Common use of Excise Tax Indemnification Clause in Contracts

Excise Tax Indemnification. (a) This section 11 shall apply if the Officer’s employment is terminated in circumstances giving rise to liability for excise taxes under section 4999 of the Code. If this Section 11 applies, then, if for any taxable year, the Officer shall be liable for the payment of an excise tax under section 4999 of the Code with respect to any payment in the nature of compensation made by the Company or any direct or indirect subsidiary or affiliate of the Holding Company to (or for the benefit of) the Officer, the Holding Company shall pay to the Officer an amount equal to X deter­mined under the following formula: X = E x P where E = the rate at which the excise tax is assessed under section 4999 of the Code; P = the amount with respect to which such excise tax is assessed, determined without regard to this section 11; FI = the highest marginal rate of income tax applicable to the Officer under the Code for the taxable year in question; SLI = the sum of the highest marginal rates of income tax applicable to the Officer under all appli­cable state and local laws for the taxable year in ques­tion; and M = the highest marginal rate of Medicare tax applicable to the Officer under the Code for the taxable year in question. With respect to any payment in the nature of compensation that is made to (or for the benefit of) the Officer under the terms of this Agree­ment, or otherwise, and on which an excise tax under sec­tion 4999 of the Code will be assessed, the payment determined under this section 11(a) shall be made to the Officer on the earlier of (i) the date the Holding Company or any direct or indirect subsidiary or affiliate of the Holding Company is required to withhold such tax, or (ii) the date the tax is required to be paid by the Officer.