EXHIBIT 10.40
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement ("Amendment") is entered
into between Group 1 Automotive, Inc. having offices at 000 Xxxx Xxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 ("Employer"), and X. X. Xxxxxxxxxxxxx, Xx., an
individual currently residing at 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000
("Employee"), and amends the Employment Agreement entered into between Employer
and Employee dated March 1, 2002 (the "Employment Agreement.").
For and in consideration of the mutual promises, covenants, and
obligations contained herein and in the Employment Agreement, Employer and
Employee agree as follows:
Notwithstanding anything to the contrary in the Employment Agreement,
in the event that any payment, benefit or distribution by Employer to
or for the benefit of Employee, whether paid or payable or distributed
or distributable pursuant to the terms of the Employment Agreement or
otherwise (a "Payment"), 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 with respect to such excise tax (such excise tax,
together with any such interest or penalties, are hereinafter
collectively referred to as the "Excise Tax"), Employer shall pay to
Employee an additional payment (a "Gross-up Payment") in an amount such
that after payment by Employee of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax
imposed on any Gross-up Payment, Employee retains an amount of the
Gross-up Payment equal to the Excise Tax imposed upon the Payments.
Employer and Employee shall make an initial determination as to whether
a Gross-up Payment is required and the amount of any such Gross-up
Payment. Employee shall notify Employer in writing of any claim by the
Internal Revenue Service which, if successful, would require Employer
to make a Gross-up Payment (or a Gross-up Payment in excess of that, if
any, initially determined by Employer and Employee) within five days of
the receipt of such claim. Employer shall notify Employee in writing at
least ten days prior to the due date of any response required with
respect to such claim if it plans to contest the claim. If Employer
decides to contest such claim, then Employee shall cooperate fully with
Employer in such action; provided, however, Employer shall bear and pay
directly or indirectly all costs and expenses (including additional
interest and penalties) incurred in connection with such action and
shall indemnify and hold Employee harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of Employer's action. If, as a
result of Employer's action with respect to a claim, Employee receives
a refund of any amount paid by Employer with respect to such claim,
then Employee shall promptly pay such refund to Employer. If Employer
fails to timely notify Employee whether it will contest such claim or
Employer determines not to contest such claim, then Employer shall
immediately pay to Employee the portion of such claim, if any, which it
has not previously paid to Employee.
IN WITNESS WHEREOF, Employer and Employee have duly executed this
Amendment in multiple originals on May 21, 2003 to be effective as of March 1,
2002.
GROUP 1 AUTOMOTIVE, INC.
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Executive Vice President, Chief Financial Officer
and Treasurer
/s/ X.X. Xxxxxxxxxxxxx, Xx.
X. X. Xxxxxxxxxxxxx, Xx.
Employee
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