Common use of Internal Revenue Code Section 280g Gross Up Clause in Contracts

Internal Revenue Code Section 280g Gross Up. (a) If as a result of a Change in Control the Executive becomes entitled to acceleration of benefits under this Salary Continuation Agreement or under any other plan or agreement of or with the Bank or NewMil Bancorp, Inc. (together, the "Total Benefits"), and if any of the Total Benefits will be subject to the Excise Tax as set forth in Sections 280G and 4999 of the Internal Revenue Code of 1986 (the "Excise Tax"), the Bank shall pay to the Executive the following additional amounts, consisting of (1) a payment equal to the Excise Tax payable by the Executive on the Total Benefits under Section 4999 of the Internal Revenue Code (the "Excise Tax Payment"), and (2) a payment equal to the amount necessary to provide the Excise Tax Payment net of all income, payroll and excise taxes. Together, the additional amounts described in clauses (1) and (2) are referred to in this Agreement as the "Gross-Up Payment Amount." Payment of the Gross-Up Payment Amount shall be made in addition to the amount set forth in Section 2.4 hereof. (b) For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and the amount of such Excise Tax, (1) any other payments or benefits received or to be received by the Executive (whether under the terms of this Agreement or any other agreement, or other plan or arrangement with the Bank or NewMil Bancorp, Inc., any person whose actions result in a Change in Control or any person affiliated with NewMil Bancorp, Inc. or such person) in connection with a Change in Control or the Executive's termination of employment shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Internal Revenue 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 the certified public accounting firm that is retained by NewMil Bancorp, Inc. as of the date immediately before the Change in Control (the "Accounting Firm"), such other payments or benefits (in whole or in part) represent reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4) of the Internal Revenue Code, or are otherwise not subject to the Excise Tax, (2) 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 the Accounting Firm are not parachute payments, or (B) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (1) above), and (3) the value of any noncash benefits or any deferred payment or benefit shall be determined by NewMil Bancorp, Inc.'s Accounting Firm in accordance with the principles of Sections 280G(d)(3) and (4) of the Internal Revenue Code. (c) For purposes of determining the Gross-Up Payment Amount, 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 Amount 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 of employment, net of the reduction in federal income taxes that could be obtained from deduction of state and local taxes (calculated by assuming that any reduction under Section 68 of the Internal Revenue Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of state and local income taxes that would otherwise be deductible by the Executive, and applicable federal FICA and Medicare withholding taxes). (d) If the Excise Tax is later determined to be less than the amount taken into account hereunder at the time of termination of the Executive's employment, the Executive shall, when the amount of such reduction in Excise Tax is finally determined, repay to the Bank the portion of the Gross-Up Payment Amount attributable to the reduction (plus that portion of the Gross-Up Payment Amount attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare withholding taxes imposed on the Gross-Up Payment Amount 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). If the Excise Tax is later determined to be more than the amount taken in account hereunder at the time of termination of the Executive's employment (including any payment the existence or amount of which cannot be determined at the time the Gross-Up Payment Amount is paid), the Bank shall make an additional Gross-Up Payment Amount to the Executive of the excess (plus any interest, penalties or additions payable by the Executive on the excess) when the amount of the excess is finally determined.

Internal Revenue Code Section 280g Gross Up. (a) If as a result of a Change in Control the Executive becomes entitled to acceleration of benefits under this Salary Continuation Agreement or under any other plan or agreement of or with the Bank or NewMil Bancorp, Inc. (together, the "“Total Benefits"”), and if any of the Total Benefits will be subject to the Excise Tax as set forth in Sections sections 280G and 4999 of the Internal Revenue Code of 1986 (the "“Excise Tax"”), the Bank shall pay to the Executive the following additional amounts, consisting of (1) a payment equal to the Excise Tax payable by the Executive on the Total Benefits under Section section 4999 of the Internal Revenue Code (the "“Excise Tax Payment"”), and (2) a payment equal to the amount necessary to provide the Excise Tax Payment net of all income, payroll and excise taxes. Together, the additional amounts described in clauses (1) and (2) are referred to in this Agreement as the "“Gross-Up Payment Amount." ” Payment of the Gross-Up Payment Amount shall be made in addition to the amount set forth in Section 2.4 hereof. (b) For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and the amount of such Excise Tax, (1) any other payments or benefits received or to be received by the Executive (whether under the terms of this Agreement or any other agreement, or other plan or arrangement with the Bank or NewMil Bancorp, Inc., any person whose actions result in a Change in Control or any person affiliated with NewMil Bancorp, Inc. or such person) in connection with a Change in Control or the Executive's termination of employment ’s Separation from Service shall be treated as "“parachute payments" ” within the meaning of Section section 280G(b)(2) of the Internal Revenue Code, and all "“excess parachute payments," ” within the meaning of Section section 280G(b)(1), shall be treated as subject to the Excise Tax, unless in the opinion of the certified public accounting firm that is retained by NewMil Bancorp, Inc. as of the date immediately before the Change in Control (the "“Accounting Firm"”), such other payments or benefits (in whole or in part) represent reasonable compensation for services actually rendered, within the meaning of Section section 280G(b)(4) of the Internal Revenue Code, or are otherwise not subject to the Excise Tax, (2) 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 the Accounting Firm are not parachute payments, or (B) the amount of excess parachute payments within the meaning of Section section 280G(b)(1) (after applying clause (1) above), and (3) the value of any noncash benefits or any deferred payment or benefit shall be determined by NewMil Bancorp, Inc.'s ’s Accounting Firm in accordance with the principles of Sections sections 280G(d)(3) and (4) of the Internal Revenue Code. (c) For purposes of determining the Gross-Up Payment Amount, 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 Amount 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 ’s residence on the date of termination of employmentSeparation from Service, net of the reduction in federal income taxes that could be obtained from deduction of state and local taxes (calculated by assuming that any reduction under Section section 68 of the Internal Revenue Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of state and local income taxes that would otherwise be deductible by the Executive, and applicable federal FICA and Medicare withholding taxes). (d) If the Excise Tax is later determined to be less than the amount taken into account hereunder at the time of termination of the Executive's ’s employment, the Executive shall, when the amount of such reduction in Excise Tax is finally determined, repay to the Bank the portion of the Gross-Up Payment Amount attributable to the reduction (plus that portion of the Gross-Up Payment Amount attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare withholding taxes imposed on the Gross-Up Payment Amount 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). If the Excise Tax is later determined to be more than the amount taken in account hereunder at the time of termination of the Executive's ’s employment (including any payment the existence or amount of which cannot be determined at the time the Gross-Up Payment Amount is paid), the Bank shall make an additional Gross-Up Payment Amount to the Executive of the excess (plus any interest, penalties or additions payable by the Executive on the excess) when the amount of the excess is finally determined.

Internal Revenue Code Section 280g Gross Up. (a) If as a result of a Change in Control the Executive becomes entitled to acceleration of benefits under this Salary Continuation Agreement or under any other plan or agreement of or with the Bank or NewMil Bancorp, Inc. First Northern Community Bancorp (together, the "“Total Benefits"”), and if any of the Total Benefits will be subject to the Excise Tax as set forth in Sections 280G and 4999 of the Internal Revenue Code of 1986 (the "“Excise Tax"”), the Bank shall pay to the Executive the following additional amounts, consisting of (1) a payment equal to the Excise Tax payable by the Executive on the Total Benefits under Section 4999 of the Internal Revenue Code (the "“Excise Tax Payment"”), and (2) a payment equal to the amount necessary to provide the Excise Tax Payment net of all income, payroll and excise taxes. Together, the additional amounts described in clauses (1) and (2) are referred to in this Agreement as the "“Gross-Up Payment Amount." ” Payment of the Gross-Up Payment Amount shall be made in addition to the amount set forth in Section 2.4 hereof. (b) For purposes of determining whether any of the Total Benefits will be subject to the Excise Tax and the amount of such Excise Tax, (1) any other payments or benefits received or to be received by the Executive (whether under the terms of this Agreement or any other agreement, or other plan or arrangement with the Bank or NewMil First Northern Community Bancorp, Inc., any person whose actions result in a Change in Control or any person affiliated with NewMil Bancorp, Inc. First Northern Community Bancorp or such person) in connection with a Change in Control or the Executive's ’s termination of employment shall be treated as "“parachute payments" ” within the meaning of Section 280G(b)(2) of the Internal Revenue 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 the certified public accounting firm that is retained by NewMil Bancorp, Inc. the First Northern Community Bancorp as of the date immediately before the Change in Control (the "“Accounting Firm"”), such other payments or benefits (in whole or in part) represent reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4) of the Internal Revenue Code, or are otherwise not subject to the Excise Tax, (2) 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 the Accounting Firm are not parachute payments, or (B) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (1) above), and (3) the value of any noncash benefits or any deferred payment or benefit shall be determined by NewMil First Northern Community Bancorp, Inc.'s ’s Accounting Firm in accordance with the principles of Sections 280G(d)(3) and (4) of the Internal Revenue Code. (c) For purposes of determining the Gross-Up Payment Amount, 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 Amount 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 ’s residence on the date of termination of employment, net of the reduction in federal income taxes that could be obtained from deduction of state and local taxes (calculated by assuming that any reduction under Section 68 of the Internal Revenue Code in the amount of itemized deductions allowable to the Executive applies first to reduce the amount of state and local income taxes that would otherwise be deductible by the Executive, and applicable federal FICA and Medicare withholding taxes). (d) If the Excise Tax is later determined to be less than the amount taken into account hereunder at the time of termination of the Executive's ’s employment, the Executive shall, when the amount of such reduction in Excise Tax is finally determined, repay to the Bank the portion of the Gross-Up Payment Amount attributable to the reduction (plus that portion of the Gross-Up Payment Amount attributable to the Excise Tax, federal, state and local income taxes and FICA and Medicare withholding taxes imposed on the Gross-Up Payment Amount 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). If the Excise Tax is later determined to be more than the amount taken in account hereunder at the time of termination of the Executive's ’s employment (including any payment the existence or amount of which cannot be determined at the time the Gross-Up Payment Amount is paid), the Bank shall make an additional Gross-Up Payment Amount to the Executive of the excess (plus any interest, penalties or additions payable by the Executive on the excess) when the amount of the excess is finally determined.