Common use of Equity-Based Compensation Deductions Clause in Contracts

Equity-Based Compensation Deductions. The Parties agree that, to the extent permitted by law, tax deductions for equity-based compensation described in Sections 5.1, 5.2, and 5.3 shall be allocated to and claimed by the entity or entities that employed the individual receiving the compensation during the relevant vesting period based on the number of months of such individual’s employment with such entity or entities. Tax withholding and reporting obligations will be the responsibility of the entity claiming the deduction. To the extent deductions cannot be claimed in this manner or are disallowed or adjusted on audit, the entity that receives the tax benefit shall reimburse the entity that would have received such tax benefit pursuant to the preceding sentence as and when realized. To the extent such reimbursement is treated as taxable income, the reimbursing party shall gross-up the reimbursement amount for taxes.

Equity-Based Compensation Deductions. The Parties agree that, to the extent permitted by law, tax deductions for equity-based compensation described in Sections 5.1Section 5.1, 5.2, and 5.3 shall be allocated to and claimed by the entity or entities that employed the individual receiving the compensation during the relevant vesting period based on the number of months of such individual’s employment with such entity or entities. Tax withholding and reporting obligations will be the responsibility of the entity claiming the deduction. To the extent deductions cannot be claimed in this manner or are disallowed or adjusted on audit, the entity that receives the tax benefit shall reimburse the entity that would have received such tax benefit pursuant to the preceding sentence as and when realized. To the extent such reimbursement is treated as taxable income, the reimbursing party shall gross-up the reimbursement amount for taxes.