shall any waiver be implied from any course of dealing between the
         parties. No extension of time for performance of any obligations or
         other acts hereunder or under any other agreement shall be deemed to be
         an extension of the time for performance of any other obligations or
         any other acts. The rights and remedies of the parties under this
         Agreement are in addition to all other rights and remedies, at law or
         equity, that they may have against each other.

         8. ASSIGNMENT. This Agreement, and the Executive's rights and
         obligations hereunder, may not be assigned by him. The Company may
         assign its rights, together with its obligations hereunder, to any of
         its affiliates or subsidiaries, or any successor thereto.

         9. SEVERABILITY; SURVIVAL; TERM. In the event that any provision of
         this Agreement is found to be void and unenforceable by a court of
         competent jurisdiction, then such unenforceable provision shall be
         deemed modified so as to be enforceable (or if not subject to
         modification then eliminated herefrom) for the purpose of those
         procedures to the extent necessary to permit the remaining provisions
         to be enforced. The provisions of this Agreement (other than Paragraph
         1 and, except for obligations in Paragraph 2 resulting from a
         termination of the Employment Period, Paragraph 2) will survive the
         termination for any reason of the Employment Period and Executive's
         relationship with the Company. If the Employment Period has not been
         terminated in accordance with Paragraph 2 of this Agreement prior to
         September 24, 2005, (i) the respective obligations of the parties under
         Paragraphs 1 and 2 hereof shall terminate on September 24, 2005, and
         (ii) the provisions of Paragraphs 3-11 under this Agreement shall
         survive.

                                       7
<PAGE>

         10. COUNTERPARTS. This Agreement may be signed in any number of
         counterparts, each of which shall be an original but all of which
         together shall constitute one and the same instrument.

         11. GOVERNING LAW. This Agreement shall be construed in accordance with
         and governed for all purposes by the laws of the State of Florida
         applicable to contracts executed and to be wholly performed within such
         State.

         12. SUCCESSOR AGREEMENT. The Company hereby agrees that, in the event
         that the Company desires to continue the employment relationship with
         the Executive provided herein following the termination of the
         Employment Period hereunder, prior to September 24, 2004 the Company
         shall so notify the Executive so that the Executive and the Company may
         negotiate in good faith with respect to a successor employment
         agreement that would become effective following September 24, 2005
         (PROVIDED, that neither the Company nor the Executive shall be legally
         bound thereby unless and until a definitive successor employment
         agreement is executed and delivered by each of the Company and the
         Executive).

         13. AGENCY. Nothing herein shall imply or shall be deemed to imply an
         agency relationship between the Executive and the Company.

                                     * * * *

                                       8
<PAGE>
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                       AUTONATION, INC., a Delaware
                                       corporation

                                       /s/ H. Wayne Huizenga
                                       ----------------------------------
                                       By:  H. Wayne Huizenga
                                       Its: Chairman of the Board

                                       /s/ MICHAEL J. JACKSON
                                       ----------------------------------
                                       MICHAEL J. JACKSON, individually

                                       9

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