Certain Additional Payments by Company. 17.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “Excise Tax”), then Employee shall be entitled to receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that after payment by Employee of all taxes (as defined in paragraph 17.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments. 17.2 Subject to the provisions of paragraph 17.3 through 17.11, any determination (individually, a “Determination”) required to be made under this paragraph 17, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at Company’s expense, by nationally recognized tax counsel mutually acceptable to Company and Employee (“Tax Counsel”). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to Company and Employee within 15 business days of the termination of Employee’s employment, if applicable, or such other time or times as is reasonably requested by Company or Employee. If Tax Counsel makes the initial Determination that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments. Employee shall have the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employee. 17.3 Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to the Excise Tax. 17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto in writing of such Claim (“Tax Claim Notice”). 17.5 If a Claim is asserted against Employee (“Employee Claim”), Employee shall take or cause to be taken such action in connection with contesting such Employee Claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are reasonably designated by Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that Company shall be solely responsible for the payment of any and all fees and disbursements of such counsel and any experts) and the execution of powers of attorney, provided that:
Appears in 2 contracts
Samples: Employment Agreement (Mariner Energy Inc), Employment Agreement (Mariner Energy Inc)
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment payments, distributions, vestings, accelerations or distribution other events constituting "payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") by Company or any of its affiliates Laclede to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement Agreement, other Company plans or otherwise otherwise, but determined without regard to any additional payments required under this Section 5(a)) (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “"Total Payments”), ") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “"Excise Tax”"), then Employee the Company shall be entitled pay to receive Executive in cash an additional payment or payments amount (individually referred to herein as a “the "Gross-Up Payment” ") which after deduction of (1) any excise tax under Section 4999 thereon; (2) any federal and state income tax thereon; (3) any two city earnings tax thereon if Executive resides or more works in the City of such additional payments being referred to herein as “Gross-Up Payments”St. Louis; and (4) in an amount such that after payment by Employee the Medicare portion of all taxes (as defined in paragraph 17.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment any FICA tax thereon shall be equal to the Excise Tax imposed upon on such Total Payments. The Gross-Up Payment shall be made by the PaymentsCompany to Executive as soon as practical following the effective date of the Termination. In making this computation, the following provisions shall apply:
(i) The top federal and Missouri income tax rates shall apply;
(ii) The top City of St. Louis earnings tax rate shall apply if Executive resides or works in the City;
(iii) Only the Medicare portion of the FICA tax shall apply; and
(iv) the deductibility of any of the above taxes in computing any of the other above taxes shall be taken into account, the effect on the itemized deduction phase-out shall be taken into account and the effect on the deductibility of personal exemptions shall not be taken into account. Currently, the rate which takes into account (i) through (iv) above is 46.38%. The computation of this rate is shown on Exhibit 1. The rate which also takes into account the excise tax rate under Section 4999 is, therefore, 66.38% (assuming the non-deductibility of the federal excise tax for Missouri income tax purposes). In addition, for purposes of this Section 5(a):
(A) any withholding by the Company of any of the above taxes which gives rise to a credit to Executive shall be treated as a payment to Executive.
17.2 (B) the purpose of this provision is to provide Executive, on an after-tax basis, with sufficient cash to pay any excise tax imposed on him under Section 4999.
(C) An example of the computation required by this Section 5(a) is attached to this Agreement as Exhibit 2.
(b) Subject to the provisions of paragraph 17.3 through 17.11Section 5(c), any determination (individually, a “Determination”) all determinations required to be made under this paragraph 17section, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, made by Deloitte & Touche LLP (or such other accounting firm which is serving as the Company's independent certified public accountants at Company’s expense, by nationally recognized tax counsel mutually acceptable to Company and Employee the time) (“Tax Counsel”). Tax Counsel the "Accounting Firm") which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to Company Laclede and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that a payment of excise tax is due, or such other earlier time or times as is reasonably requested by Company Laclede. In the event that the Accounting Firm is serving as accountant or Employeeauditor for the individual, entity or group effecting the Change in Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Laclede. Any Gross-Up Payment, as determined pursuant to this Section 5, shall be paid by Laclede to Executive within five (5) days of the receipt of the Accounting Firm's determination. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive's applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final binding upon Laclede and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company Laclede should have been made (“an "Underpayment”"), consistent with the calculations required to be made hereunder. In the event that Laclede exhausts its remedies pursuant to Section 5(c) or chooses not to exercise such remedies and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment or additional payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company Laclede to Employeeor for the benefit of Executive.
17.3 Company (c) Executive shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against notify Laclede in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses claim by the Internal Revenue Service (including reasonable attorneys’, accountants’, and experts’ fees and expenses"IRS Claim") with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichthat, if pursued successfullysuccessful, could result in or give rise to would require the payment by Laclede of a claim by Employee against Company under this paragraph 17 (“Claim”), includingGross-Up Payment. Such notification shall be given as soon as practicable, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto no later than ten (10) business days after Executive is informed in writing of such an IRS Claim, and shall apprise Laclede of the nature of such IRS Claim (“Tax Claim Notice”).
17.5 If a and the date on which such IRS Claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such IRS Claim prior to the expiration of the thirty (30) day period following the date on which Executive gives such notice to Laclede (or such shorter period ending on the date that any payment of taxes with respect to such IRS Claim is due). If Laclede notifies Executive in writing prior to the expiration of such period that it desires to contest such IRS Claim, Executive shall:
(i) give Laclede any information reasonably requested by Laclede relating to such IRS Claim;
(ii) take such action in connection with contesting such Employee IRS Claim as Company Laclede shall reasonably request in writing from time to time, including the retention without limitation, accepting legal representation with respect to such IRS Claim by an attorney reasonably selected by Laclede;
(iii) cooperate with Laclede in good faith in order effectively to contest such IRS Claim; and
(iv) permit Laclede to participate in any proceedings relating to such IRS Claim; provided, however, that Laclede 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 a grossed-up basis, for any excise tax or income tax (including interest and penalties with respect thereto) imposed as a result of counsel such representation and experts as are reasonably designated by Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that Company shall be solely responsible for the payment of costs and expenses. Without limitation on the foregoing provisions of this Section 5(c), Laclede shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel IRS Claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the IRS Claim in xxx permissible manner, and Executive agrees to prosecute such contest to a determination before any expertsadministrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Laclede shall determine; provided, however, that if Laclede directs Executive to pay such IRS Claim and sue for a refund, Laclede shall advance the axxxnt of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on a gross-up basis, from any excise tax 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 further provided that 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 is claimed to be due is limited solely to such contested amount. Furthermore, Laclede'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 contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. Executive may elect at any time in writing not to contest or not to further contest the IRS Claim, or otherwise not to perform its obligations under this Section 5(c), by notifying Laclede in writing that he elects to forego any Gross-Up Payment or additional Gross-Up Payment under this Section 5(c).
(d) If, after the receipt by Executive of an amount advanced by Laclede pursuant to Section 5(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Laclede's complying with the requirements of Section 5(c)) promptly pay to Laclede the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by Laclede pursuant to Section 5(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and Laclede does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the execution amount of powers such advance shall offset, to the extent thereof, the amount of attorney, provided that:Gross-Up Payment required to be paid.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 Company agrees that:
6.1 Anything in this Agreement to the contrary notwithstanding, in the event that, following a Change of Control, it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 6) (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or if any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being hereafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that after payment by Employee Executive of all taxes (as defined in paragraph 17.11including 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, Employee Executive retains an amount of such the Gross-Up Payment equal to the Excise Tax imposed upon the PaymentsPayment.
17.2 6.2 Subject to the provisions of paragraph 17.3 through 17.11Section 6.3, any determination (individuallybelow, a “Determination”) all determinations required to be made under this paragraph 17Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by nationally recognized tax counsel mutually acceptable to the accounting firm which is then serving as the auditors for Company and Employee (the “Tax CounselAccounting Firm”). Tax Counsel , which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that there has been a Payment, or such other earlier time or times as is reasonably requested by Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change of Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Company to Executive (or Employeeto the applicable taxing authority on Executive’s behalf) within five (5) days of the receipt of the Accounting Firm’s determination or, if later, on the due date for such taxes. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive’s applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any good faith determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive binding upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that Company exhausts its remedies pursuant to Section 6.3, below, and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employeeor for the benefit of Executive.
17.3 6.3 Executive shall notify Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee would require the payment by Company under paragraph 17.3, then such party of a Gross-Up Payment. Such notification shall promptly notify the other party hereto be given as soon as practicable but no later than fifteen (15) business days after Executive is informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim and shall apprise Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which Executive gives such notice to Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
6.3.1 Give Company any information reasonably requested by Company relating to such claim;
6.3.2 Take such action in connection with contesting such Employee Claim claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably designated selected by Company;
6.3.3 Cooperate with Company (it being understood and agreed by the parties hereto that the terms of in good faith in order effectively to contest such claim; and
6.3.4 Permit Company to participate in any proceedings relating to such retention shall expressly provide claim; provided, however, that Company shall be solely responsible 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 the any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs an expenses. Without limiting the foregoing provisions of this Section 6.3, Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel 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 expertspermissible manner; and 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 Company shall determine; provided further, however, that if Company directs Executive to pay such claim and xxx for a refund, Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax 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 further provided that 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 is claimed to be due is limited solely to such contested amount. Furthermore, Company’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 contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
6.4 If, after the receipt by Executive of an amount advanced by Company pursuant to Section 6.3 above, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Company’s complying with the requirements of said interest paid or credited thereon, after taxes applicable thereto) promptly pay such refund to Company. If, after the receipt by Executive of an amount advanced by Company pursuant to said Section 6.3, a determination is made that Executive shall not be entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid; and the execution amount of powers such advance shall offset, to the extent thereof, the amount of attorneythe Gross-Up Payment required to be paid.
6.5 Subject to any earlier time limits set forth in this Section 6, provided that:all payments and reimbursements to which Executive is entitled under this Section 6 shall be paid to or on behalf of Executive not later than the end of the taxable year of Executive next following the taxable year of Executive in which Executive (or Company, on Executive’s behalf) remits the related taxes (or, in the event of an audit or litigation with respect to such tax liability, not later than the end of the taxable year of Executive next following the taxable year of Executive in which there is a final resolution of such audit or litigation (whether by reason of completion of the audit, entry of a final and non-appealable judgment, final settlement, or otherwise)).
Appears in 1 contract
Samples: Employment Agreement (Allscripts-Misys Healthcare Solutions, Inc.)
Certain Additional Payments by Company. 17.1 Company agrees that:
6.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 6) (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or if any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being hereafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that after payment by Employee Executive of all taxes (as defined in paragraph 17.11including 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, Employee Executive retains an amount of such the Gross-Up Payment equal to the Excise Tax imposed upon the PaymentsPayment.
17.2 6.2 Subject to the provisions of paragraph 17.3 through 17.11Section 6.3, any determination (individuallybelow, a “Determination”) all determinations required to be made under this paragraph 17Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by nationally recognized tax counsel mutually acceptable to the accounting firm which is then serving as the auditors for Company and Employee (the “Tax CounselAccounting Firm”). Tax Counsel , which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that there has been a Payment, or such other earlier time or times as is reasonably requested by Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change of Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Company to Executive (or Employeeto the applicable taxing authority on Executive’s behalf) within five (5) days of the receipt of the Accounting Firm’s determination or, if later, on the due date for such taxes. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive’s applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any good faith determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive binding upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that Company exhausts its remedies pursuant to Section 6.3, below, and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employeeor for the benefit of Executive.
17.3 6.3 Executive shall notify Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee would require the payment by Company under paragraph 17.3, then such party of a Gross-Up Payment. Such notification shall promptly notify the other party hereto be given as soon as practicable but no later than fifteen (1 5) business days after Executive is informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim and shall apprise Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which Executive gives such notice to Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
6.3.1 Give Company any information reasonably requested by Company relating to such claim;
6.3.2 Take such action in connection with contesting such Employee Claim claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably designated selected by Company;
6.3.3 Cooperate with Company (it being understood and agreed by the parties hereto that the terms of in good faith in order effectively to contest such claim; and
6.3.4 Permit Company to participate in any proceedings relating to such retention shall expressly provide claim; provided, however, that Company shall be solely responsible 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 the any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs an expenses. Without limiting the foregoing provisions of this Section 6.3, Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel 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 expertspermissible manner; and 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 Company shall determine; provided further, however, that if Company directs Executive to pay such claim and xxx for a refund, Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax 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 further provided that 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 is claimed to be due is limited solely to such contested amount. Furthermore, Company’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 contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
6.4 If, after the receipt by Executive of an amount advanced by Company pursuant to Section 6.3 above, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Company’s complying with the requirements of said interest paid or credited thereon, after taxes applicable thereto) promptly pay such refund to Company. If, after the receipt by Executive of an amount advanced by Company pursuant to said Section 6.3, a determination is made that Executive shall not be entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid; and the execution amount of powers such advance shall offset, to the extent thereof, the amount of attorneythe Gross-Up Payment required to be paid.
6.5 Subject to any earlier time limits set forth in this Section 6, provided that:all payments and reimbursements to which Executive is entitled under this Section 6 shall be paid to or on behalf of Executive not later than the end of the taxable year of Executive next following the taxable year of Executive in which Executive (or Company, on Executive’s behalf) remits the related taxes (or, in the event of an audit or litigation with respect to such tax liability, not later than the end of the taxable year of Executive next following the taxable year of Executive in which there is a final resolution of such audit or litigation (whether by reason of completion of the audit, entry of a final and non-appealable judgment, final settlement, or otherwise)).
Appears in 1 contract
Samples: Employment Agreement (Allscripts-Misys Healthcare Solutions, Inc.)
Certain Additional Payments by Company. 17.1 Company agrees that:
6.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 6) (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or if any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being hereafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that after payment by Employee Executive of all taxes (as defined in paragraph 17.11including 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, Employee Executive retains an amount of such the Gross-Up Payment equal to the Excise Tax imposed upon the PaymentsPayment.
17.2 6.2 Subject to the provisions of paragraph 17.3 through 17.11Section 6.3, any determination (individuallybelow, a “Determination”) all determinations required to be made under this paragraph 17Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by nationally recognized tax counsel mutually acceptable to the accounting firm which is then serving as the auditors for Company and Employee (the “Tax CounselAccounting Firm”). Tax Counsel , which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that there has been a Payment, or such other earlier time or times as is reasonably requested by Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change in Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Company or Employeeto Executive within five (5) days of the receipt of the Accounting Firm’s determination. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive’s applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any good faith determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive binding upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that Company exhausts its remedies pursuant to Section 6.3, below, and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employeeor for the benefit of Executive.
17.3 6.3 Executive shall notify Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee would require the payment by Company under paragraph 17.3, then such party of a Gross-Up Payment. Such notification shall promptly notify the other party hereto be given as soon as practicable but no later than fifteen (15) business days after Executive is informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim and shall apprise Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty (30) 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 Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
6.3.1 Give Company any information reasonably requested by Company relating to such claim;
6.3.2 Take such action in connection with contesting such Employee Claim claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably designated selected by Company;
6.3.3 Cooperate with Company (it being understood and agreed by the parties hereto that the terms of in good faith in order effectively to contest such claim; and
6.3.4 Permit Company to participate in any proceedings relating to such retention shall expressly provide claim; provided, however, that Company shall be solely responsible 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 the any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs an expenses. Without limiting the foregoing provisions of this Section 6.3, the company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel 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 expertspermissible manner; and 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 Company shall determine; provided further, however, that if Company directs Executive to pay such claim and xxx for a refund, Company shall advance the amount of such payment to Executive on an interest-free basis ad shall indemnify and hold Executive harmless, on an after- tax basis, from any Excise Tax 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 further provided that 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 is claimed to be due is limited solely to such contested amount. further more, Company’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 contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. If, after the receipt by Executive of an amount advanced by Company pursuant to Section 6.3 above, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Company’s complying with the requirements of said interest paid or credited thereon, after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by Company pursuant to said Section 6.3, a determination is made that Executive shall not be entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid; and the execution amount of powers such advance shall offset, to the extent thereof, the amount of attorney, provided that:the Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Allscripts Healthcare Solutions Inc)
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstanding, in the event if it shall be determined that any payment or distribution by the Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise) is determined without regard to any additional payments required under this Section 16 (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986409A, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional receive, in addition to the Payment, a payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that that, after payment by Employee the Executive of all taxes (as defined in paragraph 17.11including any interest or penalties imposed with respect to such taxes), including, without limitation, any federal or state income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of such Executive will have received the Gross-Up Payment in an amount equal to the Excise Tax imposed upon the PaymentsPayment. The maximum amount of any Gross-Up Payment shall be $150,000.
17.2 (b) Subject to the provisions provision of paragraph 17.3 through 17.11Section 16(c), any determination (individually, a “Determination”) all determinations required to be made under this paragraph 17Section 16, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, made by a “Big Four” accounting firm retained by the Company as its auditor at Company’s expense, by nationally recognized tax counsel mutually acceptable to Company and Employee the time such determinations are required (the “Tax CounselAccounting Firm”). Tax Counsel ) which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to the Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from the Company that there has been a Payment, or such other earlier time or times as is reasonably requested required by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 16, shall be paid by the Company or Employeeto Executive within ten (10) business days of the Company’s receipt of the Accounting Firm’s determination. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive’s applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive binding upon the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections 4999 and 280G Section 409A at the time of the Codeinitial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by the Company should have been made (“Underpayment”), and if upon any reasonable written request from Employee or Company consistent with the calculations required to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, be made hereunder. If Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm should determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to Employeeor for the benefit of Executive.
17.3 (c) Executive shall notify the Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim would require the payment by Employee against the Company under this paragraph 17 (“Claim”), includingof the Gross-Up Payment. Such notification shall be given as soon as practicable, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto in no event later than ten (10) business days after Executive has been informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim, and shall apprise the Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause required to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty- (30)- 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 thirty- (30)- day period that the Company desires to consent such claim, Executive shall:
(i) give the Company any information reasonably required by the Company relating to such claim, (ii) take such action in connection with contesting such Employee Claim claim as the Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, but not limited to, accepting legal representation with respect to such claim by an attorney reasonably designated by Company (it being understood and agreed selected by the parties hereto that Company,
(iii) cooperate with the terms of any Company in good faith in order effectively to contest such retention shall expressly provide that Company shall be solely responsible for the payment of any and all fees and disbursements of such counsel and any experts) and the execution of powers of attorneyclaim, provided that:and
Appears in 1 contract
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstanding, in the event if it shall be determined that any payment or distribution by the Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise) is determined without regard to any additional payments required under this Section 16 (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986409A, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional receive, in addition to the Payment, a payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that that, after payment by Employee the Executive of all taxes (as defined in paragraph 17.11including any interest or penalties imposed with respect to such taxes), including, without limitation, any federal or state income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of such Executive will have received the Gross-Up Payment in an amount equal to the Excise Tax imposed upon the PaymentsPayment. The maximum amount of any Gross-Up Payment shall be $150,000.
17.2 (b) Subject to the provisions provision of paragraph 17.3 through 17.11Section 16(c), any determination (individually, a “Determination”) all determinations required to be made under this paragraph 17Section 16, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, made by a “Big Four” accounting firm retained by the Company as its auditor at Company’s expense, by nationally recognized tax counsel mutually acceptable to Company and Employee the time such determinations are required (the “Tax CounselAccounting Firm”). Tax Counsel ) which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to the Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from the Company that there has been a Payment, or such other earlier time or times as is reasonably requested required by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 16, shall be paid by the Company or Employeeto Executive within ten (10) business days of the Company’s receipt of the Accounting Firm’s determination. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive’s applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive binding upon the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections 4999 and 280G Section 409A at the time of the Codeinitial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by the Company should have been made (“Underpayment”), and if upon any reasonable written request from Employee or Company consistent with the calculations required to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, be made hereunder. If Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm should determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to Employeeor for the benefit of Executive.
17.3 (c) Executive shall notify the Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim would require the payment by Employee against the Company under this paragraph 17 (“Claim”), includingof the Gross-Up Payment. Such notification shall be given as soon as practicable, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto in no event later than ten (10) business days after Executive has been informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim, and shall apprise the Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause required to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty- (30)- 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 thirty- (30)- day period that the Company desires to consent such claim, Executive shall:
(i) give the Company any information reasonably required by the Company relating to such claim, (ii) take such action in connection with contesting such Employee Claim claim as the Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, but not limited to, accepting legal representation with respect to such claim by an attorney reasonably designated by Company (it being understood and agreed selected by the parties hereto Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relation to such claim; provided, however, that the terms of any such retention shall expressly provide that Company shall be solely responsible 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 for (A) any Excise Tax or federal or state income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses, and (B) any federal, state and local income tax imposed with respect to the payment of amounts pursuant to clause (A) above and this clause (B), based on the highest marginal income tax rate applicable to Executive for the tax year such payments are includable in his taxable income. Without limitation on the foregoing provisions of this Section 16(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees and disbursements administrative appeals, proceedings, hearing sand conferences with the taxing authority in respect of such counsel claim and may, at its sole option, either direct Executive to pay the tax claimed and sxx for a refund or contest the claim in any expertspermissible manner, and 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, however, that if the Company directs Executive to pay such claim and sxx for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless from (X) any Excise Tax or federal or state 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 (Y) any federal, state and local income tax imposed with respect to the payment of amounts pursuant to clause (X) above and this clause (Y), based on the highest marginal income tax rate applicable to Executive for the tax year such payments are includable in his taxable income; and further provided that 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 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 within respect to which a Gross-Up Payment would be payable hereunder and 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 Executive of an amount advanced by the Company pursuant to Section 16(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 16(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto) and, as and when received, an amount equal to any savings in federal and state income taxes realized by Executive by reason of the payment to the Company of such refunds and interest. If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 16(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the execution Company does not notify Executive in writing of powers its intent to contest such denial of attorneyrefund prior to the expiration of thirty (30) days after such determination, provided that:then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 19.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments or distributions being individually referred to herein as a “"Payment,” " and any two or more of such payments or distributions being referred to herein as “"Payments”"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”") (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “"Excise Tax”"), then Employee shall be entitled to receive an additional payment or payments (individually referred to herein as a “"Gross-Up Payment” " and any two or more of such additional payments being referred to herein as “"Gross-Up Payments”") in an amount such that after payment by Employee of all taxes (as defined in paragraph 17.1119.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
17.2 19.2 Subject to the provisions of paragraph 17.3 19.3 through 17.1119.11, any determination (individually, a “"Determination”") required to be made under this paragraph 1719, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at Company’s 's expense, by nationally recognized tax counsel mutually acceptable to Company and Employee (“"Tax Counsel”"). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to Company and Employee within 15 business days of the termination of Employee’s 's employment, if applicable, or such other time or times as is reasonably requested by Company or Employee. If Tax Counsel makes the initial AMENDED AND RESTATED EMPLOYMENT AGREEMENT--THOMXX X. XXXXX -45- Determination that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments. Employee shall have the right to dispute any Determination (a “"Dispute”") within 15 business days after delivery of Tax Counsel’s 's opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination shall be paid by Company to Employee within five business days of Employee’s 's receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s 's right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 19.3 through 17.11 19.11 below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“"Underpayment”"), and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s 's own initiative, Tax Counsel, at Company’s 's expense, thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s 's expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employee.
17.3 19.3 Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’', accountants’', and experts’ ' fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.1019.10) that any Payment is subject to the Excise Tax.
17.4 19.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by Employee against Company under this paragraph 17 19 (“"Claim”"), including, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.319.3, then such party shall promptly notify the other party hereto in writing of such Claim (“"Tax Claim Notice”").
17.5 19.5 If a Claim is asserted against Employee (“"Employee Claim”"), Employee shall take or cause to be taken such action in connection with contesting such Employee Claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are reasonably AMENDED AND RESTATED EMPLOYMENT AGREEMENT--THOMXX X. XXXXX -46- designated by Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that Company shall be solely responsible for the payment of any and all fees and disbursements of such counsel and any experts) and the execution of powers of attorney, provided that:
19.5.1 within 30 calendar days after Company receives or delivers, as the case may be, the Tax Claim Notice relating to such Employee Claim (or such earlier date that any payment of the taxes claimed is due from Employee, but in no event sooner than five calendar days after Company receives or delivers such Tax Claim Notice), Company shall have notified Employee in writing ("Election Notice") that Company does not dispute its obligations (including, but not limited to, its indemnity obligations) under this Agreement and that Company elects to contest, and to control the defense or prosecution of, such Employee Claim at Company's sole risk and sole cost and expense; and
19.5.2 Company shall have advanced to Employee on an interest-free basis, the total amount of the tax claimed in order for Employee, at Company's request, to pay or cause to be paid the tax claimed, file a claim for refund of such tax and, subject to the provisions of the last sentence of paragraph 19.7, sue xxx a refund of such tax if such claim for refund is disallowed by the appropriate taxing authority (it being understood and agreed by the parties hereto that Company shall only be entitled to sue xxx a refund and Company shall not be entitled to initiate any proceeding in, for example, United States Tax Court) and shall indemnify and hold Employee harmless, on a fully grossed-up after tax basis, from any tax imposed with respect to such advance or with respect to any imputed income with respect to such advance; and
19.5.3 Company shall reimburse Employee for any and all costs and expenses resulting from any such request by Company and shall indemnify and hold Employee harmless, on fully grossed-up after-tax basis, from any tax imposed as a result of such reimbursement.
19.6 Subject to the provisions of paragraph 19.5 hereof, Company shall have the right to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim by all appropriate proceedings, which proceedings shall be defended or prosecuted diligently by Company to a Final Determination; provided, however, that (i) Company shall not, without Employee's prior written consent, enter into any compromise or settlement of such Employee Claim that would adversely affect Employee, (ii) any request from Company to Employee regarding any extension of the statute of limitations relating to assessment, payment, or collection of taxes for the AMENDED AND RESTATED EMPLOYMENT AGREEMENT--THOMXX X. XXXXX -47- taxable year of Employee with respect to which the contested issues involved in, and amount of, Employee Claim relate is limited solely to such contested issues and amount, and (iii) Company's control of any contest or proceeding shall be limited to issues with respect to Employee Claim and Employee shall be entitled to settle or contest, in his sole and absolute discretion, any other issue raised by the Internal Revenue Service or any other taxing authority. So long as Company is diligently defending or prosecuting such Employee Claim, Employee shall provide or cause to be provided to Company any information reasonably requested by Company that relates to such Employee Claim, and shall otherwise cooperate with Company and its representatives in good faith in order to contest effectively such Employee Claim. Company shall keep Employee informed of all developments and events relating to any such Employee Claim (including, without limitation, providing to Employee copies of all written materials pertaining to any such Employee Claim), and Employee or his authorized representatives shall be entitled, at Employee's expense, to participate in all conferences, meetings and proceedings relating to any such Employee Claim.
19.7 If, after actual receipt by Employee of an amount of a tax claimed (pursuant to an Employee Claim) that has been advanced by Company pursuant to paragraph 19.5.2 hereof, the extent of the liability of Company hereunder with respect to such tax claimed has been established by a Final Determination, Employee shall promptly pay or cause to be paid to Company any refund actually received by, or actually credited to, Employee with respect to such tax (together with any interest paid or credited thereon by the taxing authority and any recovery of legal fees from such taxing authority related thereto), except to the extent that any amounts are then due and payable by Company to Employee, whether under the provisions of this Agreement or otherwise. If, after the receipt by Employee of an amount advanced by Company pursuant to paragraph 19.5.2, a determination is made by the Internal Revenue Service or other appropriate taxing authority that Employee shall not be entitled to any refund with respect to such tax claimed and Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of any Gross-Up Payments and other payments required to be paid hereunder.
19.8 With respect to any Employee Claim, if Company fails to deliver an Election Notice to Employee within the period provided in paragraph 19.5.1 hereof or, after delivery of such Election Notice, Company fails to comply with the provisions of paragraph 19.5.2, 19.5.3 or 19.6 hereof, then Employee shall at any time thereafter have the right (but not the obligation), at his election and in his sole and absolute discretion, to defend or prosecute, at the sole cost, AMENDED AND RESTATED EMPLOYMENT AGREEMENT--THOMXX X. XXXXX -48- expense and risk of Company, such Employee Claim. Employee shall have full control of such defense or prosecution and such proceedings, including any settlement or compromise thereof. If requested by Employee, Company shall cooperate, and shall cause its affiliates to cooperate, in good faith with Employee and his authorized representatives in order to contest effectively such Employee Claim. Company may attend, but not participate in or control, any defense, prosecution, settlement or compromise of any Employee Claim controlled by Employee pursuant to this paragraph 19.8 and shall bear its own costs and expenses with respect thereto. In the case of any Employee Claim that is defended or prosecuted by Employee, Employee shall, from time to time, be entitled to current payment, on a fully grossed-up after tax basis, from Company with respect to costs and expenses incurred by Employee in connection with such defense or prosecution.
19.9 In the case of any Employee Claim that is defended or prosecuted to a Final Determination pursuant to the terms of this paragraph 19.9, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim that have not theretofore been paid by Company to Employee, together with the costs and expenses, on a fully grossed-up after tax basis, incurred in connection therewith that have not theretofore been paid by Company to Employee, within ten calendar days after such Final Determination. In the case of any Employee Claim not covered by the preceding sentence, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim at least ten calendar days before the date payment of such taxes is due from Employee, except where payment of such taxes is sooner required under the provisions of this paragraph 19.9, in which case payment of such taxes (and payment, on a fully grossed-up after tax basis, of any costs and expenses required to be paid under this paragraph 19.9 shall be made within the time and in the manner otherwise provided in this paragraph 19.9.
19.10 For purposes of this Agreement, the term "Final Determination" shall mean (A) a decision, judgment, decree or other order by a court or other tribunal with appropriate jurisdiction, which has become final and non-appealable; (B) a final and binding settlement or compromise with an administrative agency with appropriate jurisdiction, including, but not limited to, a closing agreement under Section 7121 of the Code; (C) any disallowance of a claim for refund or credit in respect to an overpayment of tax unless a suit is filed on a timely basis; or (D) any final disposition by reason of the expiration of all applicable statutes of limitations.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstanding, in the event if it shall be determined that any payment or distribution by the Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 4.5 (any such payments or distributions being individually referred to herein as a “"Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ") would be subject to the excise tax imposed by Code Section 4999 of the Internal Revenue Code of 19864999, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “"Excise Tax”"), then Employee Executive shall be entitled to receive an additional receive, in addition to the Payment, a payment or payments (individually referred to herein as a “"Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”") in an amount such that that, after payment by Employee Executive of all taxes (as defined in paragraph 17.11including any interest or penalties imposed with respect to such taxes), including, without limitation, any federal or state income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of such Executive will have received the Gross-Up Payment in an amount equal to the Excise Tax imposed upon the PaymentsPayment.
17.2 (b) Subject to the provisions of paragraph 17.3 through 17.11Section 4.5(c), any determination (individually, a “Determination”) all determinations required to be made under this paragraph 17subparagraph, including whether and when a Gross-Up Payment is required 12 and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by a nationally recognized tax counsel mutually acceptable to accounting firm retained by the Company and Employee as its auditor at the time such determinations are required (“Tax Counsel”). Tax Counsel the "Accounting Firm") which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to the Company and Employee Executive within 15 business days of the termination receipt of Employee’s employment, if applicablenotice from the Company that there has been a Payment, or such other earlier time or times as is reasonably requested required by Company or Employeethe Company. If Tax Counsel makes at such time the initial Determination Accounting Firm either is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, or is retained by the Company following a Change in Control, Executive may, in his sole discretion, appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 4.5, shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive's applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive binding upon the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Code Section 4999 and 280G at the time of the Codeinitial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by the Company should have been made (“"Underpayment”"), and if upon any reasonable written request from Employee or Company consistent with the calculations required to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, be made hereunder. If Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to Employeeor for the benefit of Executive.
17.3 (c) Executive shall notify the Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim would require the payment by Employee against the Company under this paragraph 17 (“Claim”), includingof the Gross-Up Payment. Such notification shall be given as soon as practicable, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto in no event later than ten business days after Executive has been informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim, and shall apprise the Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause required to be taken paid. Executive shall not pay such claim prior to the expiration of the 30-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 30-day period that the Company desires to contest such claim, Executive shall:
(i) give the Company any information reasonably required by the Company relating to such claim,
(ii) take such action in connection with contesting such Employee Claim claim as the Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, but not limited to, accepting legal representation with respect to such claim by an attorney reasonably designated by Company (it being understood and agreed selected by the parties hereto Company, 13
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relation to such claim; provided, however, that the terms of any such retention shall expressly provide that Company shall be solely responsible 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 for (A) any Excise Tax or federal or state income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses, and (B) any federal, state and local income tax imposed with respect to the payment of amounts pursuant to clause (A) above and this clause (B), based on the highest marginal income tax rate applicable to Executive for the tax year such payments are includible in his taxable income. Without limitation on the foregoing provisions of this Section 4.5(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or coxxxst the claim in any expertspermissible manner, and 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, however, that if the Company directs Executive to pay such claim and sue for a refund, the Xompany shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless from (X) any Excise Tax or federal or state 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 (Y) any federal, state and local income tax imposed with respect to the payment of amounts pursuant to clause (X) above and this clause (Y), based on the highest marginal income tax rate applicable to Executive for the tax year such payments are includible in his taxable income; and further provided that 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 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 within respect to which a Gross-Up Payment would be payable hereunder and 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 Executive of an amount advanced by the Company pursuant to Section 4.5(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of Section 4.5(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto) and, as and when received, an amount equal to any savings in federal and state income taxes realized by Executive by reason of the payment to the Company of such refunds and interest plus the amounts in this clause. If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 4.5(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim 14 and the execution Company does not notify Executive in writing of powers its intent to contest such denial of attorneyrefund prior to the expiration of 30 days after such determination, provided that:then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstanding, in the event if it shall be determined that any payment or distribution by the Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise) is determined without regard to any additional payments required under this Section 16 (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986409A, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional receive, in addition to the Payment, a payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that that, after payment by Employee the Executive of all taxes (as defined in paragraph 17.11including any interest or penalties imposed with respect to such taxes), including, without limitation, any federal or state income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of such Executive will have received the Gross-Up Payment in an amount equal to the Excise Tax imposed upon the PaymentsPayment. The maximum amount of any Gross-Up Payment shall be $250,000.
17.2 (b) Subject to the provisions provision of paragraph 17.3 through 17.11Section 16(c), any determination (individually, a “Determination”) all determinations required to be made under this paragraph 17Section 16, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, made by a “Big Four” accounting firm retained by the Company as its auditor at Company’s expense, by nationally recognized tax counsel mutually acceptable to Company and Employee the time such determinations are required (the “Tax CounselAccounting Firm”). Tax Counsel ) which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to the Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from the Company that there has been a Payment, or such other earlier time or times as is reasonably requested required by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 16, shall be paid by the Company or Employeeto Executive within ten (10) business days of the Company’s receipt of the Accounting Firm’s determination. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive’s applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive binding upon the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections 4999 and 280G Section 409A at the time of the Codeinitial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by the Company should have been made (“Underpayment”), and if upon any reasonable written request from Employee or Company consistent with the calculations required to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, be made hereunder. If Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm should determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to Employeeor for the benefit of Executive.
17.3 (c) Executive shall notify the Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim would require the payment by Employee against the Company under this paragraph 17 (“Claim”), includingof the Gross-Up Payment. Such notification shall be given as soon as practicable, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto in no event later than ten (10) business days after Executive has been informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim, and shall apprise the Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause required to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty- (30)- 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 thirty- (30)- day period that the Company desires to consent such claim, Executive shall:
(i) give the Company any information reasonably required by the Company relating to such claim, (ii) take such action in connection with contesting such Employee Claim claim as the Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, but not limited to, accepting legal representation with respect to such claim by an attorney reasonably designated by Company (it being understood and agreed selected by the parties hereto Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relation to such claim; provided, however, that the terms of any such retention shall expressly provide that Company shall be solely responsible 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 for (A) any Excise Tax or federal or state income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses, and (B) any federal, state and local income tax imposed with respect to the payment of amounts pursuant to clause (A) above and this clause (B), based on the highest marginal income tax rate applicable to Executive for the tax year such payments are includable in his taxable income. Without limitation on the foregoing provisions of this Section 16(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees and disbursements administrative appeals, proceedings, hearing sand conferences with the taxing authority in respect of such counsel claim and may, at its sole option, either direct Executive to pay the tax claimed and sxx for a refund or contest the claim in any expertspermissible manner, and 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, however, that if the Company directs Executive to pay such claim and sxx for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless from (X) any Excise Tax or federal or state 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 (Y) any federal, state and local income tax imposed with respect to the payment of amounts pursuant to clause (X) above and this clause (Y), based on the highest marginal income tax rate applicable to Executive for the tax year such payments are includable in his taxable income; and further provided that 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 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 within respect to which a Gross-Up Payment would be payable hereunder and 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 Executive of an amount advanced by the Company pursuant to Section 16(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company’s complying with the requirements of Section 16(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto) and, as and when received, an amount equal to any savings in federal and state income taxes realized by Executive by reason of the payment to the Company of such refunds and interest. If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 16(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the execution Company does not notify Executive in writing of powers its intent to contest such denial of attorneyrefund prior to the expiration of thirty (30) days after such determination, provided that:then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 19.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments or distributions being individually referred to herein as a “"Payment,” " and any two or more of such payments or distributions being referred to herein as “"Payments”"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”") (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “"Excise Tax”"), then Employee shall be entitled to receive an additional payment or payments (individually referred to herein as a “"Gross-Up Payment” " and any two or more of such additional payments being referred to herein as “"Gross-Up Payments”") in an amount such that after payment by Employee of all taxes (as defined in paragraph 17.1119.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
17.2 19.2 Subject to the provisions of paragraph 17.3 19.3 through 17.1119.11, any determination (individually, a “"Determination”") required to be made under this paragraph 1719, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at Company’s 's expense, by nationally recognized tax counsel mutually acceptable to Company and Employee (“"Tax Counsel”"). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to Company and Employee within 15 business days of the termination of Employee’s 's employment, if applicable, or such other time or times as is reasonably requested by Company or Employee. If Tax Counsel makes the initial Determination that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments. Employee shall have the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employee.Employment Agreement -- Willxxx Xxxx Xxxgx
17.3 19.3 Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’', accountants’', and experts’ ' fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.1019.10) that any Payment is subject to the Excise Tax.
17.4 19.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by Employee against Company under this paragraph 17 19 (“"Claim”"), including, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.319.3, then such party shall promptly notify the other party hereto in writing of such Claim (“"Tax Claim Notice”").
17.5 19.5 If a Claim is asserted against Employee (“"Employee Claim”"), Employee shall take or cause to be taken such action in connection with contesting such Employee Claim as Company shall reasonably request in writing from time to time, including the retention of counsel Employment Agreement -- Willxxx Xxxx Xxxgx
19.5.1 within 30 calendar days after Company receives or delivers, as the case may be, the Tax Claim Notice relating to such Employee Claim (or such earlier date that any payment of the taxes claimed is due from Employee, but in no event sooner than five calendar days after Company receives or delivers such Tax Claim Notice), Company shall have notified Employee in writing ("Election Notice") that Company does not dispute its obligations (including, but not limited to, its indemnity obligations) under this Agreement and experts as are reasonably designated that Company elects to contest, and to control the defense or prosecution of, such Employee Claim at Company's sole risk and sole cost and expense; and
19.5.2 Company shall have advanced to Employee on an interest-free basis, the total amount of the tax claimed in order for Employee, at Company's request, to pay or cause to be paid the tax claimed, file a claim for refund of such tax and, subject to the provisions of the last sentence of paragraph 19.7, sue xxx a refund of such tax if such claim for refund is disallowed by Company the appropriate taxing authority (it being understood and agreed by the parties hereto that Company shall only be entitled to sue xxx a refund and Company shall not be entitled to initiate any proceeding in, for example, United States Tax Court) and shall indemnify and hold Employee harmless, on a fully grossed-up after tax basis, from any tax imposed with respect to such advance or with respect to any imputed income with respect to such advance; and
19.5.3 Company shall reimburse Employee for any and all costs and expenses resulting from any such request by Company and shall indemnify and hold Employee harmless, on fully grossed-up after-tax basis, from any tax imposed as a result of such reimbursement.
19.6 Subject to the provisions of paragraph 19.5 hereof, Company shall have the right to defend or prosecute, at the sole cost, expense and Employment Agreement -- Willxxx Xxxx Xxxgx -48- 49 risk of Company, such Employee Claim by all appropriate proceedings, which proceedings shall be defended or prosecuted diligently by Company to a Final Determination; provided, however, that (i) Company shall not, without Employee's prior written consent, enter into any compromise or settlement of such Employee Claim that would adversely affect Employee, (ii) any request from Company to Employee regarding any extension of the statute of limitations relating to assessment, payment, or collection of taxes for the taxable year of Employee with respect to which the contested issues involved in, and amount of, the Employee Claim relate is limited solely to such contested issues and amount, and (iii) Company's control of any contest or proceeding shall be limited to issues with respect to the Employee Claim and Employee shall be entitled to settle or contest, in his sole and absolute discretion, any other issue raised by the Internal Revenue Service or any other taxing authority. So long as Company is diligently defending or prosecuting such Employee Claim, Employee shall provide or cause to be provided to Company any information reasonably requested by Company that relates to such Employee Claim, and shall otherwise cooperate with Company and its representatives in good faith in order to contest effectively such Employee Claim. Company shall keep Employee informed of all developments and events relating to any such Employee Claim (including, without limitation, providing to Employee copies of all written materials pertaining to any such Employee Claim), and Employee or his authorized representatives shall be entitled, at Employee's expense, to participate in all conferences, meetings and proceedings relating to any such Employee Claim.
19.7 If, after actual receipt by Employee of an amount of a tax claimed (pursuant to an Employee Claim) that has been advanced by Company pursuant to paragraph 19.5.2 hereof, the extent of the liability of Company hereunder with respect to such tax claimed has been established by a Final Determination, Employee shall promptly pay or cause to be paid to Company any refund actually received by, or actually credited to, Employee with respect to such tax (together with any interest paid or credited thereon by the taxing authority and any recovery of legal fees from such taxing authority related thereto), except to the extent that any amounts are then due and payable by Company to Employee, whether under the provisions of this Agreement or otherwise. If, after the receipt by Employee of an amount advanced by Company pursuant to paragraph 19.5.2, a determination is made by the Internal Revenue Service or other appropriate taxing authority that Employee shall not be entitled to any refund with respect to such tax claimed and Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days Employment Agreement -- Willxxx Xxxx Xxxgx -49- 50 after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of any Gross-Up Payments and other payments required to be paid hereunder.
19.8 With respect to any Employee Claim, if Company fails to deliver an Election Notice to Employee within the period provided in paragraph 19.5.1 hereof or, after delivery of such Election Notice, Company fails to comply with the provisions of paragraph 19.5.2, 19.5.3 or 19.6 hereof, then Employee shall at any time thereafter have the right (but not the obligation), at his election and in his sole and absolute discretion, to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim. Employee shall have full control of such defense or prosecution and such proceedings, including any settlement or compromise thereof. If requested by Employee, Company shall cooperate, and shall cause its affiliates to cooperate, in good faith with Employee and his authorized representatives in order to contest effectively such Employee Claim. Company may attend, but not participate in or control, any defense, prosecution, settlement or compromise of any Employee Claim controlled by Employee pursuant to this paragraph 19.8 and shall bear its own costs and expenses with respect thereto. In the case of any Employee Claim that is defended or prosecuted by Employee, Employee shall, from time to time, be entitled to current payment, on a fully grossed-up after tax basis, from Company with respect to costs and expenses incurred by Employee in connection with such defense or prosecution.
19.9 In the case of any Employee Claim that is defended or prosecuted to a Final Determination pursuant to the terms of any such retention shall expressly provide that this paragraph 19.9, Company shall be solely responsible for pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim that have not theretofore been paid by Company to Employee, together with the costs and expenses, on a fully grossed-up after tax basis, incurred in connection therewith that have not theretofore been paid by Company to Employee, within ten calendar days after such Final Determination. In the case of any Employee Claim not covered by the preceding sentence, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim at least ten calendar days before the date payment of any and all fees and disbursements such taxes is due from Employee, except where payment of such counsel taxes is sooner required under the provisions of this paragraph 19.9, in which case payment of such taxes (and payment, on a fully grossed-up after tax basis, of any expertscosts and expenses required to be Employment Agreement -- Willxxx Xxxx Xxxgx -50- 51 paid under this paragraph 19.9 shall be made within the time and in the manner otherwise provided in this paragraph 19.9.
19.10 For purposes of this Agreement, the term "Final Determination" shall mean (A) a decision, judgment, decree or other order by a court or other tribunal with appropriate jurisdiction, which has become final and non-appealable; (B) a final and binding settlement or compromise with an administrative agency with appropriate jurisdiction, including, but not limited to, a closing agreement under Section 7121 of the execution Code; (C) any disallowance of powers a claim for refund or credit in respect to an overpayment of attorney, provided that:tax unless a suit is filed on a timely basis; or (D) any final disposition by reason of the expiration of all applicable statutes of limitations.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 Company agrees that:
6.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 6) (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or if any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being hereafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that after payment by Employee Executive of all taxes (as defined in paragraph 17.11including 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, Employee Executive retains an amount of such the Gross-Up Payment equal to the Excise Tax imposed upon the PaymentsPayment.
17.2 6.2 Subject to the provisions of paragraph 17.3 through 17.11Section 6.3, any determination (individuallybelow, a “Determination”) all determinations required to be made under this paragraph 17Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by nationally recognized tax counsel mutually acceptable to the accounting firm which is then serving as the auditors for Company and Employee (the “Tax CounselAccounting Firm”). Tax Counsel , which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that there has been a Payment, or such other earlier time or times as is reasonably requested by Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change in Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Company or Employeeto Executive within five (5) days of the receipt of the Accounting Firm’s determination. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive’s applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any good faith determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive binding upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that Company exhausts its remedies pursuant to Section 6.3, below, and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employeeor for the benefit of Executive.
17.3 6.3 Executive shall notify Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee would require the payment by Company under paragraph 17.3, then such party of a Gross-Up Payment. Such notification shall promptly notify the other party hereto be given as soon as practicable but no later than fifteen (15) business days after Executive is informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim and shall apprise Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty (30) 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 Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
6.3.1 Give Company any information reasonably requested by Company relating to such claim;
6.3.2 Take such action in connection with contesting such Employee Claim claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably designated selected by Company;
6.3.3 Cooperate with Company (it being understood and agreed by the parties hereto that the terms of in good faith in order effectively to contest such claim; and
6.3.4 Permit Company to participate in any proceedings relating to such retention shall expressly provide claim; provided, however, that Company shall be solely responsible 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 the any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs an expenses. Without limiting the foregoing provisions of this Section 6.3, the company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel 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 expertspermissible manner; and 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 Company shall determine; provided further, however, that if Company directs Executive to pay such claim and xxx for a refund, Company shall advance the amount of such payment to Executive on an interest-free basis ad shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax 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 further provided that 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 is claimed to be due is limited solely to such contested amount. further more, Company’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 contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
6.4 If, after the receipt by Executive of an amount advanced by Company pursuant to Section 6.3 above, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Company’s complying with the requirements of said interest paid or credited thereon, after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by Company pursuant to said Section 6.3, a determination is made that Executive shall not be entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid; and the execution amount of powers such advance shall offset, to the extent thereof, the amount of attorney, provided that:the Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Employment Agreement (Allscripts Healthcare Solutions Inc)
Certain Additional Payments by Company. 17.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments or distributions being individually referred to herein as a “"Payment,” " and any two or more of such payments or distributions being referred to herein as “"Payments”"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”") (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “"Excise Tax”"), then Employee shall be entitled to receive an additional payment or payments (individually referred to herein as a “"Gross-Up Payment” " and any two or more of such additional payments being referred to herein as “"Gross-Up Payments”") in an amount such that after payment by Employee of all taxes (as defined in paragraph 17.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
17.2 Subject to the provisions of paragraph 17.3 through 17.11, any determination (individually, a “"Determination”") required to be made under this paragraph 17, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at Company’s 's expense, by nationally recognized tax counsel mutually acceptable to Company and Employee (“"Tax Counsel”"). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to Company and Employee within 15 business days of the termination of Employee’s 's employment, if applicable, or such other time or times as is reasonably requested by Company or Employee. If Tax Counsel makes the initial Determination that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments. Employee shall have the right to dispute any Determination (a “"Dispute”") within 15 business days after delivery of Tax Counsel’s 's opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination shall be paid by Company to Employee within five business days of Employee’s 's receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s 's right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, EMPLOYMENT AGREEMENT--CHRIXXXXXXX X. XXXXXXX however, to the provisions of paragraph 17.3 through 17.11 below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“"Underpayment”"), and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s 's own initiative, Tax Counsel, at Company’s 's expense, thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s 's expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employee.
17.3 Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’', accountants’', and experts’ ' fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“"Claim”"), including, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto in writing of such Claim (“"Tax Claim Notice”").
17.5 If a Claim is asserted against Employee (“"Employee Claim”"), Employee shall take or cause to be taken such action in connection with contesting such Employee Claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are reasonably designated by Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that Company shall be solely responsible for the payment of any and all fees and disbursements of such counsel and any experts) and the execution of powers of attorney, provided that:
17.5.1 within 30 calendar days after Company receives or delivers, as the case may be, the Tax Claim Notice relating to such Employee Claim (or such earlier date that any payment of the taxes claimed is due from Employee, but in no event sooner than five calendar days after Company receives or delivers such Tax Claim Notice), Company EMPLOYMENT AGREEMENT--CHRIXXXXXXX X. XXXXXXX shall have notified Employee in writing ("Election Notice") that Company does not dispute its obligations (including, but not limited to, its indemnity obligations) under this Agreement and that Company elects to contest, and to control the defense or prosecution of, such Employee Claim at Company's sole risk and sole cost and expense; and
17.5.2 Company shall have advanced to Employee on an interest-free basis, the total amount of the tax claimed in order for Employee, at Company's request, to pay or cause to be paid the tax claimed, file a claim for refund of such tax and, subject to the provisions of the last sentence of paragraph 17.7, sue xxx a refund of such tax if such claim for refund is disallowed by the appropriate taxing authority (it being understood and agreed by the parties hereto that Company shall only be entitled to sue xxx a refund and Company shall not be entitled to initiate any proceeding in, for example, United States Tax Court) and shall indemnify and hold Employee harmless, on a fully grossed-up after tax basis, from any tax imposed with respect to such advance or with respect to any imputed income with respect to such advance; and
17.5.3 Company shall reimburse Employee for any and all costs and expenses resulting from any such request by Company and shall indemnify and hold Employee harmless, on fully grossed-up after-tax basis, from any tax imposed as a result of such reimbursement.
17.6 Subject to the provisions of paragraph 17.5 hereof, Company shall have the right to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim by all appropriate proceedings, which proceedings shall be defended or prosecuted diligently by Company to a Final Determination; provided, however, that (i) Company shall not, without Employee's prior written consent, enter into any compromise or settlement of such Employee Claim that would adversely affect Employee, (ii) any request from Company to Employee regarding any extension of the statute of limitations relating to assessment, payment, or collection of taxes for the taxable year of Employee with respect to which the contested issues involved in, and amount of, the Employee Claim relate is limited solely to such contested issues and amount, and (iii) Company's control of any contest or proceeding shall be limited to issues with respect to the Employee Claim and Employee shall be entitled to settle or contest, in his sole and absolute discretion, any other issue raised by the Internal Revenue Service or any other taxing authority. So long as Company is diligently defending or prosecuting such Employee Claim, Employee shall provide or cause to be provided to Company any information reasonably requested by Company that relates to such Employee Claim, and shall otherwise cooperate with Company and its EMPLOYMENT AGREEMENT--CHRIXXXXXXX X. XXXXXXX representatives in good faith in order to contest effectively such Employee Claim. Company shall keep Employee informed of all developments and events relating to any such Employee Claim (including, without limitation, providing to Employee copies of all written materials pertaining to any such Employee Claim), and Employee or his authorized representatives shall be entitled, at Employee's expense, to participate in all conferences, meetings and proceedings relating to any such Employee Claim.
17.7 If, after actual receipt by Employee of an amount of a tax claimed (pursuant to an Employee Claim) that has been advanced by Company pursuant to paragraph 17.5.2 hereof, the extent of the liability of Company hereunder with respect to such tax claimed has been established by a Final Determination, Employee shall promptly pay or cause to be paid to Company any refund actually received by, or actually credited to, Employee with respect to such tax (together with any interest paid or credited thereon by the taxing authority and any recovery of legal fees from such taxing authority related thereto), except to the extent that any amounts are then due and payable by Company to Employee, whether under the provisions of this Agreement or otherwise. If, after the receipt by Employee of an amount advanced by Company pursuant to paragraph 17.5.2, a determination is made by the Internal Revenue Service or other appropriate taxing authority that Employee shall not be entitled to any refund with respect to such tax claimed and Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of any Gross-Up Payments and other payments required to be paid hereunder.
17.8 With respect to any Employee Claim, if Company fails to deliver an Election Notice to Employee within the period provided in paragraph 17.5.1 hereof or, after delivery of such Election Notice, Company fails to comply with the provisions of paragraph 17.5.2, 17.5.3 or 17.6 hereof, then Employee shall at any time thereafter have the right (but not the obligation), at his election and in his sole and absolute discretion, to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim. Employee shall have full control of such defense or prosecution and such proceedings, including any settlement or compromise thereof. If requested by Employee, Company shall cooperate, and shall cause its affiliates to cooperate, in good faith with Employee and his authorized representatives in order to contest effectively such Employee Claim. Company may attend, but not participate in or control, any defense, prosecution, settlement or compromise of any Employee Claim controlled by Employee pursuant to this paragraph 17.8 and shall bear its own costs and expenses with respect thereto. In the case of any Employee EMPLOYMENT AGREEMENT--CHRIXXXXXXX X. XXXXXXX Claim that is defended or prosecuted by Employee, Employee shall, from time to time, be entitled to current payment, on a fully grossed-up after tax basis, from Company with respect to costs and expenses incurred by Employee in connection with such defense or prosecution.
17.9 In the case of any Employee Claim that is defended or prosecuted to a Final Determination pursuant to the terms of this paragraph 17.9, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim that have not theretofore been paid by Company to Employee, together with the costs and expenses, on a fully grossed-up after tax basis, incurred in connection therewith that have not theretofore been paid by Company to Employee, within ten calendar days after such Final Determination. In the case of any Employee Claim not covered by the preceding sentence, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim at least ten calendar days before the date payment of such taxes is due from Employee, except where payment of such taxes is sooner required under the provisions of this paragraph 17.9, in which case payment of such taxes (and payment, on a fully grossed-up after tax basis, of any costs and expenses required to be paid under this paragraph 17.9 shall be made within the time and in the manner otherwise provided in this paragraph 17.9.
17.10 For purposes of this Agreement, the term "Final Determination" shall mean (A) a decision, judgment, decree or other order by a court or other tribunal with appropriate jurisdiction, which has become final and non-appealable; (B) a final and binding settlement or compromise with an administrative agency with appropriate jurisdiction, including, but not limited to, a closing agreement under Section 7121 of the Code; (C) any disallowance of a claim for refund or credit in respect to an overpayment of tax unless a suit is filed on a timely basis; or (D) any final disposition by reason of the expiration of all applicable statutes of limitations.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstandingnotwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 17) (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that after payment by Employee Executive of all taxes (as defined in paragraph 17.11including 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, Employee Executive retains an amount of such the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing, if it shall be determined that Executive is entitled to a Gross-Up Payment, then Company and Executive shall negotiate in good faith to cause this Agreement to be amended, to the extent possible, such that the receipt of Payments would not give rise to any Excise Tax.
17.2 (b) Subject to the provisions of paragraph 17.3 through 17.11Section 17(c), any determination (individually, a “Determination”) all determinations required to be made under this paragraph Section 17, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by nationally recognized tax counsel mutually a certified public accounting firm reasonably acceptable to Company and Employee as may be designated by Executive (the “Tax CounselAccounting Firm”). Tax Counsel ) which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to Company and Employee Executive within 15 business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that there has been a Payment, or such other earlier time or times as is reasonably requested by Company or EmployeeCompany. If Tax Counsel makes All fees and expenses of the initial Determination that no Excise Tax is payable Accounting Firm shall be borne solely by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or PaymentsCompany. Employee shall have the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Any Gross-Up Payment, if any, as determined pursuant to such Determination this Section 17, shall be paid by Company to Employee within Executive by the later of (i) the due date for the payment of the Excise tax or (ii) five business days of Employee’s the receipt of such Determinationthe Accounting Firm’s determination. The existence of a Dispute shall not in any way affect Employee’s right to receive Any determination by the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination Accounting Firm shall be binding, final and conclusive binding upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that Company exhausts its remedies pursuant to Section 17, and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employeeor for the benefit of Executive five days after receipt of the Accounting Firm’s determination.
17.3 (c) Executive shall notify Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee would require the payment by Company under paragraph 17.3, then such party of a Gross-Up Payment (or an additional Gross-Up Payment). Such notification shall promptly notify the other party hereto be given as soon as practicable but no later than ten business days after Executive is informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim and shall apprise Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i) give Company any information reasonably requested by Company relating to such claim, (ii) take such action in connection with contesting such Employee Claim claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably designated selected by Company,
(iii) cooperate with Company in good faith in order effectively to contest such claim, and
(it being understood and agreed by the parties hereto that the terms of iv) permit Company to participate in any proceedings relating to such retention shall expressly provide claim; provided, however, that Company shall be solely responsible 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 the any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 17(c), Company shall control all proceedings taken in connection with such contest (to the extent applicable to the Excise Tax and the Gross-Up Payment) and, at its sole option, may pursue or forgo any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel claim and may, at its sole option, either direct Executive to pay the tax claimed and sxx for a refund or contest the claim in any expertspermissible manner, and 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 Company shall determine; provided, however, that if Company directs Executive to pay such claim and sxx for a refund, Company shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax 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 further provided that 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 is claimed to be due is limited solely to such contested amount. Furthermore, Company’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 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 Executive of an amount advanced by Company pursuant to Section 17(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Company’s complying with the requirements of Section 17(c)) pay to Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto) five days after receipt of the Accounting Firm’s determination. If, after the receipt by Executive of an amount advanced by Company pursuant to Section 17(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. WITNESS the due execution hereof effective as of powers of attorney, provided thatthe foregoing Effective Date:
Appears in 1 contract
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstanding, in the event if it shall be determined that any payment or distribution by the Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 4.5 (any such payments or distributions being individually referred to herein as a “"Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ") would be subject to the excise tax imposed by Code Section 4999 of the Internal Revenue Code of 19864999, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “"Excise Tax”"), then Employee Executive shall be entitled to receive an additional receive, in addition to the Payment, a payment or payments (individually referred to herein as a “"Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”") in an amount such that that, after payment by Employee Executive of all taxes (as defined in paragraph 17.11including any interest or penalties imposed with respect to such taxes), including, without limitation, any federal or state income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of such Executive will have received the Gross-Up Payment in an amount equal to the Excise Tax imposed upon the PaymentsPayment.
17.2 (b) Subject to the provisions of paragraph 17.3 through 17.11Section 4.5(c), any determination (individually, a “Determination”) all determinations required to be made under this paragraph 17subparagraph, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by a nationally recognized tax counsel mutually acceptable to accounting firm retained by the Company and Employee as its auditor at the time such determinations are required (“Tax Counsel”). Tax Counsel the "Accounting Firm") which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to the Company and Employee Executive within 15 business days of the termination receipt of Employee’s employment, if applicablenotice from the Company that there has been a Payment, or such other earlier time or times as is reasonably requested required by Company or Employeethe Company. If Tax Counsel makes at such time the initial Determination Accounting Firm either is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, or is retained by the Company following a Change in Control, Executive may, in his sole discretion, appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 4.5, shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no 12 Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive's applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive binding upon the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Code Section 4999 and 280G at the time of the Codeinitial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by the Company should have been made (“"Underpayment”"), and if upon any reasonable written request from Employee or Company consistent with the calculations required to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, be made hereunder. If Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to Employeeor for the benefit of Executive.
17.3 (c) Executive shall notify the Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim would require the payment by Employee against the Company under this paragraph 17 (“Claim”), includingof the Gross-Up Payment. Such notification shall be given as soon as practicable, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto in no event later than ten business days after Executive has been informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim, and shall apprise the Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause required to be taken paid. Executive shall not pay such claim prior to the expiration of the 30-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 30-day period that the Company desires to contest such claim, Executive shall:
(i) give the Company any information reasonably required by the Company relating to such claim,
(ii) take such action in connection with contesting such Employee Claim claim as the Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, but not limited to, accepting legal representation with respect to such claim by an attorney reasonably designated by Company (it being understood and agreed selected by the parties hereto Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relation to such claim; provided, however, that the terms of any such retention shall expressly provide that Company shall be solely responsible 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 for (A) any Excise Tax or federal or state income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses, and (B) any federal, state and local income tax imposed with respect to the payment of amounts pursuant to clause (A) above and this clause (B), based on the highest marginal income tax rate applicable to Executive for the tax year such payments are includible in his taxable income. Without limitation on the foregoing provisions of this Section 4.5(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the 13 taxing authority in respect of such counsel claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or coxxxst the claim in any expertspermissible manner, and 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, however, that if the Company directs Executive to pay such claim and sue for a refund, the Xompany shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless from (X) any Excise Tax or federal or state 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 (Y) any federal, state and local income tax imposed with respect to the payment of amounts pursuant to clause (X) above and this clause (Y), based on the highest marginal income tax rate applicable to Executive for the tax year such payments are includible in his taxable income; and further provided that 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 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 within respect to which a Gross-Up Payment would be payable hereunder and 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 Executive of an amount advanced by the Company pursuant to Section 4.5(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of Section 4.5(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto) and, as and when received, an amount equal to any savings in federal and state income taxes realized by Executive by reason of the payment to the Company of such refunds and interest plus the amounts in this clause. If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 4.5(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the execution Company does not notify Executive in writing of powers its intent to contest such denial of attorneyrefund prior to the expiration of 30 days after such determination, provided that:then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company or any of its affiliates successor or affiliate to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, determined with regard to accelerated vesting of stock options and other forms of compensation on account of a change of control as defined in the Code or as the result of any provision in this Agreement, but determined without regard to any additional payments required under this section) (any such payments or distributions being individually referred to herein as a “"Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”") or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “"Excise Tax”"), then Employee Executive shall be entitled to receive an additional payment or payments (individually referred to herein as a “"Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”") in an amount such that after payment by Employee Executive of all taxes (as defined in paragraph 17.11including 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, Employee Executive retains an amount of such the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. 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 rate of taxation in either the state and locality of the Employee's place of employment at the time of the Change in Control or in the state and locality of residence at the time or times of payment, as applicable, net of the maximum reduction in federal income taxes that could be obtained from the deduction of the state and local taxes.
17.2 (b) Subject to the provisions of paragraph 17.3 through 17.11subsection 3.5(c), any determination (individually, a “Determination”) all determinations required to be made under this paragraph 17section, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by nationally recognized tax counsel mutually acceptable to Company and Employee Ernst & Young LLP (“Tax Counsel”). Tax Counsel "the "Accounting Firm") which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to the Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that there has been a Payment, or such other earlier time or times as is reasonably requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this section, shall be paid by the Company or Employeeto Executive within five (5) days of the receipt of the Accounting Firm's determination. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive's applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive binding upon the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by the Company should have been made (“an "Underpayment”"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to subsection 3.5(c) and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to Employeeor for the benefit of Executive.
17.3 (c) Executive shall notify the Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim would require the payment by Employee against the Company under this paragraph 17 (“Claim”), includingof the Gross-Up Payment. Such notification shall be given as soon as practicable, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto no later than ten (10) business days after Executive is informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim, and shall apprise the Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty (30) 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, Executive shall:
(i) give the Company any information reasonably requested by the Company relating to such claim;
(ii) take such action in connection with contesting such Employee Claim claim as the Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are without limitation, accepting legal representation with respect to such claim by an attorney reasonably designated by Company (it being understood and agreed selected by the parties hereto Company;
(iii) cooperate with the Company in good faith in order effectively to contest such claim; and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the terms of any such retention shall expressly provide that Company shall be solely responsible 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 the any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this subsection, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel 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 expertspermissible manner, and 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, however, that if the Company directs Executive to pay such claim and xxx for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax 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 further provided that 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 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 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 Executive of an amount advanced by the Company pursuant to subsection 3.5(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of subsection 3.5(c)) 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 Executive of an amount advanced by the Company pursuant to subsection 3.5(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the execution Company does not notify Executive in writing of powers its intent to contest such denial of attorneyrefund prior to the expiration of thirty (30) days after such determination, provided that:then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
Appears in 1 contract
Samples: Executive Retention Agreement (Allegiant Bancorp Inc/Mo/)
Certain Additional Payments by Company. 17.1 Company agrees that:
6.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 6) (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or if any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being hereafter collectively referred herein to as the “Excise Tax”), then Employee Executive shall be entitled to receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that after payment by Employee Executive of all taxes (as defined in paragraph 17.11including 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, Employee Executive retains an amount of such the Gross-Up Payment equal to the Excise Tax imposed upon the PaymentsPayment.
17.2 6.2 Subject to the provisions of paragraph 17.3 through 17.11Section 6.3, any determination (individuallybelow, a “Determination”) all determinations required to be made under this paragraph 17Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by nationally recognized tax counsel mutually acceptable to the accounting firm which is then serving as the auditors for Company and Employee (the “Tax CounselAccounting Firm”). Tax Counsel , which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to Company and Employee Executive within 15 fifteen (15) business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that there has been a Payment, or such other earlier time or times as is reasonably requested by Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the Change of Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by Company to Executive (or Employeeto the applicable taxing authority on Executive’s behalf) within five (5) days of the receipt of the Accounting Firm’s determination or, if later, on the due date for such taxes. If Tax Counsel makes the initial Determination Accounting Firm determines that no Excise Tax is payable by Employee with respect to a Payment or PaymentsExecutive, it shall furnish Employee Executive with an a written opinion reasonably acceptable that failure to Employee that no report the Excise Tax will be imposed with respect to any such Payment on Executive’s applicable federal income tax return would not result in the imposition of a negligence or Paymentssimilar penalty. Employee shall have Any good faith determination by the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination Accounting Firm shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive binding upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that Company exhausts its remedies pursuant to Section 6.3, below, and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employeeor for the benefit of Executive.
17.3 6.3 Executive shall notify Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee would require the payment by Company under paragraph 17.3, then such party of a Gross-Up Payment. Such notification shall promptly notify the other party hereto be given as soon as practicable but no later than fifteen (15) business days after Executive is informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim and shall apprise Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which Executive gives such notice to Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
6.3.1 Give Company any information reasonably requested by Company relating to such claim;
6.3.2 Take such action in connection with contesting such Employee Claim claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably designated selected by Company;
6.3.3 Cooperate with Company (it being understood and agreed by the parties hereto that the terms of in good faith in order effectively to contest such claim; and
6.3.4 Permit Company to participate in any proceedings relating to such retention shall expressly provide claim; provided, however, that Company shall be solely responsible 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 the any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs an expenses. Without limiting the foregoing provisions of this Section 6.3, Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel claim and may, at its sole option, either direct Executive to pay the tax claimed and sxx for a refund or contest the claim in any expertspermissible manner; and 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 Company shall determine; provided further, however, that if Company directs Executive to pay such claim and sxx for a refund, Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax 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 further provided that 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 is claimed to be due is limited solely to such contested amount. Furthermore, Company’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 contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
6.4 If, after the receipt by Executive of an amount advanced by Company pursuant to Section 6.3 above, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Company’s complying with the requirements of said interest paid or credited thereon, after taxes applicable thereto) promptly pay such refund to Company. If, after the receipt by Executive of an amount advanced by Company pursuant to said Section 6.3, a determination is made that Executive shall not be entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid; and the execution amount of powers such advance shall offset, to the extent thereof, the amount of attorneythe Gross-Up Payment required to be paid.
6.5 Subject to any earlier time limits set forth in this Section 6, provided that:all payments and reimbursements to which Executive is entitled under this Section 6 shall be paid to or on behalf of Executive not later than the end of the taxable year of Executive next following the taxable year of Executive in which Executive (or Company, on Executive’s behalf) remits the related taxes (or, in the event of an audit or litigation with respect to such tax liability, not later than the end of the taxable year of Executive next following the taxable year of Executive in which there is a final resolution of such audit or litigation (whether by reason of completion of the audit, entry of a final and non-appealable judgment, final settlement, or otherwise)).
Appears in 1 contract
Samples: Employment Agreement (Allscripts Healthcare Solutions, Inc.)
Certain Additional Payments by Company. 17.1 (a) Anything in this Agreement to the contrary notwithstandingnotwithstanding and except as set forth below, in the event if it shall be determined that any payment or distribution by Company or any of its affiliates to or for the Executive's benefit of Employee, (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise otherwise, but determined without regard to any additional payments required under this Section 11) (any such payments or distributions being individually referred to herein as a “"Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), ") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest thereon, any and penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being are hereinafter collectively referred herein to as the “"Excise Tax”)") , then Employee Executive shall be entitled to receive an additional payment or payments (individually referred to herein as a “"Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”") in an amount such that after payment by Employee Executive of all taxes (as defined in paragraph 17.11including 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, Employee Executive retains an amount of such the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
17.2 Subject . Notwithstanding the foregoing provisions of this Section 11, if it shall be determined that Executive is entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the greatest amount that could be paid to Executive such that the receipt of Payments would not give rise to any Excise Tax (the "Reduced Amount"), then no Gross-Up Payment shall be made to Executive and the Payments, in the aggregate, shall be reduced to the provisions of paragraph 17.3 through 17.11, any determination (individually, a “Determination”) Reduced Amount. All determinations required to be made under this paragraph 17Section 11, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up PaymentPayment and the assumptions to be utilized in arriving at such determination, shall initially be made, at Company’s expense, made by a nationally recognized tax counsel mutually acceptable to Company and Employee accounting firm as may be designated by Executive (“Tax Counsel”). Tax Counsel the "Accounting Firm") which shall provide detailed supporting legal authorities, calculations, and documentation calculations both to Company and Employee Executive within 15 business days of the termination receipt of Employee’s employment, if applicablenotice from Executive that there has been a Payment, or such other earlier time or times as is reasonably requested by Company Company. In the event that the Accounting Firm is serving as accountant or Employeeauditor for the individual, entity or group effecting the Change in Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). If Tax Counsel makes All fees and expenses of the initial Determination that no Excise Tax is payable Accounting Firm shall be borne by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or PaymentsCompany. Employee shall have the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Any Gross-Up Payment, if any, as determined pursuant to such Determination this Section 11, shall be paid by Company to Employee Executive within five business days of Employee’s the receipt of such Determinationthe Accounting Firm's determination. The existence of a Dispute shall not in any way affect Employee’s right to receive Any determination by the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination Accounting Firm shall be binding, final and conclusive binding upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 belowExecutive. As a result of the uncertainty in the application of Sections Section 4999 and 280G of the CodeCode at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“"Underpayment”"), consistent with the calculations required to be made hereunder. In the event that Company exhausts its remedies pursuant to Section 11(b) and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, Executive thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employeeor for Executive's benefit.
17.3 (b) Executive shall notify Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against in writing of any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to claim by the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding whichInternal Revenue Service that, if pursued successfullysuccessful, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee would require the payment by Company under paragraph 17.3, of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later then such party shall promptly notify the other party hereto ten business days after Executive is informed in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim claim and shall apprise Company of the nature of such claim and the date on which such claim is asserted against Employee (“Employee Claim”), Employee shall take or cause requested to be taken paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:
(i) give Company any information reasonably requested by Company relating to such claim,
(ii) take such action in connection with contesting such Employee Claim claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably designated selected by Company,
(iii) cooperate with Company in good faith in order effectively to contest such claim, and
(it being understood and agreed by the parties hereto that the terms of iv) permit Company to participate in any proceeding relating to such retention shall expressly provide claim; provided, however, that Company shall be solely responsible for the 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, from any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expense. Without limitation on the foregoing provisions of this Section 11, Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all fees administrative appeals, proceedings, hearings and disbursements conferences with the taxing authority in respect of such counsel 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 expertspermissible manner, and 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 Company shall determine; provided, however, that if Company directs Executive to pay such claim and xxx for a refund, Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax 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 further provided that any extension of the statute of limitations relating to payment of taxes for Executive's taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Company' 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 contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(c) If, after Executive's receipt of an amount advanced by Company pursuant to Section 11(b), Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to Company' complying with the requirements of this Section 11(b)) promptly pay to Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after Executive's receipt of an amount advanced by Company pursuant to Section 11(b), a determination is made that Executive shall not be entitled to any refund with respect to such claim and Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the execution amount of powers such advance shall offset, to the extent thereof, the amount of attorney, provided that:Gross-Up Payment required to be paid.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 19.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments or distributions being individually referred to herein as a “"Payment,” " and any two or more of such payments or distributions being referred to herein as “"Payments”"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”") (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “"Excise Tax”"), then Employee shall be entitled to receive an additional payment or payments (individually referred to herein as a “"Gross-Up Payment” " and any two or more of such additional payments being referred to herein as “"Gross-Up Payments”") in an amount such that after payment by Employee of all taxes (as defined in paragraph 17.1119.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
17.2 19.2 Subject to the provisions of paragraph 17.3 19.3 through 17.1119.11, any determination (individually, a “"Determination”") required to be made under this paragraph 1719, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at Company’s 's expense, by nationally recognized tax counsel mutually acceptable to Company and Employee (“"Tax Counsel”"). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to Company and Employee within 15 business days of the termination of Employee’s 's employment, if applicable, or such other time or times as is reasonably requested by Company or Employee. If Tax Counsel makes the initial Determination that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments. Employee shall have the right to dispute any Determination (a “"Dispute”") within 15 business days after delivery of Tax Counsel’s 's opinion with respect to such Determination. The EMPLOYMENT AGREEMENT -- FRANX X. XXXX -44- 45 Gross-Up Payment, if any, as determined pursuant to such Determination shall be paid by Company to Employee within five business days of Employee’s 's receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s 's right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 19.3 through 17.11 19.11 below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“"Underpayment”"), and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s 's own initiative, Tax Counsel, at Company’s 's expense, thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s 's expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employee.
17.3 19.3 Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’', accountants’', and experts’ ' fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.1019.10) that any Payment is subject to the Excise Tax.
17.4 19.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by Employee against Company under this paragraph 17 19 (“"Claim”"), including, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.319.3, then such party shall promptly notify the other party hereto in writing of such Claim (“"Tax Claim Notice”").
17.5 19.5 If a Claim is asserted against Employee (“"Employee Claim”"), Employee shall take or cause to be taken such action in connection with contesting such Employee Claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are reasonably designated by Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that Company shall be solely responsible for the payment of any and all fees and EMPLOYMENT AGREEMENT -- FRANX X. XXXX -45- 46 disbursements of such counsel and any experts) and the execution of powers of attorney, provided that:
19.5.1 within 30 calendar days after Company receives or delivers, as the case may be, the Tax Claim Notice relating to such Employee Claim (or such earlier date that any payment of the taxes claimed is due from Employee, but in no event sooner than five calendar days after Company receives or delivers such Tax Claim Notice), Company shall have notified Employee in writing ("Election Notice") that Company does not dispute its obligations (including, but not limited to, its indemnity obligations) under this Agreement and that Company elects to contest, and to control the defense or prosecution of, such Employee Claim at Company's sole risk and sole cost and expense; and
19.5.2 Company shall have advanced to Employee on an interest-free basis, the total amount of the tax claimed in order for Employee, at Company's request, to pay or cause to be paid the tax claimed, file a claim for refund of such tax and, subject to the provisions of the last sentence of paragraph 19.7, sue xxx a refund of such tax if such claim for refund is disallowed by the appropriate taxing authority (it being understood and agreed by the parties hereto that Company shall only be entitled to sue xxx a refund and Company shall not be entitled to initiate any proceeding in, for example, United States Tax Court) and shall indemnify and hold Employee harmless, on a fully grossed-up after tax basis, from any tax imposed with respect to such advance or with respect to any imputed income with respect to such advance; and
19.5.3 Company shall reimburse Employee for any and all costs and expenses resulting from any such request by Company and shall indemnify and hold Employee harmless, on fully grossed-up after-tax basis, from any tax imposed as a result of such reimbursement.
19.6 Subject to the provisions of paragraph 19.5 hereof, Company shall have the right to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim by all appropriate proceedings, which proceedings shall be defended or prosecuted diligently by Company to a Final Determination; provided, however, that (i) Company shall not, without Employee's prior written consent, enter into any compromise or settlement of such
19.7 If, after actual receipt by Employee of an amount of a tax claimed (pursuant to an Employee Claim) that has been advanced by Company pursuant to paragraph 19.5.2 hereof, the extent of the liability of Company hereunder with respect to such tax claimed has been established by a Final Determination, Employee shall promptly pay or cause to be paid to Company any refund actually received by, or actually credited to, Employee with respect to such tax (together with any interest paid or credited thereon by the taxing authority and any recovery of legal fees from such taxing authority related thereto), except to the extent that any amounts are then due and payable by Company to Employee, whether under the provisions of this Agreement or otherwise. If, after the receipt by Employee of an amount advanced by Company pursuant to paragraph 19.5.2, a determination is made by the Internal Revenue Service or other appropriate taxing authority that Employee shall not be entitled to any refund with respect to such tax claimed and Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of any Gross-Up Payments and other payments required to be paid hereunder. EMPLOYMENT AGREEMENT -- FRANX X. XXXX -47- 48 19.8 With respect to any Employee Claim, if Company fails to deliver an Election Notice to Employee within the period provided in paragraph 19.5.1 hereof or, after delivery of such Election Notice, Company fails to comply with the provisions of paragraph 19.5.2, 19.5.3 or 19.6 hereof, then Employee shall at any time thereafter have the right (but not the obligation), at his election and in his sole and absolute discretion, to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim. Employee shall have full control of such defense or prosecution and such proceedings, including any settlement or compromise thereof. If requested by Employee, Company shall cooperate, and shall cause its affiliates to cooperate, in good faith with Employee and his authorized representatives in order to contest effectively such Employee Claim. Company may attend, but not participate in or control, any defense, prosecution, settlement or compromise of any Employee Claim controlled by Employee pursuant to this paragraph 19.8 and shall bear its own costs and expenses with respect thereto. In the case of any Employee Claim that is defended or prosecuted by Employee, Employee shall, from time to time, be entitled to current payment, on a fully grossed-up after tax basis, from Company with respect to costs and expenses incurred by Employee in connection with such defense or prosecution.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments or distributions being individually referred to herein as a “Payment,” and any two or more of such payments or distributions being referred to herein as “Payments”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “Excise Tax”), then Employee shall be entitled to receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment” and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in an amount such that after payment by Employee of all taxes (as defined in paragraph 17.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
17.2 Subject to the provisions of paragraph 17.3 through 17.11, any determination (individually, a “Determination”) required to be made under this paragraph 17, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at Company’s expense, by nationally recognized tax counsel mutually acceptable to Company and Employee (“Tax Counsel”). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to Company and Employee within 15 business days of the termination of Employee’s employment, if applicable, or such other time or times as is reasonably requested by Company or Employee. If Tax Counsel makes the initial Determination that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments. Employee shall have the right to dispute any Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination shall be paid by Company to Employee within five business days of Employee’s receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 through 17.11 below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“Underpayment”), and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s own initiative, Tax Counsel, at Company’s expense, thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employee.
17.3 Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.10) that any Payment is subject to the Excise Tax.
17.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by Employee against Company under this paragraph 17 (“Claim”), including, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.3, then such party shall promptly notify the other party hereto in writing of such Claim (“Tax Claim Notice”).
17.5 If a Claim is asserted against Employee (“Employee Claim”), Employee shall take or cause to be taken such action in connection with contesting such Employee Claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are reasonably designated by Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that Company shall be solely responsible for the payment of any and all fees and disbursements of such counsel and any experts) and the execution of powers of attorney, provided that:
17.5.1 within 30 calendar days after Company receives or delivers, as the case may be, the Tax Claim Notice relating to such Employee Claim (or such earlier date that any payment of the taxes claimed is due from Employee, but in no event sooner than five calendar days after Company receives or delivers such Tax Claim Notice), Company shall have notified Employee in writing (“Election Notice”) that Company does not dispute its obligations (including, but not limited to, its indemnity obligations) under this Agreement and that Company elects to contest, and to control the defense or prosecution of, such Employee Claim at Company’s sole risk and sole cost and expense; and
17.5.2 Company shall have advanced to Employee on an interest-free basis, the total amount of the tax claimed in order for Employee, at Company’s request, to pay or cause to be paid the tax claimed, file a claim for refund of such tax and, subject to the provisions of the last sentence of paragraph 17.7, xxx for a refund of such tax if such claim for refund is disallowed by the appropriate taxing authority (it being understood and agreed by the parties hereto that Company shall only be entitled to xxx for a refund and Company shall not be entitled to initiate any proceeding in, for example, United States Tax Court) and shall indemnify and hold Employee harmless, on a fully grossed-up after tax basis, from any tax imposed with respect to such advance or with respect to any imputed income with respect to such advance; and
17.5.3 Company shall reimburse Employee for any and all costs and expenses resulting from any such request by Company and shall indemnify and hold Employee harmless, on fully grossed-up after-tax basis, from any tax imposed as a result of such reimbursement.
17.6 Subject to the provisions of paragraph 17.5 hereof, Company shall have the right to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim by all appropriate proceedings, which proceedings shall be defended or prosecuted diligently by Company to a Final Determination; provided, however, that (i) Company shall not, without Employee’s prior written consent, enter into any compromise or settlement of such Employee Claim that would adversely affect Employee, (ii) any request from Company to Employee regarding any extension of the statute of limitations relating to assessment, payment, or collection of taxes for the taxable year of Employee with respect to which the contested issues involved in, and amount of, the Employee Claim relate is limited solely to such contested issues and amount, and (iii) Company’s control of any contest or proceeding shall be limited to issues with respect to the Employee Claim and Employee shall be entitled to settle or contest, in his sole and absolute discretion, any other issue raised by the Internal Revenue Service or any other taxing authority. So long as Company is diligently defending or prosecuting such Employee Claim, Employee shall provide or cause to be provided to Company any information reasonably requested by Company that relates to such Employee Claim, and shall otherwise cooperate with Company and its representatives in good faith in order to contest effectively such Employee Claim. Company shall keep Employee informed of all developments and events relating to any such Employee Claim (including, without limitation, providing to Employee copies of all written materials pertaining to any such Employee Claim), and Employee or his authorized representatives shall be entitled, at Employee’s expense, to participate in all conferences, meetings and proceedings relating to any such Employee Claim.
17.7 If, after actual receipt by Employee of an amount of a tax claimed (pursuant to an Employee Claim) that has been advanced by Company pursuant to paragraph 17.5.2 hereof, the extent of the liability of Company hereunder with respect to such tax claimed has been established by a Final Determination, Employee shall promptly pay or cause to be paid to Company any refund actually received by, or actually credited to, Employee with respect to such tax (together with any interest paid or credited thereon by the taxing authority and any recovery of legal fees from such taxing authority related thereto), except to the extent that any amounts are then due and payable by Company to Employee, whether under the provisions of this Agreement or otherwise. If, after the receipt by Employee of an amount advanced by Company pursuant to paragraph 17.5.2, a determination is made by the Internal Revenue Service or other appropriate taxing authority that Employee shall not be entitled to any refund with respect to such tax claimed and Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of any Gross-Up Payments and other payments required to be paid hereunder.
17.8 With respect to any Employee Claim, if Company fails to deliver an Election Notice to Employee within the period provided in paragraph 17.5.1 hereof or, after delivery of such Election Notice, Company fails to comply with the provisions of paragraph 17.5.2, 17.5.3 or 17.6 hereof, then Employee shall at any time thereafter have the right (but not the obligation), at his election and in his sole and absolute discretion, to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim. Employee shall have full control of such defense or prosecution and such proceedings, including any settlement or compromise thereof. If requested by Employee, Company shall cooperate, and shall cause its affiliates to cooperate, in good faith with Employee and his authorized representatives in order to contest effectively such Employee Claim. Company may attend, but not participate in or control, any defense, prosecution, settlement or compromise of any Employee Claim controlled by Employee pursuant to this paragraph 17.8 and shall bear its own costs and expenses with respect thereto. In the case of any Employee Claim that is defended or prosecuted by Employee, Employee shall, from time to time, be entitled to current payment, on a fully grossed-up after tax basis, from Company with respect to costs and expenses incurred by Employee in connection with such defense or prosecution.
17.9 In the case of any Employee Claim that is defended or prosecuted to a Final Determination pursuant to the terms of this paragraph 17.9, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim that have not theretofore been paid by Company to Employee, together with the costs and expenses, on a fully grossed-up after tax basis, incurred in connection therewith that have not theretofore been paid by Company to Employee, within ten calendar days after such Final Determination. In the case of any Employee Claim not covered by the preceding sentence, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim at least ten calendar days before the date payment of such taxes is due from Employee, except where payment of such taxes is sooner required under the provisions of this paragraph 17.9, in which case payment of such taxes (and payment, on a fully grossed-up after tax basis, of any costs and expenses required to be paid under this paragraph 17.9 shall be made within the time and in the manner otherwise provided in this paragraph 17.9.
17.10 For purposes of this Agreement, the term “Final Determination” shall mean (A) a decision, judgment, decree or other order by a court or other tribunal with appropriate jurisdiction, which has become final and non-appealable; (B) a final and binding settlement or compromise with an administrative agency with appropriate jurisdiction, including, but not limited to, a closing agreement under Section 7121 of the Code; (C) any disallowance of a claim for refund or credit in respect to an overpayment of tax unless a suit is filed on a timely basis; or (D) any final disposition by reason of the expiration of all applicable statutes of limitations.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 19.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments or distributions being individually referred to herein as a “"Payment,” " and any two or more of such payments or distributions being referred to herein as “"Payments”"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”") (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “"Excise Tax”"), then Employee shall be entitled to receive an additional payment or payments (individually referred to herein as a “"Gross-Up Payment” " and any two or more of such additional payments being referred to herein as “"Gross-Up Payments”") in an amount such that after payment by Employee of all taxes (as defined in paragraph 17.1119.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
17.2 19.2 Subject to the provisions of paragraph 17.3 19.3 through 17.1119.11, any determination (individually, a “"Determination”") required to be made under this paragraph 1719, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at Company’s 's expense, by nationally recognized tax counsel mutually acceptable to Company and Employee (“"Tax Counsel”"). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to Company and Employee within 15 business days of the termination of Employee’s 's employment, if applicable, or such other time or times as is reasonably requested by Company or Employee. If Tax Counsel makes the initial Determination that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments. Employee shall have the right to dispute any Determination (a “"Dispute”") within 15 business days after delivery of Tax Counsel’s 's opinion with respect to such Determination. The EMPLOYMENT AGREEMENT - FRANX X. XXXX -44- 45 Gross-Up Payment, if any, as determined pursuant to such Determination shall be paid by Company to Employee within five business days of Employee’s 's receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s 's right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 19.3 through 17.11 19.11 below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“"Underpayment”"), and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s 's own initiative, Tax Counsel, at Company’s 's expense, thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s 's expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employee.
17.3 19.3 Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’', accountants’', and experts’ ' fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.1019.10) that any Payment is subject to the Excise Tax.
17.4 19.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by Employee against Company under this paragraph 17 19 (“"Claim”"), including, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.319.3, then such party shall promptly notify the other party hereto in writing of such Claim (“"Tax Claim Notice”").
17.5 19.5 If a Claim is asserted against Employee (“"Employee Claim”"), Employee shall take or cause to be taken such action in connection with contesting such Employee Claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are reasonably designated by Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that Company shall be solely responsible for the payment of any and all fees and EMPLOYMENT AGREEMENT - FRANX X. XXXX -45- 46 disbursements of such counsel and any experts) and the execution of powers of attorney, provided that:
19.5.1 within 30 calendar days after Company receives or delivers, as the case may be, the Tax Claim Notice relating to such Employee Claim (or such earlier date that any payment of the taxes claimed is due from Employee, but in no event sooner than five calendar days after Company receives or delivers such Tax Claim Notice), Company shall have notified Employee in writing ("Election Notice") that Company does not dispute its obligations (including, but not limited to, its indemnity obligations) under this Agreement and that Company elects to contest, and to control the defense or prosecution of, such Employee Claim at Company's sole risk and sole cost and expense; and
19.5.2 Company shall have advanced to Employee on an interest-free basis, the total amount of the tax claimed in order for Employee, at Company's request, to pay or cause to be paid the tax claimed, file a claim for refund of such tax and, subject to the provisions of the last sentence of paragraph 19.7, sue xxx a refund of such tax if such claim for refund is disallowed by the appropriate taxing authority (it being understood and agreed by the parties hereto that Company shall only be entitled to sue xxx a refund and Company shall not be entitled to initiate any proceeding in, for example, United States Tax Court) and shall indemnify and hold Employee harmless, on a fully grossed-up after tax basis, from any tax imposed with respect to such advance or with respect to any imputed income with respect to such advance; and
19.5.3 Company shall reimburse Employee for any and all costs and expenses resulting from any such request by Company and shall indemnify and hold Employee harmless, on fully grossed-up after-tax basis, from any tax imposed as a result of such reimbursement.
19.6 Subject to the provisions of paragraph 19.5 hereof, Company shall have the right to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim by all appropriate proceedings, which proceedings shall be defended or prosecuted diligently by Company to a Final Determination; provided, however, that (i) Company shall not, without Employee's prior written consent, enter into any compromise or settlement of such
19.7 If, after actual receipt by Employee of an amount of a tax claimed (pursuant to an Employee Claim) that has been advanced by Company pursuant to paragraph 19.5.2 hereof, the extent of the liability of Company hereunder with respect to such tax claimed has been established by a Final Determination, Employee shall promptly pay or cause to be paid to Company any refund actually received by, or actually credited to, Employee with respect to such tax (together with any interest paid or credited thereon by the taxing authority and any recovery of legal fees from such taxing authority related thereto), except to the extent that any amounts are then due and payable by Company to Employee, whether under the provisions of this Agreement or otherwise. If, after the receipt by Employee of an amount advanced by Company pursuant to paragraph 19.5.2, a determination is made by the Internal Revenue Service or other appropriate taxing authority that Employee shall not be entitled to any refund with respect to such tax claimed and Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of any Gross-Up Payments and other payments required to be paid hereunder. EMPLOYMENT AGREEMENT - FRANX X. XXXX -47- 48 19.8 With respect to any Employee Claim, if Company fails to deliver an Election Notice to Employee within the period provided in paragraph 19.5.1 hereof or, after delivery of such Election Notice, Company fails to comply with the provisions of paragraph 19.5.2, 19.5.3 or 19.6 hereof, then Employee shall at any time thereafter have the right (but not the obligation), at his election and in his sole and absolute discretion, to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim. Employee shall have full control of such defense or prosecution and such proceedings, including any settlement or compromise thereof. If requested by Employee, Company shall cooperate, and shall cause its affiliates to cooperate, in good faith with Employee and his authorized representatives in order to contest effectively such Employee Claim. Company may attend, but not participate in or control, any defense, prosecution, settlement or compromise of any Employee Claim controlled by Employee pursuant to this paragraph 19.8 and shall bear its own costs and expenses with respect thereto. In the case of any Employee Claim that is defended or prosecuted by Employee, Employee shall, from time to time, be entitled to current payment, on a fully grossed-up after tax basis, from Company with respect to costs and expenses incurred by Employee in connection with such defense or prosecution.
Appears in 1 contract
Certain Additional Payments by Company. 17.1 19.1 Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Company or any of its affiliates to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (any such payments or distributions being individually referred to herein as a “"Payment,” " and any two or more of such payments or distributions being referred to herein as “"Payments”"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”") (such excise tax, together with any interest thereon, any penalties, additions to tax, or additional amounts with respect to such excise tax, and any interest in respect of such penalties, additions to tax or additional amounts, being collectively referred herein to as the “"Excise Tax”"), then Employee shall be entitled to receive an additional payment or payments (individually referred to herein as a “"Gross-Up Payment” " and any two or more of such additional payments being referred to herein as “"Gross-Up Payments”") in an amount such that after payment by Employee of all taxes (as defined in paragraph 17.1119.11) imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
17.2 19.2 Subject to the provisions of paragraph 17.3 19.3 through 17.1119.11, any determination (individually, a “"Determination”") required to be made under this paragraph 1719, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall initially be made, at Company’s 's expense, by nationally recognized tax counsel mutually acceptable to Company and Employee (“"Tax Counsel”"). Tax Counsel shall provide detailed supporting legal authorities, calculations, and documentation both to Company and EMPLOYMENT AGREEMENT--L. V. XxXXXXX Employee within 15 business days of the termination of Employee’s 's employment, if applicable, or such other time or times as is reasonably requested by Company or Employee. If Tax Counsel makes the initial Determination that no Excise Tax is payable by Employee with respect to a Payment or Payments, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Payment or Payments. Employee shall have the right to dispute any Determination (a “"Dispute”") within 15 business days after delivery of Tax Counsel’s 's opinion with respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such Determination shall be paid by Company to Employee within five business days of Employee’s 's receipt of such Determination. The existence of a Dispute shall not in any way affect Employee’s 's right to receive the Gross-Up Payment in accordance with such Determination. If there is no Dispute, such Determination shall be binding, final and conclusive upon Company and Employee, subject in all respects, however, to the provisions of paragraph 17.3 19.3 through 17.11 19.11 below. As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not have been made by Company should have been made (“"Underpayment”"), and if upon any reasonable written request from Employee or Company to Tax Counsel, or upon Tax Counsel’s 's own initiative, Tax Counsel, at Company’s 's expense, thereafter determines that Employee is required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel shall, at Company’s 's expense, determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Company to Employee.
17.3 19.3 Company shall defend, hold harmless, and indemnify Employee on a fully grossed-up after tax basis from and against any and all claims, losses, liabilities, obligations, damages, impositions, assessments, demands, judgements, settlements, costs and expenses (including reasonable attorneys’', accountants’', and experts’ ' fees and expenses) with respect to any tax liability of Employee resulting from any Final Determination (as defined in paragraph 17.1019.10) that any Payment is subject to the Excise Tax.
17.4 19.4 If a party hereto receives any written or oral communication with respect to any question, adjustment, assessment or pending or threatened audit, examination, investigation or administrative, court or other proceeding which, if pursued successfully, could result in or give rise to a claim by Employee against Company under this paragraph 17 19 (“"Claim”"), including, but not limited to, a claim for indemnification of Employee by Company under paragraph 17.319.3, then such party shall promptly notify the other party hereto in writing of such Claim (“"Tax Claim Notice”").. EMPLOYMENT AGREEMENT--L. V. XxXXXXX
17.5 19.5 If a Claim is asserted against Employee (“"Employee Claim”"), Employee shall take or cause to be taken such action in connection with contesting such Employee Claim as Company shall reasonably request in writing from time to time, including the retention of counsel and experts as are reasonably designated by Company (it being understood and agreed by the parties hereto that the terms of any such retention shall expressly provide that Company shall be solely responsible for the payment of any and all fees and disbursements of such counsel and any experts) and the execution of powers of attorney, provided that:
19.5.1 within 30 calendar days after Company receives or delivers, as the case may be, the Tax Claim Notice relating to such Employee Claim (or such earlier date that any payment of the taxes claimed is due from Employee, but in no event sooner than five calendar days after Company receives or delivers such Tax Claim Notice), Company shall have notified Employee in writing ("Election Notice") that Company does not dispute its obligations (including, but not limited to, its indemnity obligations) under this Agreement and that Company elects to contest, and to control the defense or prosecution of, such Employee Claim at Company's sole risk and sole cost and expense; and
19.5.2 Company shall have advanced to Employee on an interest-free basis, the total amount of the tax claimed in order for Employee, at Company's request, to pay or cause to be paid the tax claimed, file a claim for refund of such tax and, subject to the provisions of the last sentence of paragraph 19.7, sue xxx a refund of such tax if such claim for refund is disallowed by the appropriate taxing authority (it being understood and agreed by the parties hereto that Company shall only be entitled to sue xxx a refund and Company shall not be entitled to initiate any proceeding in, for example, United States Tax Court) and shall indemnify and hold Employee harmless, on a fully grossed-up after tax basis, from any tax imposed with respect to such advance or with respect to any imputed income with respect to such advance; and
19.5.3 Company shall reimburse Employee for any and all costs and expenses resulting from any such request by Company and shall indemnify and hold Employee harmless, on fully grossed-up after-tax basis, from any tax imposed as a result of such reimbursement.
19.6 Subject to the provisions of paragraph 19.5 hereof, Company shall have the right to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim by all appropriate proceedings, which proceedings shall be defended or prosecuted diligently by Company to a Final Determination; provided, however, that (i) Company shall not, without EMPLOYMENT AGREEMENT--L. V. XxXXXXX Employee's prior written consent, enter into any compromise or settlement of such Employee Claim that would adversely affect Employee, (ii) any request from Company to Employee regarding any extension of the statute of limitations relating to assessment, payment, or collection of taxes for the taxable year of Employee with respect to which the contested issues involved in, and amount of, the Employee Claim relate is limited solely to such contested issues and amount, and (iii) Company's control of any contest or proceeding shall be limited to issues with respect to the Employee Claim and Employee shall be entitled to settle or contest, in his sole and absolute discretion, any other issue raised by the Internal Revenue Service or any other taxing authority. So long as Company is diligently defending or prosecuting such Employee Claim, Employee shall provide or cause to be provided to Company any information reasonably requested by Company that relates to such Employee Claim, and shall otherwise cooperate with Company and its representatives in good faith in order to contest effectively such Employee Claim. Company shall keep Employee informed of all developments and events relating to any such Employee Claim (including, without limitation, providing to Employee copies of all written materials pertaining to any such Employee Claim), and Employee or his authorized representatives shall be entitled, at Employee's expense, to participate in all conferences, meetings and proceedings relating to any such Employee Claim.
19.7 If, after actual receipt by Employee of an amount of a tax claimed (pursuant to an Employee Claim) that has been advanced by Company pursuant to paragraph 19.5.2 hereof, the extent of the liability of Company hereunder with respect to such tax claimed has been established by a Final Determination, Employee shall promptly pay or cause to be paid to Company any refund actually received by, or actually credited to, Employee with respect to such tax (together with any interest paid or credited thereon by the taxing authority and any recovery of legal fees from such taxing authority related thereto), except to the extent that any amounts are then due and payable by Company to Employee, whether under the provisions of this Agreement or otherwise. If, after the receipt by Employee of an amount advanced by Company pursuant to paragraph 19.5.2, a determination is made by the Internal Revenue Service or other appropriate taxing authority that Employee shall not be entitled to any refund with respect to such tax claimed and Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of any Gross-Up Payments and other payments required to be paid hereunder.
19.8 With respect to any Employee Claim, if Company fails to deliver an Election Notice to Employee within the period provided in paragraph 19.5.1 hereof or, EMPLOYMENT AGREEMENT--L. V. XxXXXXX after delivery of such Election Notice, Company fails to comply with the provisions of paragraph 19.5.2, 19.5.3 or 19.6 hereof, then Employee shall at any time thereafter have the right (but not the obligation), at his election and in his sole and absolute discretion, to defend or prosecute, at the sole cost, expense and risk of Company, such Employee Claim. Employee shall have full control of such defense or prosecution and such proceedings, including any settlement or compromise thereof. If requested by Employee, Company shall cooperate, and shall cause its affiliates to cooperate, in good faith with Employee and his authorized representatives in order to contest effectively such Employee Claim. Company may attend, but not participate in or control, any defense, prosecution, settlement or compromise of any Employee Claim controlled by Employee pursuant to this paragraph 19.8 and shall bear its own costs and expenses with respect thereto. In the case of any Employee Claim that is defended or prosecuted by Employee, Employee shall, from time to time, be entitled to current payment, on a fully grossed-up after tax basis, from Company with respect to costs and expenses incurred by Employee in connection with such defense or prosecution.
19.9 In the case of any Employee Claim that is defended or prosecuted to a Final Determination pursuant to the terms of this paragraph 19.9, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim that have not theretofore been paid by Company to Employee, together with the costs and expenses, on a fully grossed-up after tax basis, incurred in connection therewith that have not theretofore been paid by Company to Employee, within ten calendar days after such Final Determination. In the case of any Employee Claim not covered by the preceding sentence, Company shall pay, on a fully grossed-up after tax basis, to Employee in immediately available funds the full amount of any taxes arising or resulting from or incurred in connection with such Employee Claim at least ten calendar days before the date payment of such taxes is due from Employee, except where payment of such taxes is sooner required under the provisions of this paragraph 19.9, in which case payment of such taxes (and payment, on a fully grossed-up after tax basis, of any costs and expenses required to be paid under this paragraph 19.9 shall be made within the time and in the manner otherwise provided in this paragraph 19.9.
19.10 For purposes of this Agreement, the term "Final Determination" shall mean (A) a decision, judgment, decree or other order by a court or other tribunal with appropriate jurisdiction, which has become final and non-appealable; (B) a final and binding settlement or compromise with an administrative agency with appropriate jurisdiction, including, but not limited to, a closing agreement under Section 7121 of the Code; (C) any disallowance of a claim for refund or credit in respect to an overpayment of tax unless a suit is filed EMPLOYMENT AGREEMENT--L. V. XxXXXXX on a timely basis; or (D) any final disposition by reason of the expiration of all applicable statutes of limitations.
Appears in 1 contract
