Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.
Appears in 8 contracts
Samples: Employment Agreement (TJX Companies Inc /De/), Employment Agreement (TJX Companies Inc /De/), Employment Agreement (TJX Companies Inc /De/)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of Anything in this Exhibit Agreement to the contrary notwithstanding, in the event it shall be made without regard to whether determined that any payment or distribution by the deductibility of such payments (or any other payments or benefits Company to or for the benefit of Executivethe Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (including, without limitation, payments or distributions made pursuant to any deferred compensation or supplemental retirement plan), but determined without regard to any additional payments required under this Section 9) (a “Payment”) would be limited subject to the excise tax imposed by Section 4999 of the Code (or precluded 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 (“Section 280G”) and without regard to whether such payments (or any other payments successor provision thereto), or benefits) would subject any interest or penalties are incurred by the Executive with respect to the federal such excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (such tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”). If any portion of , then the payments or benefits Executive shall be entitled to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive receive an additional amount payment (the a “grossGross-up paymentUp Payment”) in an amount such that after reduction for payment by the Executive of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax with respect imposed upon the Payments, it being understood and agreed, anything in this Agreement to the Excess Parachute Payments; providedcontrary notwithstanding, that in no event shall the Executive be entitled to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of pursuant to this Section C.3, shall be adjusted 9 other than in respect of payments made pursuant to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”6(b). Notwithstanding the foregoing, if Executive shall not be entitled to receive a Gross-Up Payment unless the Internal Revenue Service shall assert an Excise Tax liability after-tax benefit that Executive is higher to receive will be reduced by greater than twenty percent (20%) as a result of the Excise Tax (if any) determined by excise tax. In all events, any payment pursuant to this Section 9 will be made no later than 2-1/2 months following the accounting firm, end of the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityyear in which a Participant’s termination of employment occurs.
Appears in 7 contracts
Samples: Executive Employment Agreement (Hercules Offshore, Inc.), Executive Employment Agreement (Hercules Offshore, Inc.), Executive Employment Agreement (Hercules Offshore, Inc.)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit In the event it shall be made without regard to whether determined that any vesting, payment or distribution of any type by the deductibility Company or any of such payments (its Affiliates or any other payments party in a transaction involving the Company or benefits its Affiliates or a party to the transactions contemplated by the Purchase Agreement or the Xxxxxx Xxxxxx Merger Agreement (as defined in the Purchase Agreement) to or for the benefit of ExecutiveEmployee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Payments”) on or prior to the second anniversary of the Effective Date and that is “contingent” (within the meaning of Treasury Regulation Section 1.280G-1) on the consummation of the transactions contemplated by the Purchase Agreement would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under imposed by Section 4999 of the Code Code, or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”). If , then Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Employee of all taxes (including any portion interest or penalties imposed with respect to such taxes), including any income taxes, employment taxes and Excise Tax, imposed upon the Gross-Up Payment, Employee retains an amount of the payments or benefits Gross-Up Payment equal to or for the benefit of Executive Excise Tax imposed upon the Payments. All determinations required to be made under this Section 11(a) (including, but not limited towithout limitation, payments and benefits under this Agreement but determined without regard to this paragraphwhether any vesting, payment or distribution (i) constitutes an a “excess parachute payment” within the meaning of Section 280G of the Code and (ii) is contingent on the aggregate consummation of such payments being hereinafter referred to as the “Excess Parachute Payments”)transactions contemplated by the Purchase Agreement) shall be made by the Board acting in good faith and in accordance with commonly accepted practices, the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; providedincluding, that to the extent any gross-up payment would be considered “deferred compensation” for purposes appropriate, the engagement of Section 409A an independent public accounting firm. Payment of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the grossGross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment Up Payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as time that withholding is required in connection with any Payment, provided that the Committee may designate payment of any Gross-Up Payment shall be made prior to a Change the date Employee is to remit the Excise Tax as provided under of Control the Internal Revenue Code of 1986, as amended (the “accounting firmCode”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment or pursuant to address such higher Excise Tax liabilityany judgment or agreement with any taxing authority.
Appears in 6 contracts
Samples: Employment Agreement (MBOW Four Star, L.L.C.), Employment Agreement (MBOW Four Star, L.L.C.), Employment Agreement (EP Energy Corp)
Gross-Up Payment. Payments under Section C.1. and Section C.2. Notwithstanding anything to the contrary in this Agreement (but subject to the remaining provisions of this Exhibit shall be made without regard to whether Article 10), in the deductibility of such payments (event that any payment, benefit or any other payments or benefits distribution by the Company to or for the benefit of Executive) Employee, whether paid, payable, provided, distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under imposed by Section 4999 of the Code 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”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive Employee an additional amount payment (the a “grossGross-up paymentPayment”) in an amount such that after reduction for payment by Employee of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including any Excise Tax imposed on any Gross-up payment equals Payment, Employee retains an amount of the Gross-up Payment equal to the Excise Tax with respect to imposed upon all Payments except for the Excess Parachute Cobalt Equity Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and . Notwithstanding the provisions of this Section C.3the preceding sentence, if it shall be determined that Employee is entitled to the Gross-up Payment, but that the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-up Payment shall be made to Employee and the amounts payable under Article 6 shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable under Article 8, if applicable, shall be adjusted made by reducing Payments payable hereunder (including reducing a Payment to zero) in the extent necessary order in which such Payments would be made (but only beginning with such Payment that would be made first in time and continuing, to the extent necessary) to comply with the requirements of Section 409A with respect , through to such payment so Payment that would be made last in time). For purposes of reducing the payment does not give rise Payments to the interest or additional tax Safe Harbor Amount, only amounts described at Section 409A(a)(1)(Bpayable under Article 8 (and no other Payments) or Section 409A(b)(4) shall be reduced. If the reduction of the Code (amount payable under Article 6 would not result in a reduction of the “Parachute Value of all Payments to the Safe Harbor Amount, then no amounts payable under Article 8 shall be reduced pursuant to this Section 409A penalties”)10.01. The Company’s obligation to make a Gross-up Payment under this Article 10 shall not be conditioned upon Employee’s termination of employment. The Gross-up Payment attributable to a particular Payment shall be made at the time such Payment is made; and further provided, however, that if, notwithstanding in no event shall the immediately preceding proviso, the grossGross-up payment cannot Payment be made to conform to later than the requirements end of Section 409A of Employee’s taxable year next following Employee’s taxable year in which Employee remits the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesrelated taxes. The Company and Employee shall make an initial determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, a Gross-up Payment is required and the amount of any grosssuch Gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityPayment.
Appears in 6 contracts
Samples: Severance Agreement (Cobalt International Energy, Inc.), Employment Agreement (Cobalt International Energy, Inc.), Employment Agreement (Cobalt International Energy, Inc.)
Gross-Up Payment. Payments under Section C.1. and Section C.2. Notwithstanding anything to the contrary in this Agreement (but subject to the remaining provisions of this Exhibit shall be made without regard to whether Section 8.01), in the deductibility of such payments (event that any payment, benefit or any other payments or benefits distribution by the Company to or for the benefit of Executive) Employee, whether paid, payable, provided, distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under imposed by Section 4999 of the Code 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”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive Employee an additional amount payment (the a “grossGross-up paymentPayment”) in an amount such that after reduction for payment by Employee of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including any Excise Tax imposed on any Gross-up payment equals Payment, Employee retains an amount of the Gross-up Payment equal to the Excise Tax with respect to imposed upon all Payments except for the Excess Parachute Cobalt Equity Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and . Notwithstanding the provisions of this Section C.3the preceding sentence, if it shall be determined that Employee is entitled to the Gross-up Payment, but that the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-up Payment shall be made to Employee and the amounts payable under Article 6 shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable under Article 6, if applicable, shall be adjusted made by reducing Payments payable hereunder (including reducing a Payment to zero) in the extent necessary order in which such Payments would be made (but only beginning with such Payment that would be made first in time and continuing, to the extent necessary) to comply with the requirements of Section 409A with respect , through to such payment so Payment that would be made last in time). For purposes of reducing the payment does not give rise Payments to the interest or additional tax Safe Harbor Amount, only amounts described at Section 409A(a)(1)(Bpayable under Article 6 (and no other Payments) or Section 409A(b)(4) shall be reduced. If the reduction of the Code (amount payable under Article 6 would not result in a reduction of the “Parachute Value of all Payments to the Safe Harbor Amount, then no amounts payable under Article 6 shall be reduced pursuant to this Section 409A penalties”)8.01. The Company’s obligation to make a Gross-up Payment under this Section 8.01 shall not be conditioned upon Employee’s termination of employment. The Gross-up Payment attributable to a particular Payment shall be made at the time such Payment is made; and further provided, however, that if, notwithstanding in no event shall the immediately preceding proviso, the grossGross-up payment cannot Payment be made to conform to later than the requirements end of Section 409A of Employee’s taxable year next following Employee’s taxable year in which Employee remits the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesrelated taxes. The Company and Employee shall make an initial determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, a Gross-up Payment is required and the amount of any grosssuch Gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityPayment.
Appears in 5 contracts
Samples: Severance Agreement (Cobalt International Energy, Inc.), Severance Agreement (Cobalt International Energy, Inc.), Severance Agreement (Cobalt International Energy, Inc.)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit shall be made without regard to whether In the deductibility of such payments (event that any payment, benefit or any other payments distribution by or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G on behalf of the Code (“Section 280G”) and without regard to whether such payments (Company or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits an Affiliate to or for the benefit of Executive (including, but not limited to, payments and benefits under whether paid or payable or distributed or distributable pursuant to the terms of this Agreement but or otherwise (the "Payments") is determined without regard to this paragraph) constitutes be an “"excess parachute payment” within the meaning of " pursuant to Section 280G of the Internal Revenue Code of 1986, as amended (the aggregate "Code") or any successor or substitute provision of such payments being hereinafter referred to as the “Excess Parachute Payments”Code, with the effect that Executive is liable for the payment of the excise tax described in Code Section 4999 or any successor or substitute provision of the Code (the "Excise Tax"), then the Company or an Affiliate shall promptly pay to Executive an additional amount (the “gross"Gross-up payment”Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Payments and any federal, state and local income and employment taxes and Excise Tax on the Gross-Up Payment, shall be equal to the Payments. All determinations required to be made under this paragraph, and the assumptions to be utilized in arriving at such determination, shall be made by the certified public accounting firm used for auditing purposes by the Company or an Affiliate immediately prior to Executive's employment termination or, if the parties determine that such certified public accounting firm cannot make such determination because of legal restrictions, the parties shall agree on a different certified public accounting firm (such certified public accounting firm is hereinafter referred to as the "Accounting Firm"), which shall provide detailed supporting calculations both to the Company (or the Affiliate) and Executive. The Company or the Affiliate shall pay all fees and expenses of the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Company, the Affiliate and the Executive, except as provided in the following sentences. As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that the Internal Revenue Service ("IRS") or other agency will claim that a greater or lesser Excise Tax is due. In the event that the Excise Tax is finally determined to be less than the amount taken into account hereunder in calculating the Gross-Up Payment, Executive shall repay to the Company or an Affiliate, at the time that the amount of such reduction for all taxes in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (including but not limited plus that portion of the Gross-Up Payment attributable to the Excise Tax) Tax and federal, state and local income and employment taxes imposed on the Gross-Up Payment being repaid by Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or local income or employment tax deduction). In the event that the Excise Tax is determined to exceed the amount taken into account hereunder in calculating the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company or an Affiliate shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by Executive with respect to such gross-up payment equals excess) at the time that the amount of such excess is finally determined. Executive and the Company (or the Affiliate) shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Excess Parachute Payments; provided. The Company or an Affiliate shall pay all fees and expenses of Executive relating to a claim by the IRS or other agency for the Excise Tax as provided below. Executive shall notify the Company in writing of any claim by the IRS that, that if successful, would require the payment by the Company or an Affiliate of the Gross-Up Payment or an additional Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A expiration of the Code30-day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, the manner and time of paymentCompany or an Affiliate, and subject to the provisions of this Section C.33.3, shall be adjusted control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner. In this connection, Executive agrees, subject to the extent necessary provisions of this Section 3.3, to (but only i) prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the extent necessaryCompany shall determine, (ii) give the Company or the Affiliate any information reasonably requested by the Company or the Affiliate relating to comply such claim, (iii) take such action in connection with contesting such claim as the requirements of Section 409A Company or the Affiliate shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such payment so that claim by an attorney reasonably selected by the payment does not give rise Company, (iv) cooperate with the Company and the Affiliate in good faith in order to effectively contest such claim and (v) permit the Company and the Affiliate to participate in any proceedings relating to such claim. The foregoing is subject, however, to the following: (i) the Company or an Affiliate shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or additional income tax amounts described at Section 409A(a)(1)(B(including interest and penalties with respect thereto) or Section 409A(b)(4imposed in connection therewith, (ii) of if the Code (the “Section 409A penalties”); Company directs Executive to pay such claim and further provided, that if, notwithstanding the immediately preceding provisoxxx for a refund, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment Company or an Affiliate shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, advance the amount of such paymentspayment to Executive, the amount of on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax owed or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance, and (iii) any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount of any gross-up payment is claimed to be due shall be made at limited solely to such contested amount and (iv) the Company’s expense by PricewaterhouseCoopers LLP 's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or by such other certified public accounting firm contest, as the Committee case may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoingbe, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined any other issue raised by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityIRS or any other taxing authority.
Appears in 5 contracts
Samples: Severance Agreement (Kanbay International Inc), Severance Agreement (Kanbay International Inc), Severance Agreement (Kanbay International Inc)
Gross-Up Payment. Payments If all or any portion of the Severance Payments, the Severance Benefits or any other payment made to the Executive by or on behalf of the Company under Section C.1this (S) 4.2 is subject to excise tax under (S) 4999 of the Internal Revenue Code of 1986, as amended (which shall be referred to in this (S) 4.2(c) as the "Code"), the Company shall pay to the Executive a "Gross Up Payment." The term "Gross Up Payment" as used in this Agreement shall mean a payment to or on behalf of the Executive which shall be sufficient to pay (i) 100% of any excise tax described in this (S) 4.2(c), (ii) 100% of any federal, state and local income tax and social security tax and other employment tax on the payment described in clause (i) above, and (iii) any interest or penalties assessed by the Internal Revenue Service on Executive which are related to the payment of such excise tax unless such interest or penalties are attributable to Executive's willful misconduct or negligence. and Section C.2. of this Exhibit A Gross Up Payment shall be made without regard to whether by the deductibility of such Company promptly after either the Company or the Company's independent accountants determine that any payments (or and benefits called for under this Agreement together with any other payments and benefits made available to the Executive by the Company and any other person will result in the Executive's being subject to an excise tax under (S) 4999 of the Code or such an excise tax is assessed against the Executive as a result of any such payments and other benefits if the Executive takes such action as the Company reasonably requests under the circumstances to mitigate or for the benefit of Executivechallenge such excise tax. Any determinations under this (S)4.2(c) would shall be limited or precluded by Section made in accordance with (S) 280G of the Code and any applicable related regulations (“Section 280G”whether proposed, temporary or final) and without regard any related Internal Revenue Service rulings and any related case law and, if the Company reasonably requests that the Executive take action to whether mitigate or challenge, or to mitigate and challenge, any such payments (tax or any other payments or benefits) would subject assessment and Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of complies with such payments being hereinafter referred to as the “Excess Parachute Payments”)request, the Company shall promptly provide Executive with such information and such expert advice and assistance from the Company's independent accountants, lawyers and other advisors as the Executive may reasonably request and shall pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to expenses incurred in effecting such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; providedcompliance and any related fines, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Codepenalties, the manner interest and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityassessments.
Appears in 5 contracts
Samples: Employment Agreement (Dan River Inc /Ga/), Employment Agreement (Dan River Inc /Ga/), Employment Agreement (Dan River Inc /Ga/)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit shall be made without regard In the event that the Executive becomes ---------------- entitled to whether the deductibility of such payments (Severance Benefits or any other benefits or payments under Section 2 of this Agreement (other than pursuant to this Section 2.6(C)) or benefits to the KESOP or for the benefit of Executive) would be limited or precluded DSOP by Section 280G reason of the Code accelerated vesting of stock options thereunder (“Section 280G”) together, the "Total Benefits"), and without regard to whether such payments (or in the event that any other payments or benefits) would of the Total Benefits will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to the Executive an additional amount (the “gross"Gross-up payment”Up Payment") such that the net amount retained by the Executive, after reduction deduction of any Excise Tax on the Total Benefits and any federal, state and local income tax, Excise Taxes and FICA and Medicare withholding taxes upon the payment provided for by this Section 2.6(C), shall be equal to the Total Benefits. For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive's termination of employment (whether pursuant to the terms of this Agreement or any other agreement, plan or arrangement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all taxes (including but not limited "excess parachute payments" within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel ("Tax Counsel") selected by the Company's independent auditors and acceptable to the Executive, such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the Base Amount, or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Benefits which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Benefits reduced by the amount of such Total Benefits that in the opinion of Tax Counsel are not parachute payments, or (B) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence on the Date of Termination, net of the reduction in federal income taxes which could be obtained from deduction of such state and local taxes (calculated by assuming that any reduction under Section 68 of the Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of such state and local income taxes that would otherwise be deductible by the Executive). In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive's employment, the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare withholding taxes imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax, FICA and Medicare withholding taxes and/or a federal, state or local income tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment to the Executive in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined.
Appears in 5 contracts
Samples: Employment Agreement (Vallicorp Holdings Inc), Employment Agreement (Vallicorp Holdings Inc), Employment Agreement (Vallicorp Holdings Inc)
Gross-Up Payment. Payments In the event that any payments to which Employee becomes entitled under Section C.1. and Section C.2. of this Exhibit shall Employment Agreement (the "Agreement Payments") will be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the “Company shall pay to Employee at the time specified below, an additional amount (the "Gross-Up Payment") such that the net amount retained by Employee (taking into account the Total Payments (as hereinafter defined) and the Gross-Up Payment), after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the Gross-Up Payment provided for by this Section 15, but before deduction for any federal, state or local income tax on the Total Payments, shall be equal to the "Total Payments," as defined below. Except as otherwise provided below, the Gross-Up Payment or portion thereof provided for in this Section 15 shall be paid not later than the thirtieth (30th) day following payment of any amounts under the Employment Agreement that will be subject to the Excise Tax”; provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than the forty-fifth (45th) day after payment of any amounts under the Employment Agreement that will be subject to the Excise Tax. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to Employee, payable on the fifth (5th) day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). If For purposes of determining whether any portion of the payments Agreement Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments, accruals, vestings or other compensatory benefits received or to be received by Employee in connection with a Change in Control of the Company or for the benefit termination of Executive Employee's employment (including, but not limited to, payments and benefits under whether pursuant to the terms of this Agreement but determined without regard to this paragraphor any other plan, arrangement or agreement with the Company), any person whose actions result in a Change in Control of the Company or any person affiliated with the Company or such person (which, together with the Agreement Payments, shall constitute the "Total Payments") constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, in the opinion of tax counsel selected by the Company's independent auditors, such other payments or benefits (in whole or in part) represent reasonable compensation for services actually rendered within the aggregate meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Total Payments, and (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) of the Code (after applying clause (i) above) and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and the applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time the Gross-Up Payment is made, Employee shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the portion of the Gross-Up Payment being hereinafter referred repaid) if such repayment results in a reduction in Excise Tax and/or a federal, state and local income tax deduction, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to as exceed the “Excess Parachute Payments”amount taken into account hereunder at the time the Gross-Up Payment is made (including, by reason of any payment, the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes payment in respect of such excess (including but not limited to the Excise Tax) plus any interest payable with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined.
Appears in 5 contracts
Samples: Employment Agreement (Delhaize America Inc), Employment Agreement (Delhaize America Inc), Employment Agreement (Delhaize America Inc)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit In the event it shall be made without regard to whether the deductibility determined that any xxxxxxx or distribution of such payments (or any other payments or benefits type to or for the benefit of Executive) would be limited the Employee, by Westport, any Affiliate, any person who acquires ownership or precluded by Section 280G effective control of the Code (“Section 280G”) and without regard to whether such payments (Westport or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 ownership of the Code (the “Excise Tax”). If any a substantial portion of the payments or benefits to or for the benefit of Executive Westport's assets (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G of the Code and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the aggregate "Total Payments"), is or will be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such payments being hereinafter excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excess Parachute Payments”"Excise Tax"), then the Company Employee shall promptly pay be entitled to Executive receive an additional payment (a "Gross-Up Payment") in an amount (the “gross-up payment”) such that after reduction for payment by the Employee of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-up payment equals Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax with respect imposed upon the Total Payments. Notwithstanding the foregoing provisions of this Section 6(a), if it shall be determined that the Employee is entitled to a Gross-Up Payment, but that the Total Payments would not be subject to the Excess Parachute Payments; provided, Excise Tax if the Total Payments were reduced by an amount that to is less than 10% of the extent any gross-up payment portion of the Total Payments that would be considered “deferred compensation” for purposes of treated as "parachute payments" under Section 409A 280G of the Code, then the manner and time of payment, and amounts payable to the provisions of Employee under this Section C.3, Agreement shall be adjusted reduced to the extent necessary (but only maximum amount that could be paid to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give Employee without giving rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to the Employee. The reduction of the amounts payable hereunder, if any) determined applicable, shall be made by reducing first the payment under Section 4(a), unless an alternative method of reduction is elected by the accounting firmEmployee. For purposes of reducing the Total Payments to the Safe Harbor Cap, the Company only amounts payable under this Agreement (and no other amounts) shall promptly augment the gross-up payment to address such higher Excise Tax liabilitybe reduced.
Appears in 5 contracts
Samples: Control Severance Protection Agreement (Westport Finance Co), Control Severance Protection Agreement (Westport Finance Co), Control Severance Protection Agreement (Westport Finance Co)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit In the event that it shall be made without regard to whether determined at any time that the deductibility of such payments payment provided under paragraph 8(d) above (the "Contract Payment") or any other payments payment or benefits to or for distribution by the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive Company to the federal excise Executive (including deemed payments arising from accelerated vesting of stock options) is subject to the tax levied on certain “excess parachute payments” under Section (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code (the “Excise Tax”). If any portion of 1986, as amended, Section 11.5 of the payments Company's 1997 Employee Stock Option Plan or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess similar "parachute payment” within " limitations under any other agreement between the meaning of Section 280G (Company and the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”)Executive that are in effect shall not apply, and the Company shall promptly pay to the Executive an additional amount (the “gross-up payment”"Gross- Up Payment") such that the net amount retained by the Executive, after reduction deduction of any Excise Tax on the Contract Payment and such other Total Payments (as defined below) and any federal and state and local income tax and Excise Tax upon the payment provided for by this paragraph, shall be equal to the Contract Payment and such other Total Payments. For purposes of determining whether any of the payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a change in control of the Company or the Executive's termination of employment, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a change in control of the Company or any corporation affiliated (or which, as a result of the completion of a transaction causing a change in control, will become affiliated) with the Company within the meaning of Section 1504 of the Code (together with the Contract Payment, the "Total Payments") shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all taxes (including but not limited "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax) with respect to such gross-up payment equals , unless in the Excise Tax with respect opinion of tax counsel selected by the Company's independent auditors and acceptable to the Excess Parachute Payments; providedExecutive the Total Payments (in whole or in part) do not constitute parachute payments, that to or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the extent any gross-up payment would be considered “deferred compensation” for purposes meaning of Section 409A section 280G(b)(4) of the Code either in their entirety or in excess of the base amount within the meaning of section 280G(b)(3) of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted or are otherwise not subject to the extent necessary Excise Tax, (but only to the extent necessaryii) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the grossTotal Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-up cash benefits or any deferred payment or benefit shall be determined without regard by the Company's independent auditors in accordance with the principles of sections 280G(b)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to any grosspay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-up for Up Payment is to be made and state and local income taxes at the Section 409A penaltieshighest marginal rate of taxation in the state and locality of the Executive's residence on the date of determination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. The determination as In the event that the Excise Tax is subsequently determined to whether Executive’s payments and benefits include Excess Parachute Payments andbe less than the amount taken into account hereunder at the time of payment of the Gross-Up Payment, if so, the Executive shall repay to the Company at the time that the amount of such payments, reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax and/or a federal state and local income tax deduction) plus interest on the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made such repayment at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.rate provided in section
Appears in 4 contracts
Samples: Employment Agreement (Capital Re Corp), Employment Agreement (Capital Re Corp), Employment Agreement (Capital Re Corp)
Gross-Up Payment. (A) Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any Payments would be subject to the Excise Tax or any interest or penalties are incurred, and it is determined that the Payments should not be reduced pursuant to subsection 5(d), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes, employment taxes (and any interest and penalties imposed with respect thereto) and Excise Taxes imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (B) All determinations required to be made under Section C.1. this subsection 5(d)(iii), including whether and Section C.2. when a Gross-Up Payment is required and the amount of this Exhibit such Gross-up Payment and the assumptions to be utilized in arriving at such determination, shall be made without regard by the Accountants, who shall provide detailed supporting calculations both to whether the deductibility Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such payments earlier time as is requested by the Company. All fees and expenses of the Accountants shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this subsection 5(d)(iii), shall be paid by the Company to the Executive within five days of the receipt of the Accountants' determination. Any determination made independently and in good faith by the Accountants shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Sections 280G and 4999 of the Code, at the time of the initial determination by the Accountants hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (or "Underpayment") consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to subsection 5(d)(iii)(C) and the Executive thereafter is required to make a payment of any other payments or benefits Excise Tax, the Accountants shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. (C) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would be limited or precluded require the payment by Section 280G the Company of the Code (“Section 280G”) Gross-Up Payment. Such notification shall be given as soon as practicable but no later than thirty business days after the Executive is informed in writing of such claim and without regard shall apprise the Company of the nature of such claim and the date on which such claim is requested to whether be paid. The Executive shall not pay such payments claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any other payments or benefits) would subject Executive payment of taxes with respect to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (1) give the Company any portion of information reasonably requested by the payments or benefits Company relating to or for such claim, (2) take such action in connection with contesting such claim as the benefit of Executive (Company shall reasonably request in writing from time to time, including, but not limited towithout limitation, payments accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (3) cooperate with the Company in good faith in order effectively to contest such claim, and benefits under this Agreement but determined without regard (4) permit the Company to this paragraphparticipate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) constitutes incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an “excess parachute payment” within the meaning of Section 280G after- tax basis, for any Excise Tax or income tax (the aggregate including interest and penalties with respect thereto) imposed as a result of such payments being hereinafter referred to as representation and payment of costs and expenses. Without limitation on the “Excess Parachute Payments”foregoing provisions of this subsection 5(d)(iii), the Company shall promptly control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, further, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an additional amount (interest-free basis and shall indemnify and hold the “grossExecutive harmless, on an after-up payment”) that after reduction for all taxes tax basis, from any Excise Tax or income tax (including but not limited to the Excise Taxinterest or penalties with respect thereto) imposed with respect to such gross-up payment equals the Excise Tax advance or with respect to the Excess Parachute Paymentsany imputed income with respect to such advance; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be any other issue raised by the Internal Revenue Service or any other taxing authority. (D) If, after the receipt by the Executive of an amount advanced by the Company pursuant to subsection 5(d)(iii)(C), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply Company's complying with the requirements of Section 409A subsection 5(d)(iii)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If after the receipt by the Executive of an amount advanced by the Company pursuant to subsection 5(d)(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such payment so that claim and the payment Company does not give rise notify the Executive in writing of its intent to contest such denial of refund prior to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) expiration of the Code (the “Section 409A penalties”); 30 days after such determination, then such advance shall be forgiven and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment canshall not be made required to conform be repaid and the amount of such advance shall offset, to the requirements of Section 409A of the Codeextent thereof, the amount of the grossGross-up payment shall Up Payment required to be determined without regard to any gross-up for the Section 409A penaltiespaid. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability6.
Appears in 4 contracts
Samples: Employment Agreement (Pepco Holdings Inc), Employment Agreement (Pepco Holdings Inc), Employment Agreement (Pepco Holdings Inc)
Gross-Up Payment. Payments In the event that (i) the Employee becomes entitled to the payments provided under Section C.1. and Section C.2. 10.2 of this Exhibit shall be made without regard to whether Agreement (the deductibility of such payments (or "Change in Control Payments") and any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would Change in Control Payments will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”"Code"). If , or any portion of the successor provision, or (ii) any payments or benefits received or to be received by the Employee pursuant to the terms of any other plan, arrangement or agreement (the "Benefit Payments") will be subject to the Excise Tax, the Company shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee, after deduction of any Excise Tax on the Change in Control Payments and the Benefit Payments, and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 10.3, shall be equal to the benefit Change in Control Payments and the Benefit Payments, provided, however, that in determining the amount of Executive the Gross-Up Payment, any Excise Tax on the Change in Control Payments and the Benefit Payments shall be determined using a rate no higher than 20%. For purposes of determining whether any of the Change in Control Payments or the Benefit Payments will be subject to the Excise Tax and the amount of such Excise Tax, (includingi) any payments or benefits received or to be received by the Employee in connection with a change in control of the Company or the Employee's termination of employment (whether pursuant to the terms of this agreement or any other plan, but not limited toarrangement or agreement with the Company, payments and benefits under this Agreement but determined without regard to this paragraphany person whose actions result in change in control or any person affiliated with the Company or such persons) constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b) (2) of the aggregate Code, and all "excess parachute payments" within the meaning of Section 280G(b) (1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to the Employee such payments or benefits (in whole or in part) do not constitute parachute payments, or such excess payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b) (4) of the Code, (ii) the amount of the Change in Control Payments and the Benefit Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Change in Control Payments and the Benefit Payments or (B) the amount of excess parachute payments within the meaning of Sections 280G(b)(1) and (4) (after applying clause (i), above) and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Employee's residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments being hereinafter referred state and local taxes. In the event that the Excise Tax is subsequently determined to as be less than the “Excess Parachute Payments”amount taken into account hereunder at the time of termination of the Employee's employment, the Employee shall repay to the Company at that time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Employee's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address the Employee in respect of such higher Excise Tax liabilityexcess (plus any interest payable with respect to such excess) at the time that the amount of such excess is finally determined.
Appears in 3 contracts
Samples: Employment Agreement (Intervoice Brite Inc), Employment Agreement (Intervoice Brite Inc), Employment Agreement (Intervoice Brite Inc)
Gross-Up Payment. Payments under The term “Gross Up Payment” as used in this Agreement shall mean a payment to or on behalf of Employee which shall be sufficient to pay (1) 100% of any excise tax described in this Section C.111, (2) 100% of any federal, state and local income tax and social security and other employment tax on the payment made to pay such excise tax as well as any additional taxes on such payment and (3) 100% of any interest or penalties assessed by the Internal Revenue Service on Employee which are related to the timely payment of such excise tax (unless such interest or penalties are attributable to Employee’s willful misconduct or gross negligence with respect to such timely payment). and Section C.2. of this Exhibit A Gross Up Payment shall be made without regard by the Company in a lump sum at the Company’s option either directly to whether the deductibility United State Treasury or to Employee after either the Company or the Company’s independent accountants determine that any payments and benefits called for under this Agreement together with any other payments and benefits made available to Employee by the Company and any other person will result in Employee being subject to an excise tax under § 4999 of the Code or such an excise tax is assessed against Employee as a result of any such payments and other benefits if Employee takes such action (other than waiving Employee’s right to any payments or benefits in excess of the payments or benefits which Employee has expressly agreed to waive under this Section 11) as the Company reasonably requests under the circumstances to mitigate or challenge such excise tax; provided, however, if the Company or the Company’s independent accountants make the determination described in this Section 11 and, further, determine that Employee will not be subject to any such excise tax if Employee waives Employee’s right to receive a part of such payments (or any other benefits and such part does not exceed $10,000, Employee shall irrevocably waive Employee’s right to receive such part if an independent accountant or lawyer retained by Employee and paid by the Company agrees with the determination made by the Company or the Company’s independent accountants with respect to the effect of such reduction in payments or benefits to or for the benefit of Executive) would benefits. Any determinations under this Section 11 shall be limited or precluded by Section made in accordance with § 280G of the Code and any applicable related regulations (“Section 280G”whether proposed, temporary or final) and without regard any related Internal Revenue Service rulings and any related case law and, if the Company reasonably requests that Employee take action to whether mitigate or challenge, or to mitigate and challenge, any such payments tax or assessment (or other than waiving Employee’s right to any other payments or benefits) would subject Executive to the federal excise tax levied on certain “benefits in excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits which Employee has expressly agreed to or for the benefit of Executive (including, but not limited to, payments and benefits waive under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of 11 and Employee complies with such payments being hereinafter referred to as the “Excess Parachute Payments”)request, the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) provide Employee with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner information and time of payment, such expert advice and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at assistance from the Company’s expense by PricewaterhouseCoopers LLP or by independent accountants, lawyers and other advisors as Employee may reasonably request and shall pay for all expenses incurred in effecting such compliance and any related fines, penalties, interest and other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityassessments.
Appears in 3 contracts
Samples: Employment Agreement (Afc Enterprises Inc), Employment Agreement (Afc Enterprises Inc), Employment Agreement (Afc Enterprises Inc)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit Except as set forth below, in the event it shall be made without regard to whether determined that any payment or distribution by the deductibility of such payments (or any other payments or benefits Company to or for the benefit of Executivethe Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9(f) (a "Payment") would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (the “Excise Tax”). If such excise tax, together with any portion of the payments or benefits to or for the benefit of Executive (includingsuch interest and penalties, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being are hereinafter collectively referred to as the “Excess Parachute Payments”"Excise Tax"), then the Company Executive shall promptly pay be entitled to Executive receive an additional payment (a "Gross-Up Payment") in an amount (the “gross-up payment”) such that after reduction for payment by the Executive of all taxes (including but not limited any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 9(f), (i) if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Executive, after taking into account the Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least $100,000 (taking into account both income taxes and any Excise Tax) as compared to the net after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment and a reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount") such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount and (ii) in the event that the total Gross-Up Payment payable to the Executive, when combined with all other similar amounts payable by the Company to or on behalf of other officers and employees of the Company and its subsidiaries and affiliates with respect to Excise Taxes imposed on amounts payable to such other officers and employees, would otherwise exceed $10,000,000, the Gross-Up Payment payable to the Executive shall not exceed $10,000,000 multiplied by a fraction, the numerator of which is the Excise Tax payable by the Executive on the Payments (without regard to the Gross-Up Payment) and the denominator of which is the aggregate Excise Taxes payable by the Executive and all such other officers and employees (determined without regard to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”payments); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.
Appears in 3 contracts
Samples: Employment Agreement (S1 Corp /De/), Employment Agreement (S1 Corp /De/), Employment Agreement (S1 Corp /De/)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of Notwithstanding Anything in this Exhibit Agreement to the contrary, in the event it shall be made without regard to whether the deductibility of such payments (determined that any payment or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits distribution to or for the benefit of Executive whether paid or payable or distributed or distributable pursuant to the terms of this Agreement (including, but not limited to, payments and benefits other than any payment under this Agreement but determined without regard Section 3) or otherwise would be subject to this paragraph) constitutes an “excess parachute payment” within the meaning excise tax imposed by Section 4999 of Section 280G the Internal Revenue Code of 1986 (the aggregate of “Code”) or a similar section (such payments being hereinafter referred to as payment, a “Change in Control Payment” and such excise tax on all such Change in Control Payments, together with any interest and penalties thereon, collectively the “Excess Parachute PaymentsExcise Tax”), the Company then Executive shall promptly pay be entitled to Executive receive an additional amount payment (the a “grossGross-up paymentUp Payment”) in an amount determined by the Accounting Firm such that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; providedby Executive of any tax thereon, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A Executive retains an amount of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted Gross-Up Payment equal to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the grossExcise Tax; provided, however, that if the aggregate value (as determined under Section 280G of the Code) of such Change in Control Payments is less than 110% of the product of “3 times” the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) (such product, the “Golden Parachute Threshold”), then Executive shall not be entitled to any Gross-up payment Up Payment and, instead, the Change in Control Payments shall be determined without regard reduced so that their aggregate value (as so determined) is equal to any gross-up for $1.00 less than the Golden Parachute Threshold. For purposes of this Section 409A penalties. The determination as to whether 3, Executive’s payments applicable Federal, state and benefits include Excess Parachute Payments andlocal taxes shall be computed at the maximum marginal rates, if so, taking into account the amount of such payments, the amount effect of any Excise Tax owed with respect thereto, and loss of personal exemptions resulting from receipt of the amount of any grossGross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityUp Payment.
Appears in 3 contracts
Samples: Severance Compensation Agreement (Aquila Inc), Severance Compensation Agreement (Aquila Inc), Severance Compensation Agreement (Aquila Inc)
Gross-Up Payment. Payments under Section C.1. In the event that the Executive becomes entitled to the severance benefits described in Sections 5(a) and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (5(b) or any other benefits or payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (under this Agreement or any other payments agreement, plan, instrument or benefitsobligation in whatever form of the Company or its subsidiaries or affiliates (other than pursuant to this Section) would including by reason of the accelerated vesting of stock options or restricted stock hereunder or thereunder (together, the “Total Benefits”), and in the event that any of the Total Benefits will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under Code Section 4999 of the Code 4999, including interest, penalties or other excise tax thereon (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to the Executive an additional amount (the “grossGross-up paymentUp Payment”) such that the net amount retained by the Executive, after reduction deduction of any Excise Tax on the Total Benefits and any federal, state and local income tax, Excise Tax and FICA and Medicare withholding taxes upon the payment provided for by this Section, shall be equal to the Total Benefits. For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive’s termination of employment (whether pursuant to the terms of this Agreement or any other agreement, plan or arrangement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all taxes (including but not limited “excess parachute payments” within the meaning the Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel (“Tax Counsel”) with respect to such gross-up payment equals selected by the Excise Tax with respect Company’s independent auditors and acceptable to the Excess Parachute Payments; providedExecutive, that to such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the extent any gross-up payment would be considered “deferred compensation” for purposes meaning of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4280G(b)(4) of the Code in excess of the Base Amount (as defined in the “Section 409A penalties”Code); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment canor are otherwise not be made to conform subject to the requirements of Section 409A of the CodeExcise Tax, (ii) the amount of the gross-up payment Total Benefits which shall be determined without regard treated as subject to any gross-up for the Section 409A penalties. The determination as Excise Tax shall be equal to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the lesser of (A) the total amount of the Total Benefits reduced by the amount of such Total Benefits that in the opinion of Tax Counsel are not parachute payments, or (B) the amount of any Excise Tax owed with respect theretoexcess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of any grossthe Gross-up payment Up Payment, the Executive shall be made deemed to pay federal income taxes at the Companyhighest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s expense residence on the date of termination, net of the reduction in federal income taxes which could be obtained from deduction of such state and local taxes (calculated by PricewaterhouseCoopers LLP or by assuming that any reduction under Section 68 of the Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability state and local income taxes that is higher than the Excise Tax (if any) determined would otherwise be deductible by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityExecutive).
Appears in 2 contracts
Samples: Termination Agreement (Petroquest Energy Inc), Termination Agreement (Petroquest Energy Inc)
Gross-Up Payment. Payments under The term “Gross Up Payment” as used in this Agreement shall mean a payment to or on behalf of Employee which shall be sufficient to pay (1) 100% of any excise tax described in this Section C.111, (2) 100% of any federal, state and local income tax and social security and other employment tax on the payment made to pay such excise tax as well as any additional taxes on such payment and (3) 100% of any interest or penalties assessed by the Internal Revenue Service on Employee which are related to the timely payment of such excise tax (unless such interest or penalties are attributable to Employee’s willful misconduct or gross negligence with respect to such timely payment). and Section C.2. of this Exhibit A Gross Up Payment shall be made without regard by the Company in a lump sum at the Company’s option either directly to whether the deductibility United States Treasury or to Employee after either the Company or the Company’s independent accountants determine that any payments and benefits called for under this Agreement together with any other payments and benefits made available to Employee by the Company and any other person will result in Employee being subject to an excise tax under § 4999 of the Code or such an excise tax is assessed against Employee as a result of any such payments and other benefits if Employee takes such action (other than waiving Employee’s right to any payments or benefits in excess of the payments or benefits which Employee has expressly agreed to waive under this Section 11) as the Company reasonably requests under the circumstances to mitigate or challenge such excise tax; provided, however, if the Company or the Company’s independent accountants make the determination described in this Section 11 and, further, determine that Employee will not be subject to any such excise tax if Employee waives Employee’s right to receive a part of such payments (or any other benefits and such part does not exceed $10,000, Employee shall irrevocably waive Employee’s right to receive such part if an independent accountant or lawyer retained by Employee and paid by the Company agrees with the determination made by the Company or the Company’s independent accountants with respect to the effect of such reduction in payments or benefits to or for the benefit of Executive) would benefits. Any determinations under this Section 11 shall be limited or precluded by Section made in accordance with § 280G of the Code and any applicable related regulations (“Section 280G”whether proposed, temporary or final) and without regard any related Internal Revenue Service rulings and any related case law and, if the Company reasonably requests that Employee take action to whether mitigate or challenge, or to mitigate and challenge, any such payments tax or assessment (or other than waiving Employee’s right to any other payments or benefits) would subject Executive to the federal excise tax levied on certain “benefits in excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits which Employee has expressly agreed to or for the benefit of Executive (including, but not limited to, payments and benefits waive under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of 11 and Employee complies with such payments being hereinafter referred to as the “Excess Parachute Payments”)request, the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) provide Employee with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner information and time of payment, such expert advice and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at assistance from the Company’s expense by PricewaterhouseCoopers LLP or by independent accountants, lawyers and other advisors as Employee may reasonably request and shall pay for all expenses incurred in effecting such compliance and any related fines, penalties, interest and other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityassessments.
Appears in 2 contracts
Samples: Employment Agreement (Afc Enterprises Inc), Employment Agreement (Afc Enterprises Inc)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit In the event it shall be made without regard to whether the deductibility determined that any payment or distribution of such payments (or any other payments or benefits type to or for the benefit of Executive) would be limited the Officer, by Westport, any Affiliate, any person who acquires ownership or precluded by Section 280G effective control of the Code (“Section 280G”) and without regard to whether such payments (Westport or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 ownership of the Code (the “Excise Tax”). If any a substantial portion of the payments or benefits to or for the benefit of Executive Westport's assets (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G of the Code and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the aggregate "Total Payments"), is or will be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such payments being hereinafter excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excess Parachute Payments”"Excise Tax"), then the Company Officer shall promptly pay be entitled to Executive receive an additional payment (a "Gross-Up Payment") in an amount (the “gross-up payment”) such that after reduction for payment by the Officer of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-up payment equals Up Payment, the Officer retains an amount of the Gross-Up Payment equal to the Excise Tax with respect imposed upon the Total Payments. Notwithstanding the foregoing provisions of this Section 7(a), if it shall be determined that the Officer is entitled to a Gross-Up Payment, but that the Total Payments would not be subject to the Excess Parachute Payments; provided, Excise Tax if the Total Payments were reduced by an amount that to is less than 10% of the extent any gross-up payment portion of the Total Payments that would be considered “deferred compensation” for purposes of treated as "parachute payments" under Section 409A 280G of the Code, then the manner and time of payment, and amounts payable to the provisions of Officer under this Section C.3, Agreement shall be adjusted reduced to the extent necessary (but only maximum amount that could be paid to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give Officer without giving rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to the Officer. The reduction of the amounts payable hereunder, if any) determined applicable, shall be made by reducing first the payment under Section 6(a), unless an alternative method of reduction is elected by the accounting firmOfficer. For purposes of reducing the Total Payments to the Safe Harbor Cap, the Company only amounts payable under this Agreement (and no other amounts) shall promptly augment the gross-up payment to address such higher Excise Tax liabilitybe reduced.
Appears in 2 contracts
Samples: Employment Agreement (Westport Resources Corp /Nv/), Employment Agreement (Westport Resources Corp /Nv/)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of Anything in this Exhibit shall be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive Agreement to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of contrary notwithstanding and except as set forth below, in the Code event that a Payment (as defined below) is received by the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (includingthat, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G of the Code, is contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company (a “280G Transaction”) with regard to a 280G Transaction that occurs on or prior to the aggregate third anniversary of the IPO Date and the Accounting Firm (as defined below) shall determine that receipt of such payments being hereinafter referred Payment would subject the Executive to the Excise Tax (as the “Excess Parachute Payments”defined below), then the Company Executive shall promptly pay be entitled to Executive receive an additional amount payment (the “grossGross-up paymentUp Payment”) that in an amount such that, after reduction for payment by the Executive of all taxes (including but not limited to the Excise Tax) and any interest or penalties imposed with respect to such gross-up payment equals the taxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax with respect imposed upon the Gross-Up Payment, but excluding any income taxes and penalties imposed pursuant to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time Executive retains an amount of payment, and the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section C.38(a), if it shall be determined that the Executive is entitled to the Gross-Up Payment, but that the Parachute Value (as defined below) of all Payments does not exceed 110% of the Safe Harbor Amount (as defined below), then no Gross-Up Payment shall be made to the Executive and the Agreement Payments (as defined below) shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the Agreement Payments, if applicable, shall be adjusted to made by reducing the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess under the following sections of this Agreement in the following order: first from Section 5(a)(i)(B), then from Section 5(a)(iii), then from Section 5(a)(iv) and lastly from Section 5(a)(ii). For purposes of reducing the Payments to the Safe Harbor Amount, only Agreement Payments (and no other Payments) shall be reduced. If the reduction of the Agreement Payments would not result in a reduction of the Parachute Value of all Payments andto the Safe Harbor Amount, if so, then there shall be no reduction in the amount of such payments, the amount of any Excise Tax owed with respect thereto, Agreement Payments pursuant to this Section 8(a) and the amount of any gross-up payment Executive shall be made at entitled to the Gross-Up Payment. The Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as obligation to make Gross-Up Payments under this Section 8(a) shall not be conditioned upon the Committee may designate prior to a Change Executive’s termination of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityemployment.
Appears in 2 contracts
Samples: Employment Agreement (Primerica, Inc.), Employment Agreement (Primerica, Inc.)
Gross-Up Payment. Payments In the event that (i) the Employee becomes entitled to the payments provided under Section C.1. and Section C.2. 10.2 of this Exhibit shall be made without regard to whether Agreement (the deductibility of such payments (or "Change in Control Payments") and any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would Change in Control Payments will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”"Code"). If , or any portion of the successor provision, or (ii) any payments or benefits received or to be received by the Employee pursuant to the terms of any other plan, arrangement or agreement (the "Benefit Payments") will be subject to the Excise Tax, the Company shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee, after deduction of any Excise Tax on the Change in Control Payments and the Benefit Payments, and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 10.3, shall be equal to the benefit Change in Control Payments and the Benefit Payments, provided, however, that in determining the amount of Executive the Gross-Up Payment, any Excise Tax on the Change in Control Payments and the Benefit Payments shall be determined using a rate no higher that 20%. For purposes of determining whether any of the Change in Control Payments or the Benefit Payments will be subject to the Excise Tax and the amount of such Excise Tax, (includingi) any payments or benefits received or to be received by the Employee in connection with a change in control of the Company or the Employee's termination of employment (whether pursuant to the terms of the agreement or any other plan, but not limited toarrangement or agreement with the Company, payments and benefits under this Agreement but determined without regard to this paragraphany person whose actions result in change in control or any person affiliated with the Company or such persons) constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to the Employee such payments or benefits (in whole or in part) do not constitute parachute payments, or such excess payments (in whole or in part) represent reasonable compensation for services actually rendered within the aggregate meaning of Section 280G(b)(4) of the Code, (ii) the amount of the Change in Control Payments and the Benefit Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Change in Control Payments and the Benefits Payments or (B) the amount of excess parachute payments within the meaning of Sections 280G(b)(1) and (4) (after applying clause (i), above) and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Employee's residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments being hereinafter referred state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Employee's employment, the Employee shall repay to the Company at that time that amount of such reduction in Excise Tax as is finally determined to be the “Excess Parachute Payments”portion of the Gross-Up Payment attributable to such reduction plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Employee's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address the Employee in respect of such higher Excise Tax liabilityexcess (plus any interest payable with respect to such excess) at the time that the amount of such excess is finally determined.
Appears in 2 contracts
Samples: Employment Agreement (Intervoice Inc), Employment Agreement (Intervoice Inc)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“"Section 280G”") and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “"excess parachute payments” " under Section 4999 of the Code (the “"Excise Tax”"). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “"excess parachute payment” " within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “"Excess Parachute Payments”"), the Company shall promptly pay to Executive an additional amount (the “"gross-up payment”") that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “"deferred compensation” " for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “"Section 409A penalties”"); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s 's payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s 's expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “"accounting firm”"). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.
Appears in 2 contracts
Samples: Employment Agreement (TJX Companies Inc /De/), Employment Agreement (TJX Companies Inc /De/)
Gross-Up Payment. Payments In the event that any payments to which Employee becomes entitled under Section C.1. and Section C.2. of this Exhibit shall Employment Agreement (the "Agreement Payments") will be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the “Company shall pay to Employee at the time specified below, an additional amount (the "Gross-Up Payment") such that the net amount retained by Employee (taking into account the Total Payments (as hereinafter defined) and the Gross-Up Payment), after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the Gross-Up Payment provided for by this Section 15, but before deduction for any federal, state or local income tax on the Total Payments, shall be equal to the "Total Payments," as defined below. Except as otherwise provided below, the Gross-Up Payment or portion thereof provided for in this Section 15 shall be paid not later than the thirtieth (30th) day following payment of any amounts under the Employment Agreement that will be subject to the Excise Tax”; provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than the forty-fifth (45th) day after payment of any amounts under the Employment Agreement that will be subject to the Excise Tax. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to Employee, payable on the fifth (5th) day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). If For purposes of determining whether any portion of the payments Agreement Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments, accruals, vestings or other compensatory benefits received or to be received by Employee in connection with a Change in Control of the Company or for the benefit termination of Executive Employee's employment (including, but not limited to, payments and benefits under whether pursuant to the terms of this Agreement but determined without regard to this paragraphor any other plan, arrangement or agreement with the Company), any person whose actions result in a Change in Control of the Company or any person affiliated with the Company or such person (which, together with the Agreement Payments, shall constitute the "Total Payments") constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, in the opinion of tax counsel selected by the Company's independent auditors, such other payments or benefits (in whole or in part) represent reasonable compensation for services actually rendered within the aggregate meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Total Payments, or (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) of the Code (after applying clause (i) above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and the applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time the Gross-Up Payment is made, Employee shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the portion of the Gross-Up Payment being hereinafter referred repaid) if such repayment results in a reduction in Excise Tax and/or a federal, state and local income tax deduction, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to as exceed the “Excess Parachute Payments”amount taken into account hereunder at the time the Gross-Up Payment is made (including, by reason of any payment, the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes payment in respect of such excess (including but not limited to the Excise Tax) plus any interest payable with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined.
Appears in 2 contracts
Samples: Employment Agreement (Food Lion Inc), Employment Agreement (Food Lion Inc)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit In the event it shall be made without regard to whether the deductibility determined that anx xxxxxxt or distribution of such payments (or any other payments or benefits type to or for the benefit of Executive) would be limited the Employee, by Westport, any Affiliate, any person who acquires ownership or precluded by Section 280G effective control of the Code (“Section 280G”) and without regard to whether such payments (Westport or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 ownership of the Code (the “Excise Tax”). If any a substantial portion of the payments or benefits to or for the benefit of Executive Westport's assets (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G of the Code and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the aggregate "Total Payments"), is or will be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such payments being hereinafter excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excess Parachute Payments”"Excise Tax"), then the Company Employee shall promptly pay be entitled to Executive receive an additional payment (a "Gross-Up Payment") in an amount (the “gross-up payment”) such that after reduction for payment by the Employee of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-up payment equals Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax with respect imposed upon the Total Payments. Notwithstanding the foregoing provisions of this Section 6(a), if it shall be determined that the Employee is entitled to a Gross-Up Payment, but that the Total Payments would not be subject to the Excess Parachute Payments; provided, Excise Tax if the Total Payments were reduced by an amount that to is less than 10% of the extent any gross-up payment portion of the Total Payments that would be considered “deferred compensation” for purposes of treated as "parachute payments" under Section 409A 280G of the Code, then the manner and time of payment, and amounts payable to the provisions of Employee under this Section C.3, Agreement shall be adjusted reduced to the extent necessary (but only maximum amount that could be paid to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give Employee without giving rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to the Employee. The reduction of the amounts payable hereunder, if any) determined applicable, shall be made by reducing first the payment under Section 4(a), unless an alternative method of reduction is elected by the accounting firmEmployee. For purposes of reducing the Total Payments to the Safe Harbor Cap, the Company only amounts payable under this Agreement (and no other amounts) shall promptly augment the gross-up payment to address such higher Excise Tax liabilitybe reduced.
Appears in 2 contracts
Samples: Control Severance Protection Agreement (Westport Finance Co), Control Severance Protection Agreement (Westport Finance Co)
Gross-Up Payment. (A) Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any Payments would be subject to the Excise Tax or any interest or penalties are incurred, and it is determined that the Payments should not be reduced pursuant to subsection 5(d), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes, employment taxes (and any interest and penalties imposed with respect thereto) and Excise Taxes imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (B) All determinations required to be made under Section C.1. this subsection 5(d)(iii), including whether and Section C.2. when a Gross-Up Payment is required and the amount of this Exhibit such Gross-up Payment and the assumptions to be utilized in arriving at such determination, shall be made without regard by the Accountants, who shall provide detailed supporting calculations both to whether the deductibility Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such payments earlier time as is requested by the Company. All fees and expenses of the Accountants shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this subsection 5(d)(iii), shall be paid by the Company to the Executive within five days of the receipt of the Accountants' determination. Any determination made independently and in good faith by the Accountants shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Sections 280G and 4999 of the Code, at the time of the initial determination by the Accountants hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (or "Underpayment") consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to subsection 5(d)(iii)(C) and the Executive thereafter is required to make a payment of any other payments or benefits Excise Tax, the Accountants shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. (C) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would be limited or precluded require the payment by Section 280G the Company of the Code (“Section 280G”) Gross-Up Payment. Such notification shall be given as soon as practicable but no later than thirty business days after the Executive is informed in writing of such claim and without regard shall apprise the Company of the nature of such claim and the date on which such claim is requested to whether be paid. The Executive shall not pay such payments claim prior to the expiration of the 30- day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any other payments or benefits) would subject Executive payment of taxes with respect to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (1) give the Company any portion of information reasonably requested by the payments or benefits Company relating to or for such claim, (2) take such action in connection with contesting such claim as the benefit of Executive (Company shall reasonably request in writing from time to time, including, but not limited towithout limitation, payments accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (3) cooperate with the Company in good faith in order effectively to contest such claim, and benefits under this Agreement but determined without regard (4) permit the Company to this paragraphparticipate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) constitutes incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an “excess parachute payment” within the meaning of Section 280G after-tax basis, for any Excise Tax or income tax (the aggregate including interest and penalties with respect thereto) imposed as a result of such payments being hereinafter referred to as representation and payment of costs and expenses. Without limitation on the “Excess Parachute Payments”foregoing provisions of this subsection 5(d)(iii), the Company shall promptly control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, further, that if the Company directs the Executive to pay such claim and sue for a rexxxd, the Company shall advance the amount of such payment to the Executive, on an additional amount (interest-free basis and shall indemnify and hold the “grossExecutive harmless, on an after-up payment”) that after reduction for all taxes tax basis, from any Excise Tax or income tax (including but not limited to the Excise Taxinterest or penalties with respect thereto) imposed with respect to such gross-up payment equals the Excise Tax advance or with respect to the Excess Parachute Paymentsany imputed income with respect to such advance; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be any other issue raised by the Internal Revenue Service or any other taxing authority. (D) If, after the receipt by the Executive of an amount advanced by the Company pursuant to subsection 5(d)(iii)(C), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply Company's complying with the requirements of Section 409A subsection 5(d)(iii)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If after the receipt by the Executive of an amount advanced by the Company pursuant to subsection 5(d)(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such payment so that claim and the payment Company does not give rise notify the Executive in writing of its intent to contest such denial of refund prior to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) expiration of the Code (the “Section 409A penalties”); 30 days after such determination, then such advance shall be forgiven and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment canshall not be made required to conform be repaid and the amount of such advance shall offset, to the requirements of Section 409A of the Codeextent thereof, the amount of the grossGross-up payment shall Up Payment required to be determined without regard to any gross-up for the Section 409A penaltiespaid. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability6.
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Samples: Employment Agreement (Pepco Holdings Inc), Employment Agreement (Pepco Holdings Inc)
Gross-Up Payment. Payments (a) To the extent that (i) the grant of the Restricted Shares under Section C.1. and Section C.2. 7 hereof or (ii) the payment of this Exhibit shall be made without regard to whether the deductibility of such payments any Severance Payment (or any other payments payment or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the aggregate of such payments being hereinafter referred to as “Code”)) under Sections 17, 18 and 19 hereof (collectively, the “Excess Parachute Payments”) would be subject to taxes imposed against Executive under the Code (inclusive of any excise tax imposed by Section 4999 of the Code) and any state or local tax code or regulations, if applicable, (collectively, the “Taxes”), then the Company shall promptly pay pay, and Executive will be entitled to Executive receive, an additional amount payment (the “grossGross-up paymentUp Payment”) in an amount such that after reduction for payment by the Executive of all taxes (applicable Taxes including but not limited any Taxes imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax) Taxes imposed by reason of the Payments. For the avoidance of doubt, it is further provided that the Company shall pay all Taxes as a result of any final determination by the Internal Revenue Service that the right of first refusal granted to the Company in the Restricted Stock Agreement does not decrease the value of the Restricted Shares as of the date of the grant to the amount agreed upon by the Company and the Executive. To the extent Executive incurs any interest or penalties with respect to such gross-up payment equals the Excise Tax with respect Taxes (other than interest and penalties due to the Excess Parachute Payments; providedExecutive’s failure to timely make any applicable election, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessaryfile a tax return or pay taxes shown on his return) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penaltiesExpenses”); and further provided, that if, notwithstanding then the immediately preceding proviso, Company shall reimburse Executive for such Expenses within five (5) days after Executive incurs such Expenses. This reimbursement obligation shall remain in effect during the gross-up payment cannot be made to conform to the requirements applicable statute of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard limitations applicable to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect theretoExpenses, and the amount of Expenses eligible for reimbursement during any gross-up payment taxable year of Executive will not affect the amount of Expenses eligible for reimbursement in any other taxable year of Executive. This right to reimbursement is not subject to liquidation or exchange for another benefit. To the extent the reimbursement by the Company of any Expenses is taxable to Executive, such taxable amount shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior subject to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined Gross-Up Payment by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityas provided herein.
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Gross-Up Payment. Payments If Executive becomes entitled to payments in the nature of compensation, including without limitation the Change in Control Payment described in Section 3.6 of the Agreement, all wages and salary, bonuses, severance pay, fringe benefits and the accelerated vesting of options or other equity-based compensation (including any accelerated vesting of options as described in Section 7.2 of the Incentive Plan) that constitute a "parachute payment" under Section C.1. and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Internal Revenue Code of 1986, as amended (“Section 280G”) and without regard to whether such payments (the "Code"), or any other payments or benefits) would subject Executive to successor statute then in effect (collectively, the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute "Aggregate Change in Control Payments”"), then the Company shall promptly pay to Executive an additional amount (the “gross"Gross-up payment”Up Payment") that after reduction for all taxes (including but not limited to Executive at the time specified in the following paragraph. The Gross-Up Payment shall be equal to the amount necessary so that the net amount of the Aggregate Change in Control Payments retained by Executive, after subtracting the parachute excise tax imposed by Section 4999 of the Code, as amended, or any successor statute then in effect (the "Excise Tax"), and after also subtracting all federal, state or local income tax, FICA tax and Excise Tax on the Gross-Up Payment, shall be equal to the net amount of the Aggregate Change in Control Payments that Executive would have retained if no Excise Tax had been imposed and no Gross-Up Payment had been paid. The amount of the Gross-Up Payment shall be determined in good faith by independent accountants or tax counsel selected by the Company and acceptable to Executive, who shall apply the following assumptions: (i) with respect Executive shall be treated as paying federal income taxes at the highest marginal rate in the calendar year in which the Gross-Up Payment is made, and (ii) Executive shall be treated as paying state and local income taxes at the highest marginal rate(s) in the calendar year in which the Gross-Up Payment is made in the locality of Executive's residence as of the effective date of Executive's termination or resignation, net of the maximum reduction in federal income taxes that could be obtained from deducting those state and local taxes. The Gross-Up Payment shall be made within five business days after the effective date of Executive's termination or resignation, provided that if the Gross-Up Payment cannot be determined within that time, the Company shall pay Executive within that time an estimate, determined in good faith by the Company, of the minimum amount of the Gross-Up Payment and shall pay the remainder (plus interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount can be determined but in no event later than the 30th day after the effective date of Executive's termination or resignation. If the estimated payment is more than the amount later determined to such have been due, the excess (plus interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be repaid by Executive within five business days after written demand. If the actual Excise Tax imposed is more than the amount that was taken into account in determining the amount of the Gross-Up Payment, the Company shall make an additional gross-up payment equals in respect of such excess (plus interest at the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of rate provided in Section 409A 1274(b)(2)(B) of the Code, ) at the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined."
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Gross-Up Payment. Payments under Section C.1. In the event any payment or benefit arising in connection with Executive’s services to the Corporation, whether payable pursuant to this Agreement or otherwise, and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (including any payment or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G reason of the Code (“Section 280G”) transaction consummated to that certain Agreement and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 Plan of the Code Merger among Blue Acquisition Group, Inc., Blue Merger Sub Inc. and Del Monte Foods Company, dated as of November 24, 2010 (the “Excise Tax”). If any portion Merger Agreement,” and the consummation of the payments or benefits to or for transactions contemplated thereby, the benefit of Executive “Transactions”) (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraphthe “Payment”) constitutes is an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the aggregate of such payments being hereinafter referred to as the “Excess Parachute PaymentsCode”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited and would be subject to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of excise tax imposed by Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) 4999 of the Code (the “Section 409A penaltiesExcise Tax”), then the Corporation shall pay Executive an additional cash payment (the “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes, including, without limitation, any income and employment taxes and Excise Tax imposed upon the Gross-Up Payment, Executive shall retain an amount equal to the Excise Tax imposed upon the Payment and the Gross-Up Payment; and further providedprovided that, such Gross-Up Payment shall not be paid if the original Payment exceeds the Section 280G excess parachute payment criteria by less than five percent (5%). In the event the Payment exceeds the Section 280G excess parachute payment criteria by less than five percent (5%), then either (i) the Payment shall be reduced to an amount that ifwould result in no portion of the Payment being subject to the Excise Tax, notwithstanding the immediately preceding provisoor (ii), the gross-up payment cannot Payment shall be made to conform to the requirements of Section 409A paid in full, whichever of the Code, the amount of the grossforegoing (i) or (ii) results in a better after-up payment tax position to Executive. The Gross-Up Payment shall be determined without regard subject to and paid net of any gross-up for the Section 409A penaltiesapplicable withholding. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Gross-Up Payment or Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at reasonably determined by the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”)Company after consultation with its legal and tax advisors. Notwithstanding the foregoing, if any Gross-up Payment must be paid to Executive by the Internal Revenue Service shall assert an end of the calendar year next following the calendar year in which the income taxes and Excise Tax liability that is higher than are remitted to the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityapplicable taxing authority.
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Gross-Up Payment. (A) Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any Payments would be subject to the Excise Tax or any interest or penalties are incurred, and it is determined that the Payments should not be reduced pursuant to subsection 5(d), then the Executive shall be entitled to receive an additional payment (a "Gross- Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes, employment taxes (and any interest and penalties imposed with respect thereto) and Excise Taxes imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (B) All determinations required to be made under Section C.1. this subsection 5(d)(iii), including whether and Section C.2. when a Gross-Up Payment is required and the amount of this Exhibit such Gross-up Payment and the assumptions to be utilized in arriving at such determination, shall be made without regard by the Accountants, who shall provide detailed supporting calculations both to whether the deductibility Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such payments earlier time as is requested by the Company. All fees and expenses of the Accountants shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this subsection 5(d)(iii), shall be paid by the Company to the Executive within five days of the receipt of the Accountants' determination. Any determination made independently and in good faith by the Accountants shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Sections 280G and 4999 of the Code, at the time of the initial determination by the Accountants hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (or "Underpayment") consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to subsection 5(d)(iii)(C) and the Executive thereafter is required to make a payment of any other payments or benefits Excise Tax, the Accountants shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. (C) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would be limited or precluded require the payment by Section 280G the Company of the Code (“Section 280G”) Gross- Up Payment. Such notification shall be given as soon as practicable but no later than thirty business days after the Executive is informed in writing of such claim and without regard shall apprise the Company of the nature of such claim and the date on which such claim is requested to whether be paid. The Executive shall not pay such payments claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any other payments or benefits) would subject Executive payment of taxes with respect to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (1) give the Company any portion of information reasonably requested by the payments or benefits Company relating to or for such claim, (2) take such action in connection with contesting such claim as the benefit of Executive (Company shall reasonably request in writing from time to time, including, but not limited towithout limitation, payments accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (3) cooperate with the Company in good faith in order effectively to contest such claim, and benefits under this Agreement but determined without regard (4) permit the Company to this paragraphparticipate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) constitutes incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an “excess parachute payment” within the meaning of Section 280G after-tax basis, for any Excise Tax or income tax (the aggregate including interest and penalties with respect thereto) imposed as a result of such payments being hereinafter referred to as representation and payment of costs and expenses. Without limitation on the “Excess Parachute Payments”foregoing provisions of this subsection 5(d)(iii), the Company shall promptly control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permxxxible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, further, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the axxxnt of such payment to the Executive, on an additional amount (interest-free basis and shall indemnify and hold the “grossExecutive harmless, on an after-up payment”) that after reduction for all taxes tax basis, from any Excise Tax or income tax (including but not limited to the Excise Taxinterest or penalties with respect thereto) imposed with respect to such gross-up payment equals the Excise Tax advance or with respect to the Excess Parachute Paymentsany imputed income with respect to such advance; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be any other issue raised by the Internal Revenue Service or any other taxing authority. (D) If, after the receipt by the Executive of an amount advanced by the Company pursuant to subsection 5(d)(iii)(C), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply Company's complying with the requirements of Section 409A subsection 5(d)(iii)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If after the receipt by the Executive of an amount advanced by the Company pursuant to subsection 5(d)(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such payment so that claim and the payment Company does not give rise notify the Executive in writing of its intent to contest such denial of refund prior to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) expiration of the Code (the “Section 409A penalties”); 30 days after such determination, then such advance shall be forgiven and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment canshall not be made required to conform be repaid and the amount of such advance shall offset, to the requirements of Section 409A of the Codeextent thereof, the amount of the grossGross-up payment shall Up Payment required to be determined without regard to any gross-up for the Section 409A penaltiespaid. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability6.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit In the event that it shall be made without regard to whether determined at any time that the deductibility of such payments payment provided under paragraph 8(d) above (the "Contract Payment") or any other payments payment or benefits to or for distribution by the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive Company to the federal excise Executive (including deemed payments arising from accelerated vesting of stock options) is subject to the tax levied on certain “excess parachute payments” under Section (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code (the “Excise Tax”). If any portion of 1986, as amended, Section 11.5 of the payments Company's 1997 Employee Stock Option Plan or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess similar "parachute payment” within " limitations under any other agreement between the meaning of Section 280G (Company and the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”)Executive that are in effect shall not apply, and the Company shall promptly pay to the Executive an additional amount (the “gross-up payment”"Gross- Up Payment") such that the net amount retained by the Executive, after reduction deduction of any Excise Tax on the Contract Payment and such other Total Payments (as defined below) and any federal and state and local income tax and Excise Tax upon the payment provided for by this paragraph, shall be equal to the Contract Payment and such other Total Payments. For purposes of determining whether any of the payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a change in control of the Company or the Executive's termination of employment, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a change in control of the Company or any corporation affiliated (or which, as a result of the completion of a transaction causing a change in control, will become affiliated) with the Company within the meaning of Section 1504 of the Code (together with the Contract Payment, the "Total Payments") shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all taxes (including but not limited "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to the Executive the Total Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of section 280G(b)(4) of the Code either in their entirety or in excess of the base amount within the meaning of section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of sections 280G(b)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence on the date of determination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of payment of the Gross-Up Payment, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax and/or a federal state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(d) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the payment of the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest payable with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. and Section C.2. If there is a change in ownership or control of MF Global that causes any payment or distribution by any member of the MF Global Group or any other person or entity to you or for your benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Exhibit shall be made Agreement or otherwise, but determined without regard to whether the deductibility of such any additional payments required under this Section 9) (or any other payments or benefits a "Payment") to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under imposed by Section 4999 of the Code (such excise tax, together with any interest or penalties incurred by you with respect to such excise tax, the “"Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”"), the Company then you shall promptly pay be entitled to Executive receive an additional payment (a "Gross-Up Payment") in an amount (the “gross-up payment”) such that after reduction for payment by you of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, you will retain an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if it is determined that you are entitled to a Gross-Up Payment but that the Internal Revenue Service shall assert an Payments would not be subject to the Excise Tax liability if the Payments were reduced by an amount that is higher less than 10% of the Payments, then the Payments will be reduced to the maximum amount that would not result in the imposition of the Excise Tax (the "Safe Harbor Amount"). If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount and none of the Payments is Nonqualified Deferred Compensation, then the reduction shall occur in the manner you elect in writing prior to the date of payment. If any Payment constitutes Nonqualified Deferred Compensation or if any) you fail to elect an order, then the payments to be reduced will be determined by in a manner which has the accounting firmleast economic cost to you and, to the Company shall promptly augment extent the gross-up economic cost is equivalent, will be reduced in the inverse order of when payment would have been made to address such higher Excise Tax liabilityyou, until the reduction is achieved.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. and Section C.2. If there is a change in ownership or control of MF Global that causes any payment or distribution by any member of the MF Global Group or any other person or entity to you or for your benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Exhibit shall be made Agreement or otherwise, but determined without regard to whether the deductibility of such any additional payments required under this Section 9) (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (a “Section 280GPayment”) and without regard to whether such payments (or any other payments or benefits) would be subject Executive to the federal excise tax levied on certain “excess parachute payments” under imposed by Section 4999 of the Code (such excise tax, together with any interest or penalties incurred by you with respect to such excise tax, the “Excise Tax”). If any portion of the payments or benefits , then you shall be entitled to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive receive an additional amount payment (the a “grossGross-up paymentUp Payment”) in an amount such that after reduction for payment by you of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, you will retain an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if it is determined that you are entitled to a Gross-Up Payment but that the Internal Revenue Service shall assert an Payments would not be subject to the Excise Tax liability if the Payments were reduced by an amount that is higher less than 10% of the Payments, then the Payments will be reduced to the maximum amount that would not result in the imposition of the Excise Tax (the “Safe Harbor Amount”). If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount and none of the Payments is Nonqualified Deferred Compensation, then the reduction shall occur in the manner you elect in writing prior to the date of payment. If any Payment constitutes Nonqualified Deferred Compensation or if any) you fail to elect an order, then the payments to be reduced will be determined by in a manner which has the accounting firmleast economic cost to you and, to the Company shall promptly augment extent the gross-up economic cost is equivalent, will be reduced in the inverse order of when payment would have been made to address such higher Excise Tax liabilityyou, until the reduction is achieved.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. (a) Anything in this Agreement to the contrary notwithstanding and Section C.2. of this Exhibit except as set forth below, in the event it shall be made without regard to whether the deductibility of such payments (or determined that any other payments or benefits to or for the benefit of Executive) Payment would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax, then Executive shall be entitled to receive an additional payment (the "Gross-Up Payment") ---------------- in an amount such that, after payment by Executive of all Taxes (and any interest or penalties imposed with respect to such grossTaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to . Notwithstanding the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the foregoing provisions of this Section C.36.4(a), if it shall be determined that Executive is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed one hundred and ten percent (110%) of the Safe Harbor Amount, then except as provided below, no Gross-Up Payment shall be made to Executive and the amounts payable under this Agreement, other than amounts or benefits provided under Article V of this Agreement or pursuant to any other option or equity grants to Executive (the "Subject Payments"), shall be adjusted to the extent necessary reduced ---------------- (but only to the extent necessarynot below zero) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 7.3(a)(ii), unless an alternative method of reduction is elected by Executive, and in any event shall be made in such a manner as to maximize the Value of all Payments actually made to Executive. For purposes of reducing the Payments to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) Safe Harbor Amount, only the Subject Payments shall be reduced. If the reduction of the Code (Subject Payments would not result in a reduction of the “Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreement shall be reduced pursuant to this Section 409A penalties”6.4(a); , and further provided, that if, notwithstanding the immediately preceding proviso, the grossGross-up payment cannot Up Payment shall be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesExecutive. The determination as Company's obligation to whether make Gross-Up Payments under this Section 6.4 shall not be conditioned upon Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount 's Termination of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityEmployment.
Appears in 1 contract
Gross-Up Payment. Payments In the event that any payments to which Xx. XxXxxxxxx ---------------- becomes entitled under Section C.1. and Section C.2. of this Exhibit shall Employment Agreement (the "Agreement Payments") will be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the “Company shall pay to Xx. XxXxxxxxx at the time specified below, an additional amount (the "Gross-Up Payment") such that the net amount retained by Xx. XxXxxxxxx (taking into account the Total Payments (as hereinafter defined) and the Gross-Up Payment), after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the Gross-Up Payment provided for by this Section 15, but before deduction for any federal, state or local income tax on the Total Payments, shall be equal to the "Total Payments," as defined below. Except as otherwise provided below, the Gross-Up Payment or portion thereof provided for in this Section 15 shall be paid not later than the thirtieth (30th) day following payment of any amounts under the Employment Agreement that will be subject to the Excise Tax”; provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than the forty-fifth (45th) day after payment of any amounts under the Employment Agreement that will be subject to the Excise Tax. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to Xx. XxXxxxxxx, payable on the fifth (5th) day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). If For purposes of determining whether any portion of the payments Agreement Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments, accruals, vestings or other compensatory benefits received or to be received by Xx. XxXxxxxxx in connection with a Change in Control of the Company or for the benefit termination of Executive Xx. XxXxxxxxx'x employment (including, but not limited to, payments and benefits under whether pursuant to the terms of this Agreement but determined without regard to this paragraphor any other plan, arrangement, or agreement with the Company, any person whose actions result in a Change in Control of the Company or any person affiliated with the Company or such person (which, together with the Agreement Payments, shall constitute the "Total Payments") constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, in the opinion of tax counsel selected by the Company's independent auditors, such other payments or benefits (in whole or in part) represent reasonable compensation for services actually rendered within the aggregate meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Total Payments and (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) of the Code (after applying clause (i) above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Xx. XxXxxxxxx shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and the applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time the Gross-Up Payment is made, Xx. XxXxxxxxx shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the portion of the Gross-Up Payment being hereinafter referred repaid) if such repayment results in a reduction in Excise Tax and/or a federal, state, and local income tax deduction, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to as exceed the “Excess Parachute Payments”amount taken into account hereunder at the time the Gross-Up Payment is made (including, by reason of any payment, the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes payment in respect of such excess (including but not limited to the Excise Tax) plus any interest payable with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. In the event that the Executive becomes entitled to the severance benefits described in Sections 5(a) and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (5(b) or any other benefits or payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (under this Amended Termination Agreement or any other payments agreement, plan, instrument or benefitsobligation in whatever form of the Company or its subsidiaries or affiliates (other than pursuant to this Section) would including by reason of the accelerated vesting of stock options or restricted stock hereunder or thereunder (together, the “Total Benefits”), and in the event that any of the Total Benefits will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under Code Section 4999 of the Code 4999, including interest, penalties or other excise tax thereon (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to the Executive an additional amount (the “grossGross-up paymentUp Payment”) such that the net amount retained by the Executive, after reduction deduction of any Excise Tax on the Total Benefits and any federal, state and local income tax, Excise Tax and FICA and Medicare withholding taxes upon the payment provided for by this Section, shall be equal to the Total Benefits. For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive’s termination of employment (whether pursuant to the terms of this Amended Termination Agreement or any other agreement, plan or arrangement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all taxes (including but not limited “excess parachute payments” within the meaning the Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel (“Tax Counsel”) with respect to such gross-up payment equals selected by the Excise Tax with respect Company’s independent auditors and acceptable to the Excess Parachute Payments; providedExecutive, that to such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the extent any gross-up payment would be considered “deferred compensation” for purposes meaning of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4280G(b)(4) of the Code in excess of the Base Amount (as defined in the “Section 409A penalties”Code); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment canor are otherwise not be made to conform subject to the requirements of Section 409A of the CodeExcise Tax, (ii) the amount of the gross-up payment Total Benefits which shall be determined without regard treated as subject to any gross-up for the Section 409A penalties. The determination as Excise Tax shall be equal to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the lesser of (A) the total amount of the Total Benefits reduced by the amount of such Total Benefits that in the opinion of Tax Counsel are not parachute payments, or (B) the amount of any Excise Tax owed with respect theretoexcess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of any grossthe Gross-up payment Up Payment, the Executive shall be made deemed to pay federal income taxes at the Companyhighest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s expense residence on the date of termination, net of the reduction in federal income taxes which could be obtained from deduction of such state and local taxes (calculated by PricewaterhouseCoopers LLP or by assuming that any reduction under Section 68 of the Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability state and local income taxes that is higher than the Excise Tax (if any) determined would otherwise be deductible by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityExecutive).
Appears in 1 contract
Gross-Up Payment. Payments In the event that (i) the Employee becomes entitled to the payments provided under Section C.1. and Section C.2. 10.2 of this Exhibit shall be made without regard to whether Agreement (the deductibility of such payments (or "Change in Control Payments") and any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would Change in Control Payments will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”"Code"). If , or any portion of the successor provision, or (ii) any payments or benefits received or to be received by the Employee pursuant to the terms of any other plan, arrangement or agreement (the "Benefit Payments") will be subject to the Excise Tax, the Company shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee, after deduction of any Excise Tax on the Change in Control Payments and the Benefit Payments, and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 10.3, shall be equal to the benefit Change in Control Payments and the Benefit Payments, provided, however, that in determining the amount of Executive the Gross-Up Payment, any Excise Tax on the Change in Control Payments and the Benefit Payments shall be determined using a rate no higher than 20%. For purposes of determining whether any of the Change in Control Payments or the Benefit Payments will be subject to the Excise Tax and the amount of such Excise Tax, (includingi) any payments or benefits received or to be received by the Employee in connection with a change in control of the Company or the Employee's termination of employment (whether pursuant to the terms of this agreement or any other plan, but not limited toarrangement or agreement with the Company, payments and benefits under this Agreement but determined without regard to this paragraphany person whose actions result in change in control or any person affiliated with the Company or such persons) constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to the Employee such payments or benefits (in whole or in part) do not constitute parachute payments, or such excess payments (in whole or in part) represent reasonable compensation for services actually rendered within the aggregate meaning of Section 280G(b)(4) of the Code, (ii) the amount of the Change in Control Payments and the Benefit Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Change in Control Payments and the Benefit Payments or (B) the amount of excess parachute payments within the meaning of Sections 280G(b)(1) and (4) (after applying clause (i), above) and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Employee's residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments being hereinafter referred state and local taxes. In the event that the Excise Tax is subsequently determined to as be less than the “Excess Parachute Payments”amount taken into account hereunder at the time of termination of the Employee's employment, the Employee shall repay to the Company at that time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Employee's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address the Employee in respect of such higher Excise Tax liabilityexcess (plus any interest payable with respect to such excess) at the time that the amount of such excess is finally determined.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. and Section C.2. of In the event that any payment pursuant to this Exhibit shall be made without regard to whether the deductibility of such payments (agreement or any other payments or benefits to or for the benefit of Executive) would agreement will be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986 (“Code”) or any successor or similar provision, the Companies shall pay Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive after deduction of any Excise Tax on such payments (excluding payments pursuant to this paragraph 9), and after deduction for any federal, state and local income tax and Excise Tax upon the payment provided for by this paragraph, shall be equal to the amount of such payments (excluding payments pursuant to this paragraph 9) before payment of any Excise Tax (hereinafter the “Excise Tax Compensation Net Payment”). If For purposes of determining whether any portion of such payments will be subject to the Excise Tax and the amount of such Excise Tax, any payments or benefits received or to be received by Executive in connection with a Change of Control or for the benefit Executive’s termination of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an employment shall be treated as “excess parachute paymentpayments” within the meaning of Section 280G (of the aggregate Code, and all “excess parachute payments” within the meaning of such payments being hereinafter referred to Section 280G of the Code shall be treated as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company’s independent auditors and acceptable to Executive such payments or benefits do not constitute parachute payments or excess parachute payments. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay all federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality in which Executive is taxed on the payments giving rise to the Gross-Up Payment, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder, Executive shall repay to the Companies, at the time that the amount of such reduction in Excise Tax is finally determined, an amount necessary so that the total payments hereunder equal the Excise Tax Compensation Net Payment, plus interest on the amount of such repayment at a rate equivalent to the rate described in Section 280G (d) (4) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder, the Companies shall make an additional Gross-Up Payment in respect of such excess (plus any interest payable with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such paymentsexcess is finally determined. The Gross-Up Payment shall be paid not later than the date on which the payments giving rise to the Gross-Up Payment are made, or, if and to the extent such payment is not known or calculable as of such date, as soon as the amount of any Excise Tax owed with respect thereto, is known and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilitycalculable.
Appears in 1 contract
Samples: Employment Agreement (DPL Inc)
Gross-Up Payment. Whether or not the Executive becomes entitled to the payment provided under subsection (d) hereof, if any of the Total Payments under Section C.1. (as hereinafter defined) will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), the Company shall pay to the Executive, no later than the fifth day following the Date of Termination (or such other date as is hereinafter described), an additional amount (the "Gross-Up Payment") such that the net amount retained by him, after deduction of any Excise Tax on the Total Payments and Section C.2. of this Exhibit any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be made without regard equal to the Total Payments. For purposes of determining whether any of the deductibility Total Payments will be subject to the Excise Tax and the amount of such payments Excise Tax, (or any other i) all payments or benefits received or to be received by the Executive in connection with a Change in Control or for the benefit termination of the Executive's employment (whether payable pursuant to the terms of this Agreement or of any other plan, arrangement or agreement with the Company, its successors, any person whose actions 8 result in a change in control or any person affiliated (or which, as a result of the completion of the transactions causing a Change in Control, will become affiliated) would be limited with the Company or precluded by Section 280G such person within the meaning of section 1504 of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to , excluding the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (includingGross-Up Payments, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute "Total Payments”")) shall be treated as "parachute payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by the independent auditors of the Company (as of the date immediately prior to the Change in Control) and reasonably acceptable to the Executive, such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" (within the meaning of section 280G(b)(1) of the Code) shall be treated as subject to the Excise Tax, unless in the opinion of such tax counsel such excess parachute payments represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of the "base amount" (within the meaning of section 280G(b)(3) of the Code), or are not otherwise subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income and employment taxes at the highest marginal rate of taxation in the state and locality of the residence of the Executive on the Date of Termination (or such other date as is hereinafter described), net of the maximum reduction in federal income taxes that could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the Date of Termination (or such other date as is hereinafter described), the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income and employment taxes imposed on the Gross-Up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax or a federal, state and local income and employment taxes deduction) plus interest on the amount of such repayment at 120% of the applicable federal rate (as defined in section 1274(d) of the Code). In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the employment of the Executive, or at such other time as is hereinafter described (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes payment in respect of such excess (including but not limited to the Excise Tax) plus any interest payable with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such paymentsexcess is finally determined. If an Executive who remains in the employ of the Company becomes entitled to the payment provided for by this paragraph, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up such payment shall be made at no later than the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as later of (x) the Committee may designate prior fifth day following the date on which the Executive notifies the Company that he is subject to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax and (if anyy) determined by ten days prior to the accounting firm, date on which the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.is initially due. (f)
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. and Section C.2. (A) In the event that any payment or benefit received or to be received by the Executive (whether pursuant to the terms of this Exhibit shall be made without regard to whether the deductibility of such payments (Agreement or any other payments or benefits to or for the benefit of Executiveotherwise) would be limited subject (in whole, or precluded part), to the tax (the "Excise Tax") imposed by Section section 280G of the Internal Revenue Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code 1986 (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive "Code") (including, but not limited to, all such payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute called "Total Payments”"), the Company shall promptly pay to the Executive an additional amount (the “gross"Gross-up payment”Up Payment") such that the net amount retained by the Executive, after reduction deduction of any Excise Tax on the Total Payments and any federal, state and local income or employment taxes and Excise Tax upon the payment provided for by this Section 5, shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any payments or benefits received or to be received by the Executive (whether pursuant to the terms of this Agreement or otherwise) in connection with a "change" described in section 280G(b)(2)(A)(i) of the Code or the Executive's termination of employment shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all taxes (including but not limited "excess parachute payments" within the meaning of section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and reasonably acceptable to the Executive such other payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the amount of excess parachute payments within the meaning of section 280G(b)(1) of the Code (after applying clause (i) above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence on the date of the termination of the Executive's employment (or if there is no such termination, then the date on which the Gross-Up Payment is calculated for purposes of this Section 5(A)), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder in calculating the Gross-Up Payment, the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income and employment taxes imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount initially taken into account hereunder (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such gross-up payment equals excess) at the time that the amount of such excess is finally determined. The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Excess Parachute Total Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.
Appears in 1 contract
Samples: Senior Executive Retention Agreement (Houghton Mifflin Co)
Gross-Up Payment. Payments under The term "Gross Up Payment" as used in this Agreement shall mean a payment to or on behalf of Employee which shall be sufficient to pay (1) 100% of any excise tax described in this Section C.18.05, (2) 100% of any federal, state and local income tax and social security and other employment tax on the payment made to pay such excise tax as well as any additional taxes on such payment and (3) 100% of any interest or penalties assessed by the Internal Revenue Service on Employee which are related to the timely payment of such excise tax (unless such interest or penalties are attributable to Employee's willful misconduct or gross negligence with respect to such timely payment). and Section C.2. of this Exhibit A Gross Up Payment shall be made without regard by the Company promptly after either the Company or the Company's independent accountants determine that any payments and benefits called for under this Employment Agreement together with any other payments and benefits made available to whether Employee by the deductibility Company and any other person will result in Employee being subject to an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (which shall be referred to in this Section 8.05 as the "Code") or such an excise tax is assessed against Employee as a result of any such payments and other benefits if Employee takes such action (other than waiving Employee's right to any payments or benefits in excess of the payments or benefits which Executive has expressly agreed to waive under this Section 8.05) as the Company reasonably requests under the circumstances to mitigate or challenge such excise tax; provided, however, if the Company or the Company's independent accountants make the determination described in this Section 8.05 and, further, determine that Employee will not be subject to any such excise tax if Employee waives Employee's right to receive a part of such payments (or any other benefits and such part does not exceed Employee's Initials: ------------------- 6 $10,000, Employee shall irrevocably waive Employee's right to receive such part if an independent accountant or lawyer retained by Employee and paid by the Company agrees with the determination made by the Company or the Company's independent accountants with respect to the effect of such reduction in payments or benefits to or for the benefit of Executive) would benefits. Any determinations under this Section 8.05 shall be limited or precluded by made in accordance with Section 280G of the Code and any applicable related regulations (“Section 280G”whether proposed, temporary or final) and without regard any related Internal Revenue Service rulings and any related case law and, if the Company reasonably requests that Employee take action to whether mitigate or challenge, or to mitigate and challenge, any such payments tax or assessment (or other than waiving Employee's right to any other payments or benefits) would subject Executive to the federal excise tax levied on certain “benefits in excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits which Employee has expressly agreed to or for the benefit of Executive (including, but not limited to, payments and benefits waive under this Agreement but determined without regard to this paragraphSection 8.05) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of and Employee complies with such payments being hereinafter referred to as the “Excess Parachute Payments”)request, the Company shall promptly provide Employee with such information and such expert advice and assistance from the Company's independent accountants, lawyers and other advisors as Employee may reasonably request and shall pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to expenses incurred in effecting such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; providedcompliance and any related fines, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Codepenalties, the manner interest and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityassessments.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit In the event it shall be made without regard to whether the deductibility determined that any paxxxxx xx distribution of such payments (or any other payments or benefits type to or for the benefit of Executive) would be limited the Employee, by Westport, any Affiliate, any person who acquires ownership or precluded by Section 280G effective control of the Code (“Section 280G”) and without regard to whether such payments (Westport or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 ownership of the Code (the “Excise Tax”). If any a substantial portion of the payments or benefits to or for the benefit of Executive Westport's assets (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G of the Code and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the aggregate "Total Payments"), is or will be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such payments being hereinafter excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excess Parachute Payments”"Excise Tax"), then the Company Employee shall promptly pay be entitled to Executive receive an additional payment (a "Gross-Up Payment") in an amount (the “gross-up payment”) such that after reduction for payment by the Employee of all taxes (including but not limited to the Excise Tax) any interest or penalties imposed with respect to such grosstaxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-up payment equals Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax with respect imposed upon the Total Payments. Notwithstanding the foregoing provisions of this Section 6(a), if it shall be determined that the Employee is entitled to a Gross-Up Payment, but that the Total Payments would not be subject to the Excess Parachute Payments; provided, Excise Tax if the Total Payments were reduced by an amount that to is less than 10% of the extent any gross-up payment portion of the Total Payments that would be considered “deferred compensation” for purposes of treated as "parachute payments" under Section 409A 280G of the Code, then the manner and time of payment, and amounts payable to the provisions of Employee under this Section C.3, Agreement shall be adjusted reduced to the extent necessary (but only maximum amount that could be paid to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give Employee without giving rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to the Employee. The reduction of the amounts payable hereunder, if any) determined applicable, shall be made by reducing first the payment under Section 4(a), unless an alternative method of reduction is elected by the accounting firmEmployee. For purposes of reducing the Total Payments to the Safe Harbor Cap, the Company only amounts payable under this Agreement (and no other amounts) shall promptly augment the gross-up payment to address such higher Excise Tax liabilitybe reduced.
Appears in 1 contract
Samples: Control Severance Protection Agreement (Westport Resources Corp /Nv/)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit (a) In the event it shall be made without regard to whether the deductibility determined that any payment or distribution of such payments (or any other payments or benefits type to or for the benefit of the Executive, by the Employer, the Corporation, any Affiliate, any Person (as defined in Section 17.6(a) would be limited hereof) who acquires ownership or precluded by Section 280G effective control of the Code (“Section 280G”) and without regard to whether such payments (Corporation or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 ownership of the Code (the “Excise Tax”). If any a substantial portion of the payments or benefits to or for the benefit of Executive Corporation’s assets (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G of the Code and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or under any other plan, program, policy or arrangement of the Corporation, the Employer or any of their Affiliates (the aggregate “Total Payments”), is or will be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such payments being hereinafter excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excess Parachute PaymentsExcise Tax”), then the Company Executive shall promptly pay be entitled to Executive receive an additional amount payment (the a “grossGross-up paymentUp Payment”) in an amount such that after reduction for payment by the Executive of all taxes (including but any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. Notwithstanding the immediately preceding paragraph, in the event that a reduction to the Total Payments in respect of the Executive of 10% or less would cause no Excise Tax to be payable, the Executive will not limited be entitled to a Gross-Up Payment and the Total Payments shall be reduced to the extent necessary so that the Total Payments shall not be subject to the Excise Tax) with respect to such gross-up payment equals . Unless the Excise Tax with respect Executive shall have given prior written notice to the Excess Parachute Payments; providedEmployer specifying a different order by which to effectuate the foregoing, the Employer shall reduce or eliminate the Total Payments (x) by first reducing or eliminating the portion of the Total Payments which are not payable in cash (other than that portion of the Total Payments subject to clause (z) hereof), (y) then by reducing or eliminating cash payments (other than that portion of the Total Payments subject to clause (z) hereof) and (z) then by reducing or eliminating the portion of the Total Payments (whether payable in cash or not payable in cash) to which Treasury Regulation Section 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the date of the Change in Control. Any notice given by the Executive pursuant to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and preceding sentence shall take precedence over the provisions of this Section C.3any other plan, shall be adjusted to arrangement or agreement governing the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); Executive’s rights and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard entitlements to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilitycompensation.
Appears in 1 contract
Samples: Change in Control Severance Agreement (Community Health Systems Inc)
Gross-Up Payment. Payments In the event that any payments to which Xx. XxXxxxxxx becomes entitled under Section C.1. and Section C.2. of this Exhibit shall Employment Agreement (the "Agreement Payments") will be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the “Company shall pay to Xx. XxXxxxxxx at the time specified below, an additional amount (the "Gross-Up Payment") such that the net amount retained by Xx. XxXxxxxxx (taking into account the Total Payments (as hereinafter defined) and the Gross-Up Payment), after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the Gross-Up Payment provided for by this Section 15, but before deduction for any federal, state or local income tax on the Total Payments, shall be equal to the "Total Payments," as defined below. Except as otherwise provided below, the Gross-Up Payment or portion thereof provided for in this Section 15 shall be paid not later than the thirtieth (30th) day following payment of any amounts under the Employment Agreement that will be subject to the Excise Tax”; provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than the forty-fifth (45th) day after payment of any amounts under the Employment Agreement that will be subject to the Excise Tax. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to Xx. XxXxxxxxx, payable on the fifth (5th) day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). If For purposes of determining whether any portion of the payments Agreement Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments, accruals, vestings or other compensatory benefits received or to be received by Xx. XxXxxxxxx in connection with a Change in Control of the Company or for the benefit termination of Executive Xx. XxXxxxxxx' employment (including, but not limited to, payments and benefits under whether pursuant to the terms of this Agreement but determined without regard to this paragraphor any other plan, arrangement or agreement with the Company, any person whose actions result in a Change in Control of the Company or any person affiliated with the Company or such person (which, together with the Agreement Payments, shall constitute the "Total Payments") constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b((1) of the Code shall be treated as subject to the Excise Tax, unless, in the opinion of tax counsel selected by the Company's independent auditors, such other payments or benefits (in whole or in part) represent reasonable compensation for services actually rendered within the aggregate meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Total Payments, or (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) of the Code (after applying clause (i) above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Xx. XxXxxxxxx shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and the applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time the Gross-Up Payment is made, Xx. XxXxxxxxx shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the portion of the Gross-Up Payment being hereinafter referred repaid) if such repayment results in a reduction in Excise Tax and/or a federal, state and local income tax deduction, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to as exceed the “Excess Parachute Payments”amount taken into account hereunder at the time the Gross-Up Payment is made (including, by reason of any payment, the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes payment in respect of such excess (including but not limited to the Excise Tax) plus any interest payable with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined.
Appears in 1 contract
Samples: Employment Agreement (Food Lion Inc)
Gross-Up Payment. Payments under Notwithstanding any other provision of any other plan, arrangement or agreement to the contrary, including, without limitation, the Plan, subject only to Section C.1. and Section C.2. of this Exhibit 4(b)(i) below, if it shall be made without regard to whether the deductibility of such payments determined that any Payment (or any other payments or benefits to or for the benefit of Executiveas defined below) would will be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code Excise Tax (as defined below), then you shall be entitled to receive an additional cash payment (the “Excise TaxGross-Up Payment”). If any portion ) equal to the sum of the payments Excise Tax payable with respect to any Gross-Up Eligible Payment (as defined below) by you plus an amount such that, after payment by you of all taxes (and any interest or benefits penalties imposed with respect to such taxes), including without limitation, any federal, state, local or for foreign income or employment taxes (and any interest and penalties imposed with respect thereto) on the benefit of Executive (includingGross-Up Payment and the Excise Tax imposed upon the Gross-Up Payment, but excluding any income taxes and penalties imposed on the Gross-Up Eligible Payment itself, you retain an amount of the Gross-Up Payment such that you are in the same after-tax position with respect to the Gross-Up Eligible Payment as if the Excise Tax had not limited to, payments been imposed. For purposes of determining the amount of the Gross-Up Payment (and benefits under this Agreement but determined without regard to this paragraph) constitutes the amount of the Gross-Up Eligible Payment that is an “excess parachute payment” within the meaning of Q&A 38 of Treasury Regulation Section 280G (1.280G-1 and therefore determining what portion of the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “grossGross-up payment”) that after reduction for all taxes (including but not limited Up Eligible Payment is subject to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect ), notwithstanding anything to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of contrary contained in Section 409A 280G of the Code, your “base amount” (within the manner meaning of Section 280G of the Code) first shall be allocated to any Payments to you that are not Gross-Up Eligible Payments (and time of payment, not otherwise eligible for a tax gross-up under any other agreement between you and the provisions of this Section C.3Company or any Parent, shall be adjusted to the extent necessary (but only to the extent necessarySubsidiary or an affiliate thereof) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penaltiesNon-Gross-Up Eligible Payments”); and further provided) and, that if, notwithstanding only after the immediately preceding proviso, the grossexhaustion of such Non-up payment cannot Gross-Up Eligible Payments shall any portion of your base amount be made to conform allocated to the requirements of Section 409A of Gross-Up Eligible Payment. This analysis in the Code, the amount of the gross-up payment preceding sentence shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to recalculated each time a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityPayment becomes determinable.
Appears in 1 contract
Gross-Up Payment. Payments (a) To the extent that (i) the grant of the Restricted Shares under Section C.1. and Section C.2. 7 hereof or (ii) the payment of this Exhibit shall be made without regard to whether the deductibility of such payments any Severance Payment (or any other payments payment or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the aggregate of such payments being hereinafter referred to as “Code”)) under this Agreement (collectively, the “Excess Parachute Payments”) would be subject to taxes imposed against Executive under the Code (including any excise tax imposed by Section 4999 of the Code) and any state or local tax code or regulations, if applicable, (collectively, the “Taxes”), then the Company shall promptly pay pay, and Executive will be entitled to Executive receive, an additional amount payment (the “grossGross-up paymentUp Payment”) in an amount such that after reduction for payment by the Executive of all taxes (applicable Taxes including but not limited any Taxes imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax) Taxes imposed by reason of the Payments. For the avoidance of doubt, it is further provided that the Company shall pay all Taxes as a result of any final determination by the Internal Revenue Service that the right of first refusal granted to the Company in the Restricted Stock Agreement does not decrease the value of the Restricted Shares as of the date of the grant to the amount agreed upon by the Company and the Executive. To the extent Executive incurs any interest or penalties with respect to such gross-up payment equals the Excise Tax with respect Taxes (other than interest and penalties due to the Excess Parachute Payments; providedExecutive’s failure to timely make any applicable election, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessaryfile a tax return or pay taxes shown on his return) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penaltiesExpenses”); and further provided, that if, notwithstanding then the immediately preceding proviso, Company shall reimburse Executive for such Expenses within five (5) days after Executive incurs such Expenses. This reimbursement obligation shall remain in effect during the gross-up payment cannot be made to conform to the requirements applicable statute of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard limitations applicable to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect theretoExpenses, and the amount of Expenses eligible for reimbursement during any gross-up payment taxable year of Executive will not affect the amount of Expenses eligible for reimbursement in any other taxable year of Executive. This right to reimbursement is not subject to liquidation or exchange for another benefit. To the extent the reimbursement by the Company of any Expenses is taxable to Executive, such taxable amount shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior subject to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined Gross-Up Payment by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityas provided herein.
Appears in 1 contract
Gross-Up Payment. Whether or not the Executive becomes entitled to the payment provided under subsection (d) hereof, if any of the Total Payments under Section C.1. (as hereinafter defined) will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), the Company shall pay to the Executive, no later than the fifth day following the Date of Termination (or such other date as is hereinafter described), an additional amount (the "Gross-Up Payment") such that the net amount retained by him, after deduction of any Excise Tax on the Total Payments and Section C.2. of this Exhibit any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be made without regard equal to the Total Payments. For purposes of determining whether any of the deductibility Total Payments will be subject to the Excise Tax and the amount of such payments Excise Tax, (or any other i) all payments or benefits received or to be received by the Executive in connection with a Change in Control or for the benefit termination of the Executive's employment (whether payable pursuant to the terms of this Agreement or of any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a change in control or any person affiliated (or which, as a result of the completion of the transactions causing a Change in Control, will become affiliated) would be limited with the Company or precluded by Section 280G such person within the meaning of section 1504 of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to , excluding the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (includingGross-Up Payments, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute "Total Payments”")) shall be treated as "parachute payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by the independent auditors of the Company (as of the date immediately prior to the Change in Control) and reasonably acceptable to the Executive, such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" (within the meaning of section 280G(b)(1) of the Code) shall be treated as subject to the Excise Tax, unless in the opinion of such tax counsel such excess parachute payments represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of the "base amount" (within the meaning of section 280G(b)(3) of the Code), or are not otherwise subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income and employment taxes at the highest marginal rate of taxation in the state and locality of the residence of the Executive on the Date of Termination (or such other date as is hereinafter described), net of the maximum reduction in federal income taxes that could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the Date of Termination (or such other date as is hereinafter described), the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income and employment taxes imposed on the Gross-Up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax or a federal, state and local income and employment taxes deduction) plus interest on the amount of such repayment at 120% of the applicable federal rate (as defined in section 1274(d) of the Code). In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the employment of the Executive, or at such other time as is hereinafter described (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with in respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.such
Appears in 1 contract
Samples: Employment Agreement (Ust Inc)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“"Section 280G”") and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “"excess parachute payments” " under Section 4999 of the Code (the “"Excise Tax”"). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “"excess parachute payment” " within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “"Excess Parachute Payments”"), the Company shall promptly pay to Executive an additional amount (the “"gross-up payment”") that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s 's payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s 's expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “"accounting firm”"). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. (a) Anything in this Agreement to the contrary notwithstanding and Section C.2. of this Exhibit except as set forth below, in the event it shall be made without regard to whether the deductibility of such payments (or determined that any other payments or benefits to or for the benefit of Executive) Payment would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax, then Executive shall be entitled to receive an additional payment (the "Gross-Up Payment") ---------------- in an amount such that, after payment by Executive of all Taxes (and any interest or penalties imposed with respect to such grossTaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to . Notwithstanding the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the foregoing provisions of this Section C.36.4(a), if it shall be determined that Executive is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed one hundred and ten percent (110%) of the Safe Harbor Amount, then except as provided below, no Gross-Up Payment shall be made to Executive and the amounts payable under this Agreement, other than amounts or benefits provided under Article V of this Agreement or pursuant to any other option or equity grants to Executive (the "Subject Payments"), shall be adjusted to the extent necessary reduced (but only to the extent necessarynot below zero) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise ---------------- Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 7.3(a)(ii), unless an alternative method of reduction is elected by Executive, and in any event shall be made in such a manner as to maximize the Value of all Payments actually made to Executive. For purposes of reducing the Payments to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) Safe Harbor Amount, only the Subject Payments shall be reduced. If the reduction of the Code (Subject Payments would not result in a reduction of the “Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreement shall be reduced pursuant to this Section 409A penalties”6.4(a); , and further provided, that if, notwithstanding the immediately preceding proviso, the grossGross-up payment cannot Up Payment shall be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesExecutive. The determination as Debtor's or the Reorganized Entity's obligation to whether make Gross-Up Payments under this Section 6.4 shall not be conditioned upon Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount 's Termination of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityEmployment.
Appears in 1 contract
Gross-Up Payment. Payments In the event that (i) the Employee becomes entitled to the payments provided under Section C.1. and Section C.2. 10.2 of this Exhibit shall be made without regard to whether Agreement (the deductibility of such payments (or "Change in Control Payments") and any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would Change in Control Payments will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Code Internal Revenue of 1986, as amended (the “Excise Tax”"Code"). If , or any portion of the successor provision, or (ii) any payments or benefits received or to be received by the Employee pursuant to the terms of any other plan, arrangement or agreement (the "Benefit Payments") will be subject to the Excise Tax, the Company shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee, after deduction of any Excise Tax on the Change in Control Payments and the Benefit Payments, and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 10.3, shall be equal to the benefit Change in Control Payments and the Benefit Payments, provided, however, that in determining the amount of Executive the Gross-Up Payment, any Excise Tax on the Change in Control Payments and the Benefit Payments shall be determined using a rate no higher than 20%. For purposes of determining whether any of the Change in Control Payments or the Benefit Payments will be subject to the Excise Tax and the amount of such Excise Tax, (includingi) any payments or benefits received or to be received by the Employee in connection with a change in control of the Company or the Employee's termination of employment (whether pursuant to the terms of this agreement or any other plan, but not limited toarrangement or agreement with the Company, payments and benefits under this Agreement but determined without regard to this paragraphany person whose actions result in change in control or any person affiliated with the Company or such persons) constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b) (2) of the aggregate Code, and all "excess parachute payments" within the meaning of such payments being hereinafter referred to Section 280G(b) (1) shall be treated as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited subject to the Excise Tax) with respect to such gross-up payment equals , unless in the Excise Tax with respect opinion of tax counsel selected by the Company's independent auditors and acceptable to the Excess Parachute Payments; providedEmployee such payments or benefits (in whole or in part) do not constitute parachute payments, that to or such excess payments (in whole or in part) represent reasonable compensation for services actually rendered within the extent any gross-up payment would be considered “deferred compensation” for purposes meaning of Section 409A 280G(b) (4) of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessaryii) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the grossChange in Control Payments and the Benefit Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Change in Control Payments and the Benefit Payments or (B) the amount of excess parachute payments within the meaning of Sections 280G(b)(1) and (4) (after applying clause (i), above) and (iii) the value of any non-up cash benefits or any deferred payment or benefit shall be determined without regard to any gross-up for by the Section 409A penaltiesCompany's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, For purposes of determining the amount of such paymentsthe Gross-Up Payment, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment Employee shall be made deemed to pay federal income taxes at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change highest marginal rate of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.federal
Appears in 1 contract
Gross-Up Payment. Payments In the event that (i) the Employee becomes entitled to the payments provided under Section C.1. and Section C.2. 10.2 of this Exhibit shall be made without regard to whether Agreement (the deductibility of such payments (or "Change in Control Payments") and any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would Change in Control Payments will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”"Code"). If , or any portion of the successor provision, or (ii) any payments or benefits received or to be received by the Employee pursuant to the terms of any other plan, arrangement or agreement (the "Benefit Payments") will be subject to the Excise Tax, the Company shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee, after deduction of any Excise Tax on the Change in Control Payments and the Benefit Payments, and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 10.3, shall be equal to the benefit Change in Control Payments and the Benefit Payments, provided, however, that in determining the amount of Executive the Gross-Up Payment, any Excise Tax on the Change in Control Payments and the Benefit Payments shall be determined using a rate no higher than 20%. For purposes of determining whether any of the Change in Control Payments or the Benefit Payments will be subject to the Excise Tax and the amount of such Excise Tax, (includingi) any payments or benefits received or to be received by the Employee in connection with a change in control of the Company or the Employee's termination of employment (whether pursuant to the terms of this agreement or any other plan, but not limited toarrangement or agreement with the Company, payments and benefits under this Agreement but determined without regard to this paragraphany person whose actions result in change in control or any person affiliated with the Company or such persons) constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b) (2) of the aggregate Code, and all "excess parachute payments" within the meaning of Section 280G(b) (1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to the Employee such payments or benefits (in whole or in part) do not constitute parachute payments, or such excess payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b) (4) of the Code, (ii) the amount of the Change in Control Payments and the Benefit Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Change in Control Payments and the Benefit Payments or (B) the amount of excess parachute payments within the meaning of Sections 280G(b)(1) and (4) (after applying clause (i), above) and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Section 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates or taxation in the state and locality of the Employee's residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments being hereinafter referred state and local taxes. In the event that the Excise Tax is subsequently determined to as be less than the “Excess Parachute Payments”amount taken into account hereunder at the time of termination of the Employee's employment, the Employee shall repay to the Company at that time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Employee's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address the Employee in respect of such higher Excise Tax liabilityexcess (plus any interest payable with respect to such excess) at the time that the amount of such excess is finally determined.
Appears in 1 contract
Gross-Up Payment. Payments under The term "Gross Up Payment" as used in this Agreement shall mean a payment to or on behalf of Employee which shall be sufficient to pay (1) 100% of any excise tax described in this Section C.111, (2) 100% of any federal, state and local income tax and social security and other employment tax on the payment made to pay such excise tax as well as any additional taxes on such payment and (3) 100% of any interest or penalties assessed by the Internal Revenue Service on Employee which are related to the timely payment of such excise tax (unless such interest or penalties are attributable to Employee's willful misconduct or gross negligence with respect to such timely payment). and Section C.2. of this Exhibit A Gross Up Payment shall be made without regard by the Company promptly after either the Company or the Company's independent accountants determine that any payments and benefits called for under this Employment Agreement together with any other payments and benefits made available to whether Employee by the deductibility Company and any other person will result in Employee being subject to an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (which shall be referred to in this Section 11 as the "Code") or such an excise tax is assessed against Employee as a result of any such payments and other benefits if Employee takes such action (other than waiving Employee's right to any payments or benefits in excess of the payments or benefits which Executive has expressly agreed to waive under this Section 11) as the Company reasonably requests under the circumstances to mitigate or challenge such excise tax; provided, however, if the Company or the Company's independent accountants make the determination described in this Section 11 and, further, determine that Employee's Initials: 9 --------------- Employee will not be subject to any such excise tax if Employee waives Employee's right to receive a part of such payments (or any other benefits and such part does not exceed $10,000, Employee shall irrevocably waive Employee's right to receive such part if an independent accountant or lawyer retained by Employee and paid by the Company agrees with the determination made by the Company or the Company's independent accountants with respect to the effect of such reduction in payments or benefits to or for the benefit of Executive) would benefits. Any determinations under this Section 11 shall be limited or precluded by made in accordance with Section 280G of the Code and any applicable related regulations (“Section 280G”whether proposed, temporary or final) and without regard any related Internal Revenue Service rulings and any related case law and, if the Company reasonably requests that Employee take action to whether mitigate or challenge, or to mitigate and challenge, any such payments tax or assessment (or other than waiving Employee's right to any other payments or benefits) would subject Executive to the federal excise tax levied on certain “benefits in excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits which Employee has expressly agreed to or for the benefit of Executive (including, but not limited to, payments and benefits waive under this Agreement but determined without regard to this paragraphSection 11) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of and Employee complies with such payments being hereinafter referred to as the “Excess Parachute Payments”)request, the Company shall promptly provide Employee with such information and such expert advice and assistance from the Company's independent accountants, lawyers and other advisors as Employee may reasonably request and shall pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to expenses incurred in effecting such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; providedcompliance and any related fines, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Codepenalties, the manner interest and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityassessments.
Appears in 1 contract
Gross-Up Payment. Payments In the event that any payments to which Xx. XxXxxxxxx becomes entitled under Section C.1. and Section C.2. of this Exhibit shall Employment Agreement (the "Agreement Payments") will be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Code (or any similar tax that may hereafter be imposed), the “Company shall pay to Xx. XxXxxxxxx at the time specified below, an additional amount (the "Gross-Up Payment") such that the net amount retained by Xx. XxXxxxxxx (taking into account the Total Payments (as hereinafter defined) and the Gross-Up Payment), after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the Gross-Up Payment provided for by this Section 15, but before deduction for any federal, state or local income tax on the Total Payments, shall be equal to the "Total Payments," as defined below. Except as otherwise provided below, the Gross-Up Payment or portion thereof provided for in this Section 15 shall be paid not later than the thirtieth (30th) day following payment of any amounts under the Employment Agreement that will be subject to the Excise Tax”; provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than the forty-fifth (45th) day after payment of any amounts under the Employment Agreement that will be subject to the Excise Tax. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to Xx. XxXxxxxxx, payable on the fifth (5th) day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). If For purposes of determining whether any portion of the payments Agreement Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments, accruals, vestings or other compensatory benefits received or to be received by Xx. XxXxxxxxx in connection with a Change in Control of the Company or for the benefit termination of Executive Xx. XxXxxxxxx'x employment (including, but not limited to, payments and benefits under whether pursuant to the terms of this Agreement but determined without regard to this paragraphor any other plan, arrangement, or agreement with the Company, any person whose actions result in a Change in Control of the Company or any person affiliated with the Company or such person (which, together with the Agreement Payments, shall constitute the "Total Payments") constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, in the opinion of tax counsel selected by the Company's independent auditors, such other payments or benefits (in whole or in part) represent reasonable compensation for services actually rendered within the aggregate meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Total Payments and (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) of the Code (after applying clause (i) above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Xx. XxXxxxxxx shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and the applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such payments state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time the Gross-Up Payment is made, Xx. XxXxxxxxx shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the portion of the Gross-Up Payment being hereinafter referred repaid) if such repayment results in a reduction in Excise Tax and/or a federal, state, and local income tax deduction, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to as exceed the “Excess Parachute Payments”amount taken into account hereunder at the time the Gross-Up Payment is made (including, by reason of any payment, the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall promptly pay to Executive make an additional amount gross- up payment in respect of such excess (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) plus any interest payable with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined.
Appears in 1 contract
Samples: Employment Agreement (Food Lion Inc)
Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax) with respect to such gross-up payment equals the Excise Tax with respect to the Excess Parachute Payments; provided, that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3C.2, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.
Appears in 1 contract
Gross-Up Payment. (A) Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any Payments would be subject to the Excise Tax or any interest or penalties are incurred, and it is determined that the Payments should not be reduced pursuant to subsection 5(d), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes, employment taxes (and any interest and penalties imposed with respect thereto) and Excise Taxes imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (B) All determinations required to be made under Section C.1. this subsection 5(d)(iii), including whether and Section C.2. when a Gross-Up Payment is required and the amount of this Exhibit such Gross-up Payment and the assumptions to be utilized in arriving at such determination, shall be made without regard by the Accountants, who shall provide detailed supporting calculations both to whether the deductibility Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such payments earlier time as is requested by the Company. All fees and expenses of the Accountants shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this subsection 5(d)(iii), shall be paid by the Company to the Executive within five days of the receipt of the Accountants' determination. Any determination made independently and in good faith by the Accountants shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Sections 280G and 4999 of the Code, at the time of the initial determination by the Accountants hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (or "Underpayment") consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to subsection 5(d)(iii)(C) and the Executive thereafter is required to make a payment of any other payments or benefits Excise Tax, the Accountants shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. (C) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would be limited or precluded require the payment by Section 280G the Company of the Code (“Section 280G”) Gross-Up Payment. Such notification shall be given as soon as practicable but no later than thirty business days after the Executive is informed in writing of such claim and without regard shall apprise the Company of the nature of such claim and the date on which such claim is requested to whether be paid. The Executive shall not pay such payments claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any other payments or benefits) would subject Executive payment of taxes with respect to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (1) give the Company any portion of information reasonably requested by the payments or benefits Company relating to or for such claim, (2) take such action in connection with contesting such claim as the benefit of Executive (Company shall reasonably request in writing from time to time, including, but not limited towithout limitation, payments accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (3) cooperate with the Company in good faith in order effectively to contest such claim, and benefits under this Agreement but determined without regard (4) permit the Company to this paragraphparticipate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) constitutes incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an “excess parachute payment” within the meaning of Section 280G after- tax basis, for any Excise Tax or income tax (the aggregate including interest and penalties with respect thereto) imposed as a result of such payments being hereinafter referred to as representation and payment of costs and expenses. Without limitation on the “Excess Parachute Payments”foregoing provisions of this subsection 5(d)(iii), the Company shall promptly control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any xxrmissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, further, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance xxx amount of such payment to the Executive, on an additional amount (interest-free basis and shall indemnify and hold the “grossExecutive harmless, on an after-up payment”) that after reduction for all taxes tax basis, from any Excise Tax or income tax (including but not limited to the Excise Taxinterest or penalties with respect thereto) imposed with respect to such gross-up payment equals the Excise Tax advance or with respect to the Excess Parachute Paymentsany imputed income with respect to such advance; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be any other issue raised by the Internal Revenue Service or any other taxing authority. (D) If, after the receipt by the Executive of an amount advanced by the Company pursuant to subsection 5(d)(iii)(C), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply Company's complying with the requirements of Section 409A subsection 5(d)(iii)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If after the receipt by the Executive of an amount advanced by the Company pursuant to subsection 5(d)(iii), a determination is made that the Executive shall not be entitled to any refund with respect to such payment so that claim and the payment Company does not give rise notify the Executive in writing of its intent to contest such denial of refund prior to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) expiration of the Code (the “Section 409A penalties”); 30 days after such determination, then such advance shall be forgiven and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment canshall not be made required to conform be repaid and the amount of such advance shall offset, to the requirements of Section 409A of the Codeextent thereof, the amount of the grossGross-up payment shall Up Payment required to be determined without regard to any gross-up for the Section 409A penaltiespaid. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability6.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. (a) Anything in this Agreement to the contrary notwithstanding and Section C.2. of this Exhibit except as set forth below, in the event it shall be made without regard to whether the deductibility of such payments (or determined that any other payments or benefits to or for the benefit of Executive) Payment would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax, then Executive shall be entitled to receive an additional payment (the "Gross-Up -------- Payment") in an amount such that, after payment by Executive of all ------- Taxes (and any interest or penalties imposed with respect to such grossTaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to . Notwithstanding the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the foregoing provisions of this Section C.36.4(a), if it shall be determined that Executive is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed one hundred and ten percent (110%) of the Safe Harbor Amount, then except as provided below, no Gross-Up Payment shall be made to Executive and the amounts payable under this Agreement, other than amounts or benefits provided under Article V of this Agreement or pursuant to any other option or equity grants to Executive (the "Subject Payments"), shall be adjusted reduced (but not below zero) so that ---------------- the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 7.3(a)(ii), unless an alternative method of reduction is elected by Executive, and in any event shall be made in such a manner as to maximize the Value of all Payments actually made to Executive. For purposes of reducing the Payments to the extent necessary (but Safe Harbor Amount, only the Subject Payments shall be reduced. If the reduction of the Subject Payments would not result in a reduction of the Parachute Value of all Payments to the extent necessary) Safe Harbor Amount, no amounts payable under the Agreement shall be reduced pursuant to comply with this Section 6.4(a), and the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the grossGross-up payment cannot Up Payment shall be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesExecutive. The determination as Company's obligation to whether make Gross-Up Payments under this Section 6.4 shall not be conditioned upon Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount 's Termination of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityEmployment.
Appears in 1 contract
Gross-Up Payment. Payments under Section C.1. (a) Anything in this Agreement to the contrary notwithstanding and Section C.2. of this Exhibit except as set forth below, in the event it shall be made without regard to whether the deductibility of such payments (or determined that any other payments or benefits to or for the benefit of Executive) Payment would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax, then Executive shall be entitled to receive an additional payment (the "Gross-Up Payment") ---------------- in an amount such that, after payment by Executive of all Taxes (and any interest or penalties imposed with respect to such grossTaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to . Notwithstanding the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the foregoing provisions of this Section C.36.4(a), if it shall be determined that Executive is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed one hundred and ten percent (110%) of the Safe Harbor Amount, then except as provided below, no Gross-Up Payment shall be made to Executive and the amounts payable under this Agreement, other than amounts or benefits provided under Article V of this Agreement or pursuant to any other option or equity grants to Executive (the "Subject Payments"), shall be adjusted to the extent necessary reduced ---------------- (but only to the extent necessarynot below zero) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 7.3(a)(ii), unless an alternative method of reduction is elected by Executive, and in any event shall be made in such a manner as to maximize the Value of all Payments actually made to Executive. For purposes of reducing the Payments to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) Safe Harbor Amount, only the Subject Payments shall be reduced. If the reduction of the Code (Subject Payments would not result in a reduction of the “Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreement shall be reduced pursuant to this Section 409A penalties”6.4(a); , and further provided, that if, notwithstanding the immediately preceding proviso, the grossGross-up payment cannot Up Payment shall be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesExecutive. The determination as Debtor's or the Reorganized Entity's obligation to whether make Gross-Up Payments under this Section 6.4 shall not be conditioned upon Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount 's Termination of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityEmployment.
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Gross-Up Payment. Payments under Section C.1. (a) Anything in this Agreement to the contrary notwithstanding and Section C.2. of this Exhibit except as set forth below, in the event it shall be made without regard to whether the deductibility of such payments (or determined that any other payments or benefits to or for the benefit of Executive) Payment would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax, then Executive shall be entitled to receive an additional payment (the "Gross-Up -------- Payment") in an amount such that, after payment by Executive of all ------- Taxes (and any interest or penalties imposed with respect to such grossTaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to . Notwithstanding the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the foregoing provisions of this Section C.36.4(a), if it shall be determined that Executive is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed one hundred and ten percent (110%) of the Safe Harbor Amount, then except as provided below, no Gross-Up Payment shall be made to Executive and the amounts payable under this Agreement, other than amounts or benefits provided under Article V of this Agreement or pursuant to any other option or equity grants to Executive (the "Subject Payments"), shall be adjusted to the extent necessary reduced (but only to the extent necessarynot below ---------------- zero) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 7.3(a)(ii), unless an alternative method of reduction is elected by Executive, and in any event shall be made in such a manner as to maximize the Value of all Payments actually made to Executive. For purposes of reducing the Payments to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) Safe Harbor Amount, only the Subject Payments shall be reduced. If the reduction of the Code (Subject Payments would not result in a reduction of the “Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreement shall be reduced pursuant to this Section 409A penalties”6.4(a); , and further provided, that if, notwithstanding the immediately preceding proviso, the grossGross-up payment cannot Up Payment shall be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesExecutive. The determination as Company's obligation to whether make Gross-Up Payments under this Section 6.4 shall not be conditioned upon Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount 's Termination of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityEmployment.
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Gross-Up Payment. Payments In the event that (i) the Employee becomes ----------------- entitled to the payments provided under Section C.1. and Section C.2. 10.2 of this Exhibit shall be made without regard to whether Agreement (the deductibility of such payments (or "Change in Control Payments") and any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would Change in Control Payments will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”"Code"). If , or any portion of the successor provision, or (ii) any payments or benefits received or to be received by the Employee pursuant to the terms of any other plan, arrangement or agreement (the "Benefit Payments") will be subject to the Excise Tax, the Company shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee, after deduction of any Excise Tax on the Change in Control Payments and the Benefit Payments, and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 10.3, shall be equal to the benefit Change in Control Payments and the Benefit Payments, provided, however, that in determining the amount of Executive the Gross-Up Payment, any Excise Tax on the Change in control Payments and the Benefit Payments shall be determined using a rate no higher than 20%. For purposes of determining whether any of the Change in Control Payments or the Benefit Payments will be subject to the Excise Tax and the amount of such Excise Tax, (includingi) any payments or benefits received or to be received by the Employee in connection with a change in control of the Company or the Employee's termination of employment (whether pursuant to the terms of this agreement or any other plan, but not limited toarrangement or agreement with the Company, payments and benefits under this Agreement but determined without regard to this paragraphany person whose actions result in change in control or any person affiliated with the Company or such persons) constitutes an “excess shall be treated as "parachute payment” payments" within the meaning of Section 280G 280G(b) (2) of the aggregate Code, and all "excess parachute payments" within the meaning of such payments being hereinafter referred to Section 280G(b) (1) shall be treated as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited subject to the Excise Tax) with respect to such gross-up payment equals , unless in the Excise Tax with respect opinion of tax counsel selected by the Company's independent auditors and acceptable to the Excess Parachute Payments; providedEmployee such payments or benefits (in whole or in part) do not constitute parachute payments, that to or such excess payments (in whole or in part) represent reasonable compensation for services actually rendered within the extent any gross-up payment would be considered “deferred compensation” for purposes meaning of Section 409A 280G(b) (4) of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessaryii) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liability.the
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Gross-Up Payment. Payments under Section C.1. (a) Anything in this Agreement to the contrary notwithstanding and Section C.2. of this Exhibit except as set forth below, in the event it shall be made without regard to whether the deductibility of such payments (or determined that any other payments or benefits to or for the benefit of Executive) Payment would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax, then Executive shall be entitled to receive an additional payment (the "Gross-Up Payment") ---------------- in an amount such that, after payment by Executive of all Taxes (and any interest or penalties imposed with respect to such grossTaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to . Notwithstanding the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the foregoing provisions of this Section C.36.4(a), if it shall be determined that Executive is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then except as provided below, no Gross-Up Payment shall be made to Executive and the amounts payable under this Agreement, other than amounts or benefits provided under Article V of this Agreement or pursuant to any other option or equity grants to Executive (the "Subject Payments"), shall be adjusted to the extent necessary reduced (but only to the extent necessarynot below ---------------- zero) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 7.3(a)(ii), unless an alternative method of reduction is elected by Executive, and in any event shall be made in such a manner as to maximize the Value of all Payments actually made to Executive. For purposes of reducing the Payments to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) Safe Harbor Amount, only the Subject Payments shall be reduced. If the reduction of the Code (Subject Payments would not result in a reduction of the “Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreement shall be reduced pursuant to this Section 409A penalties”6.4(a); , and further provided, that if, notwithstanding the immediately preceding proviso, the grossGross-up payment cannot Up Payment shall be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesExecutive. The determination as Company's obligation to whether make Gross-Up Payments under this Section 6.4 shall not be conditioned upon Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount 's Termination of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityEmployment.
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Gross-Up Payment. Payments under Section C.1. (a) Anything in this Agreement to the contrary notwithstanding and Section C.2. of this Exhibit except as set forth below, in the event it shall be made without regard to whether the deductibility of such payments (or determined that any other payments or benefits to or for the benefit of Executive) Payment would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to Executive an additional amount (the “gross-up payment”) that after reduction for all taxes (including but not limited to the Excise Tax, then Executive shall be entitled to receive an additional payment (the "Gross-Up Payment") in an amount such that, ---------------- after payment by Executive of all Taxes (and any interest or penalties imposed with respect to such grossTaxes), including any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up payment equals Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax with respect to imposed upon the Excess Parachute Payments; provided, that to . Notwithstanding the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the foregoing provisions of this Section C.36.4(a), if it shall be determined that Executive is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then except as provided below, no Gross-Up Payment shall be made to Executive and the amounts payable under this Agreement, other than amounts or benefits provided under Article V of this Agreement or pursuant to any other option or equity grants to Executive (the "Subject Payments"), shall be adjusted to the extent necessary reduced ---------------- (but only to the extent necessarynot below zero) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing the payments under Section 7.3(a)(ii), unless an alternative method of reduction is elected by Executive, and in any event shall be made in such a manner as to maximize the Value of all Payments actually made to Executive. For purposes of reducing the Payments to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) Safe Harbor Amount, only the Subject Payments shall be reduced. If the reduction of the Code (Subject Payments would not result in a reduction of the “Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Agreement shall be reduced pursuant to this Section 409A penalties”6.4(a); , and further provided, that if, notwithstanding the immediately preceding proviso, the grossGross-up payment cannot Up Payment shall be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penaltiesExecutive. The determination as Debtor's or the Reorganized Entity's obligation to whether make Gross-Up Payments under this Section 6.4 shall not be conditioned upon Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount 's Termination of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityEmployment.
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Gross-Up Payment. Payments under Section C.1. In the event that the Executive becomes entitled to the severance benefits described in Sections 5(a) and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (5(b) or any other benefits or payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (under this Agreement or any other payments agreement, plan, instrument or benefitsobligation in whatever form of the Company or its subsidiaries or affiliates (other than pursuant to this Section) would including by reason of the accelerated vesting of equity awards or thereunder (together, the “Total Benefits”), and in the event that any of the Total Benefits will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under Code Section 4999 of the Code 4999, including interest, penalties or other excise tax thereon (the “Excise Tax”). If any portion , then either (i) the amount of the payments or benefits to or for Total Benefits shall be reduced if the benefit Executive would retain a greater after-tax amount by virtue of such reduction than the Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within would retain if the meaning of Section 280G Excise Tax were imposed (the aggregate of such payments being hereinafter referred to as “Reduction Scenario”) or (ii) if the “Excess Parachute Payments”)Reduction Scenario does not apply because the Executive would not retain a greater amount under the Reduction Scenario, the Company shall promptly pay to the Executive an additional amount (the “grossGross-up paymentUp Payment”) such that the net amount retained by the Executive, after reduction deduction of any Excise Tax on the Total Benefits and any federal, state and local income tax, Excise Tax and FICA and Medicare withholding taxes upon the payment provided for by this Section 4, shall be equal to the Total Benefits. For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive’s termination of employment (whether pursuant to the terms of this Agreement or any other agreement, plan or arrangement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all taxes (including but not limited “excess parachute payments” within the meaning the Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel (“Tax Counsel”) with respect to such gross-up payment equals selected by the Excise Tax with respect Company’s independent auditors and acceptable to the Excess Parachute Payments; providedExecutive, that to such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the extent any gross-up payment would be considered “deferred compensation” for purposes meaning of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4280G(b)(4) of the Code in excess of the Base Amount (as defined in the “Section 409A penalties”Code); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment canor are otherwise not be made to conform subject to the requirements of Section 409A of the CodeExcise Tax, (ii) the amount of the gross-up payment Total Benefits which shall be determined without regard treated as subject to any gross-up for the Section 409A penalties. The determination as Excise Tax shall be equal to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the lesser of (A) the total amount of the Total Benefits reduced by the amount of such Total Benefits that in the opinion of Tax Counsel are not parachute payments, or (B) the amount of any Excise Tax owed with respect theretoexcess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of any grossthe Gross-up payment Up Payment, the Executive shall be made deemed to pay federal income taxes at the Companyhighest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s expense residence on the date of termination, net of the reduction in federal income taxes which could be obtained from deduction of such state and local taxes (calculated by PricewaterhouseCoopers LLP or by assuming that any reduction under Section 68 of the Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability state and local income taxes that is higher than the Excise Tax (if any) determined would otherwise be deductible by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityExecutive).
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Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit shall be made without regard In the event that the Executive becomes ---------------- entitled to whether the deductibility of such payments (Severance Benefits or any other benefits or payments under Section 2 of this Agreement (other than pursuant to this Section 2.6(C)) or benefits to the KESOP or for the benefit of Executive) would be limited or precluded DSOP by Section 280G reason of the Code accelerated vesting of stock options thereunder (“Section 280G”) together, the "Total Benefits"), and without regard to whether such payments (or in the event that any other payments or benefits) would of the Total Benefits will be subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company shall promptly pay to the Executive an additional amount (the “gross"Gross-up payment”Up Payment") such that the net amount retained by the Executive, after reduction deduction of any Excise Tax on the Total Benefits and any federal, state and local income tax, Excise Taxes and FICA Medicare withholding taxes upon the payment provided for by this Section 2.6(C), shall be equal to the Total Benefits. For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive's termination of employment (whether pursuant to the terms of this Agreement or any other agreement, plan or arrangement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all taxes (including but not limited "excess parachute payments" within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel ("Tax Counsel") selected by the Company's independent auditors and acceptable to the Executive, such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the Base Amount, or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Benefits which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Benefits reduced by the amount of such Total Benefits that in the opinion of Tax Counsel are not parachute payments, or (B) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence on the Date of Termination, net of the reduction in federal income taxes which could be obtained from deduction of such state and local taxes (calculated by assuming that any reduction under Section 68 of the Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of such state and local income taxes that would otherwise be deductible by the Executive). In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive's employment, the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare withholding taxes imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax, FICA and Medicare withholding taxes and/or a federal, state or local income tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment to the Executive in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such gross-up payment equals excess) at the Excise Tax with respect to the Excess Parachute Payments; provided, time that to the extent any gross-up payment would be considered “deferred compensation” for purposes of Section 409A of the Code, the manner and time of payment, and the provisions of this Section C.3, shall be adjusted to the extent necessary (but only to the extent necessary) to comply with the requirements of Section 409A with respect to such payment so that the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code (the “Section 409A penalties”); and further provided, that if, notwithstanding the immediately preceding proviso, the gross-up payment cannot be made to conform to the requirements of Section 409A of the Code, the amount of the gross-up payment shall be determined without regard to any gross-up for the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments and, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that excess is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityfinally determined.
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Gross-Up Payment. Payments under Section C.1. and Section C.2. of this Exhibit shall be made without regard to whether the deductibility of such payments (or any other payments or benefits to or for the benefit of Executive) would be limited or precluded by Section 280G of the Code (“Section 280G”) and without regard to whether such payments (or any other payments or benefits) would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”). If any portion of the payments or benefits to or for the benefit of Executive (including, but not limited to, payments and benefits under this Agreement but determined without regard to this paragraph) constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments being hereinafter referred to as the “Excess Parachute Payments”), the Company Purchaser shall promptly pay to Executive Sellers (in accordance with their respective Pro-Rata Shares), by wire transfer of immediately available funds, as an additional amount increase to the Purchase Price, the sum of (a) the aggregate increase in Taxes, incurred by Sellers, resulting from an election made under Section 338(h)(10) of the Code and any similar provision of state or local law (each, a “338(h)(10) Election”) such that the Sellers will receive the same after-Tax proceeds as if Sellers had sold stock and no 338(h)(10) Election had occurred, plus (b) a “gross-up payment”) that after reduction for all taxes (including but not limited ” equal to the Excise TaxTaxes that Sellers must pay on the Taxes described in clause (a) with respect to such and any “gross-up payment equals payment” pursuant to this clause (b) (the Excise Tax with respect sum of such amounts in clauses (a) and (b) being referred to collectively as the Excess Parachute Payments; provided, that to “Gross-Up Payment”). The Parties agree the extent any gross-up payment would be considered “deferred compensation” following principles shall apply for purposes of Section 409A calculating the Gross-Up Payment: (i) the calculation of the Code, the manner and time of payment, and the provisions of this Section C.3, Gross-Up Payment shall be adjusted to the extent necessary (but only to the extent necessary) to comply made in accordance with the requirements of Section 409A with respect to such payment so that Tax Allocation; and (ii) the payment does not give rise to the interest or additional tax amounts described at Section 409A(a)(1)(B) or Section 409A(b)(4) of the Code methodology set forth on Schedule 2.7 (the “Gross-Up Methodology”) shall be used to calculate the Gross-Up Payment. The obligation to compensate Sellers for increased Taxes as set forth in this Section 409A penalties”2.7 will be ongoing in the event of any actual adjustment upon amended return, audit or otherwise, and any additional increase shall be paid promptly by Purchaser by wire transfer of immediately available funds to an account designated in writing by the Seller Representative for the benefit of the Sellers (in accordance with their respective Pro-Rata Shares); , as the designees of Sellers and further provided, that if, notwithstanding any decrease shall be paid promptly by the Sellers by wire transfer of immediately preceding proviso, the gross-up payment cannot be made to conform available funds to the requirements of Section 409A of the Code, account specified in writing by Purchaser. Any dispute regarding the amount of the grossGross-up payment Up Payment shall be determined without regard resolved in accordance with the dispute resolution provisions described in Section 2.5(c), substituting for these purposes any reference in Section 2.5(c) to any gross“Final Net Working Capital” or similar and “Purchaser Closing Statement” with “Final Gross-up for Up Payment” and “calculation of the Section 409A penalties. The determination as to whether Executive’s payments and benefits include Excess Parachute Payments andFinal Gross-Up Payment”, if so, the amount of such payments, the amount of any Excise Tax owed with respect thereto, and the amount of any gross-up payment shall be made at the Company’s expense by PricewaterhouseCoopers LLP or by such other certified public accounting firm as the Committee may designate prior to a Change of Control (the “accounting firm”). Notwithstanding the foregoing, if the Internal Revenue Service shall assert an Excise Tax liability that is higher than the Excise Tax (if any) determined by the accounting firm, the Company shall promptly augment the gross-up payment to address such higher Excise Tax liabilityrespectively.
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Samples: Stock Purchase Agreement (Covenant Logistics Group, Inc.)
