Common use of CONDITIONAL REDUCTION Clause in Contracts

CONDITIONAL REDUCTION. (a) Notwithstanding anything in Section 4 to the contrary, in the event that it shall be determined (as hereafter provided), but for the application of this Section 5, that any payment or distribution by the Company to or for Executive’s benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, performance share, performance unit, restricted stock, stock appreciation right or similar right, or the lapse or termination of any restriction on, or the vesting or exercisability of, any of the foregoing (individually and collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended from time to time (“Code”), or any successor provision thereto, by reason of being considered “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto), or to any similar tax imposed by state or local law, or to any interest or penalties with respect to such taxes (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then: (i) if the difference of (x) the amount of the Payment, less (y) the amount of the Excise Tax, if any, imposed upon the Payment (such net amount referred to herein as “After-Tax Payment Amount”) would be greater by reducing the amount of the lump-sum severance payment otherwise payable to Executive to the minimum extent necessary (but in no event to less than zero) so that no portion of the Payment, after such reduction, constitutes an Excess Parachute Payment (as defined in Section 280G(b) of the Code, or any successor provision thereto), then the lump-sum severance payment shall be so reduced (the amount of such reduction shall be referred to as the “Excess Amount”); and (ii) If the After-Tax Payment Amount would be greater without the reduction referred to in Subsection 5(a)(i) above, then there shall be no reduction in the lump-sum severance payment by application of this Section 5. (b) All determinations required to be made under this Section 5, including the After-Tax Payment Amount, whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a reduction in the amount of the lump-sum severance payment is to be made and the amount of such reduction, if any, shall be made (i) by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ (or its successor) (the “Accounting Firm”), regardless of any services that the Accounting Firm has performed or may be performing for the Company, or (ii) if ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ (or its successor) is serving as accountant or auditor for the individual, entity or group effecting a Change in Control, or cannot (because of limitations under applicable law or otherwise) make the determinations required to be made under this Section 5, then by another recognized accounting firm selected by Executive and reasonably acceptable to the Company (which accounting firm shall then be the “Accounting Firm” hereunder). The Company, or Executive if he selects the Accounting Firm, shall direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 30 calendar days after Executive’s termination of employment, if applicable, and any such other time or times as may be requested by the Company or Executive. Any determination by the Accounting Firm as to whether any reduction in the amount of the lump-sum severance payment is required pursuant to this Section 5 shall be binding upon Executive and the Company. The federal, state and local income or other tax returns filed by Executive and the Company shall be prepared and filed on a basis consistent with such determinations and calculations. The Company shall pay the lump-sum severance payment, as reduced or not reduced pursuant to the final determination of the Accounting Firm, to you no later than the later of (x) the time otherwise required hereunder or (y) five business days after receipt of such determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall, at the same time as it makes such determination, furnish the Company and Executive an opinion that Executive have substantial authority not to report any Excise Tax on Executive’s federal, state or local income or other tax return. (c) As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that pursuant to a final determination of a court or an Internal Revenue Service proceeding which has been finally and conclusively resolved, that an Excess Parachute Payment was received by Executive which would have been intended to be reduced by the Excess Amount pursuant to Subsection 5(a)(i) above, then the Excess Amount shall be deemed an overpayment and Executive shall repay the Excess Amount to the Company on demand (but no less than ten days after Executive receives written demand). (d) The Company and Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by Subsection 5(b). Any determination by the Accounting Firm as to the calculation or amount of any payment or reduction shall be binding upon the Company and Executive. (e) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Subsection 5(b) shall be borne by the Company.