Common use of Code Section 4999 Clause in Contracts

Code Section 4999. (i) If any Payments (as defined in Paragraph 5(h)(ii) to be made to or for the benefit of the Executive under this Agreement or under any plan or arrangement maintained by the Company or its affiliated companies are subject to the excise tax (the “Excise Tax”) under section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then such Payments shall be reduced by the smallest amount necessary in order for no portion of the Executive’s total Payments to be subject to the Excise Tax. (ii) No reduction in any of the Executive’s Payments shall be made pursuant to Paragraph 5(g)(i) above if the After Tax Amount of the Payments payable to Executive without such reduction would exceed the After Tax Amount of the reduced Payments payable to Executive in accordance with Paragraph 5(g)(i) above. For purposes of the foregoing, (i) the “After Tax Amount” of the Executive’s Payments, as computed with, and as computed without, the reduction provided for under Paragraph 5(g)(i), shall mean the amount of the Payments, as so computed, that the Executive would retain after payment of all taxes (including without limitation any federal, state or local income taxes, the Excise Tax or any other excise taxes, any employment, social security or medicare taxes, and any other taxes) imposed with respect to such Payments in the year or years in which payable; and (ii) the amount of such taxes shall be computed at the rates in effect under the applicable tax laws in the year in which the 280G Change in Control occurs, or if then ascertainable, the rates in effect in any later year in which any Payment is expected to be paid following the 280G Change in Control (and if not so ascertainable, using then current rates), and in the case of any income taxes, by using the maximum combined federal, state and (if applicable) local income tax rates then in effect under such laws. (iii) Any reduction in the Executive’s Payments required to be made pursuant to Paragraph 5(g)(i) above (the “Required Reduction”) shall be made as follows: first, any outstanding performance-based cash or equity incentive awards the performance periods for which had not ended, and the performance goals for which had not been attained, prior to the occurrence of the Change in Control, to the extent such awards are treated as Payments, shall be reduced, by cancellation of the acceleration of the vesting and time of payment of such awards; second, any severance payments or benefits, or any other Payments the full amounts of which are treated as contingent on the Change in Control pursuant to paragraph (a) of Treas. Reg. §1.280G-l, Q/A 24 shall be reduced; and third, any cash or equity awards, or nonqualified deferred compensation amounts, that vest solely based on the Executive’s continued service with the Company, and that pursuant to paragraph (c) of Treas. Reg. § 1.280G-l, Q/A 24 are treated as contingent on the Change in Control because they become vested as a result of the Change in Control, shall be reduced, by canceling the acceleration of their vesting. In each case, the amounts described in clauses first, second and third of the preceding sentence, (x) shall be reduced only to the extent of the portion thereof, if any, that is treated as contingent on the Change in Control under the regulations issued under Code section 280G, (y) shall be reduced in the inverse order of their originally scheduled dates of payments or vesting, as applicable, and (z) shall be so reduced only to the extent necessary to achieve the Required Reduction. Notwithstanding anything to the contrary, any such reduction shall be made in accordance with Section 409A of the Code (as defined below). (iv) A determination as to whether any reduction in the Executive’s Payments is required pursuant to this Paragraph 5(g), and if so, as to which Payments are to be reduced and the amount of the reduction to be made to any such Payments, shall be made by no later than thirty (30) days prior to the closing of the transaction or the occurrence of the event that constitutes the Change in Control, or as soon thereafter as administratively practicable. Such determinations, and the assumptions to be utilized in arriving at such determinations, shall be made by the Company in consultation with the Auditor (as hereinafter defined) (at the expense of the Company). The Auditor shall be a nationally recognized public accounting firm, law firm or consulting firm.

Code Section 4999. (i) If any Payments (as defined in Paragraph 5(h)(ii) to be made to or for the benefit of the Executive under this Agreement or under any plan or arrangement maintained by the Company or its affiliated companies are subject to the excise tax (the “Excise Tax”) under section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then such Payments shall be reduced by the smallest amount necessary in order for no portion of the Executive’s total Payments to be subject to the Excise Tax. (ii) No reduction in any of the Executive’s Payments shall be made pursuant to Paragraph 5(g)(i) above if the After Tax Amount of the Payments payable to Executive without such reduction would exceed the After Tax Amount of the reduced Payments payable to Executive in accordance with Paragraph 5(g)(i) above. For purposes of the foregoing, (i) the “After Tax Amount” of the Executive’s Payments, as computed with, and as computed without, the reduction provided for under Paragraph 5(g)(i), shall mean the amount of the Payments, as so computed, that the Executive would retain after payment of all taxes (including without limitation any federal, state or local income taxes, the Excise Tax or any other excise taxes, any employment, social security or medicare taxes, and any other taxes) imposed with respect to such Payments in the year or years in which payable; and (ii) the amount of such taxes shall be computed at the rates in effect under the applicable tax laws in the year in which the 280G Change in Control occurs, or if then ascertainable, the rates in effect in any later year in which any Payment is expected to be paid following the 280G Change in Control (and if not so ascertainable, using then current rates), and in the case of any income taxes, by using the maximum combined federal, state and (if applicable) local income tax rates then in effect under such laws. (iii) Any reduction in the Executive’s Payments required to be made pursuant to Paragraph 5(g)(i) above (the “Required Reduction”) shall be made as follows: first, any outstanding performance-based cash or equity incentive awards the performance periods for which had not ended, and the performance goals for which had not been attained, prior to the occurrence of the Change in Control, to the extent such awards are treated as Payments, shall be reduced, by cancellation of the acceleration of the vesting and time of payment of such awards; second, any severance payments or benefits, or any other Payments the full amounts of which are treated as contingent on the Change in Control pursuant to paragraph (a) of Treas. Reg. §1.280G-l, Q/A 24 shall be reduced; and third, any cash or equity awards, or nonqualified deferred compensation amounts, that vest solely based on the Executive’s continued service with the Company, and that pursuant to paragraph (c) of Treas. Reg. § 1.280G-l, Q/A 24 are treated as contingent on the Change in Control because they become vested as a result of the Change in Control, shall be reduced, by canceling the acceleration of their vesting. In each case, the amounts described in clauses first, second and third of the preceding sentence, (x) shall be reduced only to the extent of the portion thereof, if any, that is treated as contingent on the Change in Control under the regulations issued under Code section 280G, (y) shall be reduced in the inverse order of their originally scheduled dates of payments or vesting, as applicable, and (z) shall be so reduced only to the extent necessary to achieve the Required Reduction. Notwithstanding anything to the contrary, any such reduction shall be made in accordance with Section 409A of the Code (as defined below). (iv) A determination as to whether any reduction in the Executive’s Payments is required pursuant to this Paragraph 5(g), and if so, as to which Payments are to be reduced and the amount of the reduction to be made to any such Payments, shall be made by no later than thirty (30) days prior to the closing of the transaction or the occurrence of the event that constitutes the Change in Control, or as soon thereafter as administratively practicable. Such determinations, and the assumptions to be utilized in arriving at such determinations, shall be made by the Company in consultation with the Auditor (as hereinafter defined) (at the expense of the Company). The Auditor shall be a nationally recognized public accounting firm, law firm or consulting firm.the

Code Section 4999. (ia) If Notwithstanding any Payments (other provision in this Agreement to the contrary, and except as defined set forth below, in Paragraph 5(h)(ii) to be made the event the Company determines that any payment or distribution by the Company, or by any affiliate of the Company, to or for the benefit of the Executive under (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or under any plan or arrangement maintained by otherwise) would constitute parachute payments within the Company or its affiliated companies are meaning of Section 280G of the Code (a “Payment”) and would be subject to the excise tax imposed by Code Section 4999 or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (the “Excise Tax”) under section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then such the Payments shall be reduced by (but not below zero) to the smallest amount minimum extent necessary in order for to ensure that no portion of the Executive’s total Payments to be Payment is subject to the Excise TaxTax (the “Cutback”); provided that, if Executive, solely in his discretion, determines that the economic value derived by him after payment of the tax contemplated in Code Section 4999 results in a better economic outcome to him than would be achieved by implementing the Cutback (taking into account the tax paid under Section 4999), than the Cutback shall not occur and the Executive shall be paid all amounts owed to him under this Agreement or any other agreement between him and the Company). (iib) No reduction in any of If the Executive’s Payments shall be made pursuant to Paragraph 5(g)(i) above if the After Tax Amount of the Payments payable to Executive without such reduction would exceed the After Tax Amount of the reduced Payments payable to Executive in accordance with Paragraph 5(g)(i) above. For purposes of the foregoing, (i) the “After Tax Amount” of the Executive’s Payments, as computed with, and as computed withoutCutback provision is implemented, the reduction provided for under Paragraph 5(g)(i), shall mean the amount of the Payments, as so computed, that the Executive would retain after payment of all taxes (including without limitation any federal, state or local income taxes, the Excise Tax or any other excise taxes, any employment, social security or medicare taxes, and any other taxes) imposed with respect to such Payments in the year or years in which payable; and (ii) the amount of such taxes shall be computed at the rates in effect under the applicable tax laws in the year in which the 280G Change in Control occurs, or if then ascertainable, the rates in effect in any later year in which any Payment is expected to be paid following the 280G Change in Control (and if not so ascertainable, using then current rates), and in the case of any income taxes, by using the maximum combined federal, state and (if applicable) local income tax rates then in effect under such laws. (iii) Any reduction in the Executive’s Payments required to be made pursuant to Paragraph 5(g)(i) above (the “Required Reduction”) shall be made as follows: first, any outstanding performance-based cash or equity incentive awards the performance periods for which had not ended, and the performance goals for which had not been attained, prior to the occurrence of the Change in Control, to the extent such awards are treated as Payments, shall be reduced, by cancellation of the acceleration of the vesting and time of payment of such awards; second, any severance payments or benefits, or any other Payments the full amounts of which are treated as contingent on the Change in Control pursuant to paragraph (a) of Treas. Reg. §1.280G-l, Q/A 24 shall be reduced; and third, any cash or equity awards, or nonqualified deferred compensation amounts, that vest solely based on the Executive’s continued service with the Company, and that pursuant to paragraph (c) of Treas. Reg. § 1.280G-l, Q/A 24 are treated as contingent on the Change in Control because they become vested as a result of the Change in Control, shall be reduced, by canceling the acceleration of their vesting. In each case, the amounts described in clauses first, second and third of the preceding sentence, (x) shall be reduced only to the extent of the portion thereof, if any, that is treated as contingent on the Change in Control under the regulations issued under Code section 280G, (y) shall be reduced in a manner that maximizes the inverse order of their originally scheduled dates of payments or vesting, as applicable, and (z) shall be so reduced only to the extent necessary to achieve the Required ReductionExecutive’s economic position. Notwithstanding anything to the contrary, any such The reduction shall be made in accordance a manner consistent with the requirements of Code Section 409A of the Code (as defined below)409A, and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis, but not below zero. (ivc) A Notwithstanding the initial application of this Section 11, if the Internal Revenue Service determines that any Payment constitutes an excess parachute payment, this Section 11 will be reapplied based on the Internal Revenue Service determination as and the Executive will be required to whether any reduction in promptly repay the portion of the Payment required to avoid the Excise Tax, together with interest at the applicable federal rate from the date of the Executive’s Payments is required pursuant to this Paragraph 5(g), and if so, as to which Payments are to be reduced and the amount receipt of the reduction excess payment until the date of repayment. (d) Subject to the proviso set forth in subsection (a) of this Section 11, all determinations required to be made to under this Section 11, including whether any such Payments, shall be made by no later than thirty (30) days prior to the closing of the transaction Payments or the occurrence of the event that constitutes the Change in Control, or as soon thereafter as administratively practicable. Such determinations, and the assumptions to be utilized in arriving at such determinationsbenefits are parachute payments, shall be made by the Company in consultation with the Auditor (as hereinafter defined) (at the expense of the Company)its sole discretion. The Auditor Executive shall provide the Company with such information and documents as the Company may reasonably request in order to make a determination under this Section 11. The Company’s determinations shall be a nationally recognized public accounting firm, law firm or consulting firmfinal and binding on the Company and the Executive.