Common use of Effect of Code §280G Clause in Contracts

Effect of Code §280G. [1] If the sum of the payments and benefits described in Section 2.01 (collectively, the “Payments”) constitute “excess parachute payments” as defined in Code §280G, the Company will either: [a] Pay the Employee an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Employee, after deduction of any excise tax under Code §4999 (the “Excise Tax”) and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Payments to the Employee; provided, however, that this Section 2.02[1][a] shall apply only if the sum of the Payments that constitute amounts described in Code §280G(b)(2)(A)(i) is equal to or greater than one-hundred and ten (110) percent of the limitation described in Code §280G(b)(2)(A)(ii) (the "280G Limit"); or [b] Reduce the Payments to the minimum extent necessary to avoid the imposition of the Excise Tax or loss of deduction under Code §280G; provided, however, that this Section 2.02[1][b] shall apply only if the sum of the Payments that constitute amounts described in Code §280G(b)(2)(A)(i) is less than one-hundred and ten (110) percent of the 280G Limit. Any reduction under this Section 2.02[1][b] shall be made in compliance with Code §409A. [2] Subject to the provisions of Section 2.02[3], all determinations under this Section 2.02, including whether a Gross-Up Payment is required and the amount of the Gross-Up Payment, shall be made by a certified public accounting firm which was, immediately before the Change in Control, the Company’s certified public accounting firm, or such other nationally recognized certified public accounting firm as may be designated by the Employee (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting calculations to both the Company and the Employee within ten (10) business days after receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is 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, the Employee may appoint another nationally recognized accounting firm to make the determination 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 determination by the Accounting Firm shall be final and binding on the Company and the Employee. Notwithstanding the foregoing, as a result of uncertainty in applying Code §4999, it is possible that the Company will not have made the aggregate Gross-Up Payment that it should have made hereunder (an “Underpayment”). If the Company exhausts its remedies pursuant to Section 2.02[3] and the Employee thereafter is required to pay any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment, inform the Company and the Employee of the Underpayment in writing, and, within five (5) days of receiving such written notice, the Company shall pay the amount of such Underpayment to the Employee. [3] The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but not later than five (5) business days after the Employee is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is required to be paid. The Employee shall not pay such claim before the expiration of thirty (30) days following the date on which he 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 the Employee in writing before the expiration of such thirty (30) day period (or such shorter period ending on the date that any payment of taxes with respect to such claim is due) that it desires to contest such claim, the Employee shall [a] give the Company any information reasonably requested by the Company relating to such claim, [b] take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, [c] cooperate with the Company in good faith in order effectively to contest such claim, and [d] permit the Company to participate in any proceedings relating to such claim; provided that the Company shall pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any tax, including interest and penalties, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 2.02[3], the Company shall control all proceedings in connection with such contest and may, at its sole option, either direct the Employee to pay the tax claimed and xxx for a refund or to contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any appropriate administrative tribunal or court, as the Company shall determine; provided, that if the Company directs the Employee to pay such claim and xxx for a refund, the Company shall advance the amount of such payment to the Employee, on an interest-free basis, and shall indemnify and hold the Employee harmless, on an after-tax basis, from any tax, including interest or penalties, imposed with respect to such advance. The Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and the Employee shall be entitled to settle or contest any other issue. [4] If, after the Employee receives an advance by the Company pursuant to Section 2.02[3], the Employee becomes entitled to receive a refund claimed pursuant to such Section 2.02[3], the Employee shall (subject to the Company’s compliance with the requirements of such Section 2.02[3]) promptly pay to the Company the amount of such refund (together with any interest thereon, after taxes applicable thereto). If, after the Employee receives an advance by the Company pursuant to Section 2.02[3], a determination is made that the Employee shall not be entitled to any refund claimed pursuant to such Section 2.02[3], and the Company does not notify the Employee in writing of its intent to contest such denial of refund before the expiration of thirty (30) days after such determination, the Employee shall not be required to repay such advance, and the amount of such advance shall offset, to the extent thereof, the amount of the required Gross-Up Payment. [5] Notwithstanding anything in this Section 2.02 to the contrary, any Gross-Up Payment or other tax gross-up payment under this Section 2.02 shall be made by the end of the Employee's taxable year next following the Employee's taxable year in which the Employee remits the related taxes.

Effect of Code §280G. [1] If the sum of the payments and benefits amounts described in Section 2.01 (collectively5.01 and those promised under any other plan, program or agreement between the “Payments”) Executive and any Group Member constitute “excess parachute payments” as defined in Code §280G280G(b)(1), the Company Corporation (or the Employer) will either: : [a1] Pay Reimburse the Employee an additional Executive for the amount (the “Gross-Up Payment”) such that the net amount retained by the Employee, after deduction of any excise tax due under Code §4999 (4999, if this procedure provides the Executive with an after-tax amount that is larger than the after-tax amount produced under Section 5.02[2]; or [2] Reduce the Executive’s payments under this Agreement so that the Executive’s total “Excise Tax”) and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Payments to the Employee; provided, however, that this Section 2.02[1][a] shall apply only if the sum of the Payments that constitute amounts described parachute payment” as defined in Code §280G(b)(2)(A)(i280G(b)(2)(A) under this and any all other agreements will be $1.00 less than the amount that would be an “excess parachute payment” if this procedure provides the Executive with an after-tax amount that is equal larger than the after-tax amount produced under Section 5.02[1]. [3] If Section 5.02[2] is to be applied, the Executive may designate the payments or greater than one-hundred type of payments that will be reduced (and ten (110the order in which that reduction will be applied) percent to ensure that the total amounts paid will not be an “excess parachute payment.” This information must be returned, in writing, within 30 days of the limitation described in Code §280G(b)(2)(A)(ii) (date of the "280G Limit"); Notice of Payment. If the Corporation does not receive written instructions within that 30-day period, all payments will be reduced prorata. All payments under this Agreement that are subject to Section 5.02[2] will be deferred for [a] 30 days after the Executive notifies the Corporation of the payments or types of payments to be reduced or [b] Reduce 30 days after the Payments to the minimum extent necessary to avoid the imposition expiration of the Excise Tax or loss of deduction under Code §280G; provided, however, that this Section 2.02[1][b] shall apply only if period during which the sum Executive may notify the Corporation of the Payments that constitute amounts described in Code §280G(b)(2)(A)(i) is less than one-hundred and ten (110) percent payments or types of the 280G Limit. Any reduction under this Section 2.02[1][b] shall payments to be made in compliance with Code §409A. [2] Subject to the provisions of Section 2.02[3], all determinations under this Section 2.02, including whether a Gross-Up Payment is required and the amount of the Gross-Up Payment, shall be made by a certified public accounting firm which was, immediately before the Change in Control, the Company’s certified public accounting firm, or such other nationally recognized certified public accounting firm as may be designated by the Employee (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting calculations to both the Company and the Employee within ten (10) business days after receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is 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, the Employee may appoint another nationally recognized accounting firm to make the determination 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 determination by the Accounting Firm shall be final and binding on the Company and the Employee. Notwithstanding the foregoing, as a result of uncertainty in applying Code §4999, it is possible that the Company will not have made the aggregate Gross-Up Payment that it should have made hereunder (an “Underpayment”). If the Company exhausts its remedies pursuant to Section 2.02[3] and the Employee thereafter is required to pay any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment, inform the Company and the Employee of the Underpayment in writing, and, within five (5) days of receiving such written notice, the Company shall pay the amount of such Underpayment to the Employeereduced. [34] The Employee shall notify the Company in writing of any claim by If the Internal Revenue Service thator any court of competent jurisdiction subsequently and conclusively decides that the Corporation has miscalculated the amount of any “excess parachute payment” and if that decision, if successfulhad it been made initially: [a] Would have resulted in a larger payment than initially calculated, would require the Corporation will reapply Section 5.02 based on the revised calculation to identify the Executive’s revised parachute payment by and immediately pay that additional amount to the Company Executive; but [b] If, after that reapplication, the Executive is entitled to a smaller amount under this Agreement than initially calculated, the Executive will repay the amount of any overpayment to the Corporation within 30 days of the Gross-Up Payment. Such notification shall be given date of that decision, together with interest on that amount at the prime rate of interest quoted in the Wall Street Journal, as soon as practicable but not later than five (5) business days after the Employee is informed in writing of such claim and shall apprise the Company of the nature date of such claim and that final decision, calculated over the period beginning on the date on which such claim is required to be paid. The Employee shall not pay such claim before the expiration of thirty (30) days following the date on which he gives such notice to the Company (or such shorter period excess amount was paid and ending on the date that any payment of taxes with respect to such claim the excess amount is due). If the Company notifies the Employee in writing before the expiration of such thirty (30) day period (or such shorter period ending on the date that any payment of taxes with respect to such claim is due) that it desires to contest such claim, the Employee shall [a] give the Company any information reasonably requested by the Company relating to such claim, [b] take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, [c] cooperate with the Company in good faith in order effectively to contest such claim, and [d] permit the Company to participate in any proceedings relating to such claim; provided that the Company shall pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any tax, including interest and penalties, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 2.02[3], the Company shall control all proceedings in connection with such contest and may, at its sole option, either direct the Employee to pay the tax claimed and xxx for a refund or to contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any appropriate administrative tribunal or court, as the Company shall determine; provided, that if the Company directs the Employee to pay such claim and xxx for a refund, the Company shall advance the amount of such payment to the Employee, on an interest-free basis, and shall indemnify and hold the Employee harmless, on an after-tax basis, from any tax, including interest or penalties, imposed with respect to such advance. The Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and the Employee shall be entitled to settle or contest any other issue. [4] If, after the Employee receives an advance by the Company pursuant to Section 2.02[3], the Employee becomes entitled to receive a refund claimed pursuant to such Section 2.02[3], the Employee shall (subject to the Company’s compliance with the requirements of such Section 2.02[3]) promptly pay to the Company the amount of such refund (together with any interest thereon, after taxes applicable thereto). If, after the Employee receives an advance by the Company pursuant to Section 2.02[3], a determination is made that the Employee shall not be entitled to any refund claimed pursuant to such Section 2.02[3], and the Company does not notify the Employee in writing of its intent to contest such denial of refund before the expiration of thirty (30) days after such determination, the Employee shall not be required to repay such advance, and the amount of such advance shall offset, to the extent thereof, the amount of the required Gross-Up Payment. [5] Notwithstanding anything in this Section 2.02 to the contrary, any Gross-Up Payment or other tax gross-up payment under this Section 2.02 shall be made by the end of the Employee's taxable year next following the Employee's taxable year in which the Employee remits the related taxesrepaid.

Effect of Code §280G. [1] If the sum of the payments and benefits described in Section 2.01 (collectively, the “Payments”) constitute “"excess parachute payments” " as defined in Code §280G280G(b)(1), the Company will either: : [a1] Pay Reimburse the Employee an additional for the amount (the “Gross-Up Payment”) such that the net amount retained by the Employee, after deduction of any excise tax due under Code §4999 (4999, if this procedure provides the “Excise Tax”) and any federal, state and local income and employment taxes and Excise Tax upon Employee with an after-tax amount that is larger than the Grossafter-Up Payment, shall be equal to the Payments to tax amount produced under Section 2.02[2]; or [2] Reduce the Employee; provided, however, ’s benefits under this Agreement so that this Section 2.02[1][a] shall apply only if the sum of the Payments that constitute amounts described Employee’s total "parachute payment" as defined in Code §280G(b)(2)(A)(i280G(b)(2)(A) under this and all other agreements will be $1.00 less than the amount that would be an "excess parachute payment" if this procedure provides the Employee with an after-tax amount that is equal to or greater larger than onethe after-hundred and ten (110) percent tax amount produced under Section 2.02[1]. If Section 2.02[2] applies, within 10 days of the limitation described Date of Termination (or, in Code §280G(b)(2)(A)(iithe case in which employment is Terminated within six (6) (the "280G Limit"); or [b] Reduce the Payments months prior to the minimum extent necessary to avoid the imposition of the Excise Tax or loss of deduction under Code §280G; provided, however, that this Section 2.02[1][b] shall apply only if the sum of the Payments that constitute amounts described in Code §280G(b)(2)(A)(i) is less than one-hundred and ten (110) percent of the 280G Limit. Any reduction under this Section 2.02[1][b] shall be made in compliance with Code §409A. [2] Subject to the provisions of Section 2.02[3], all determinations under this Section 2.02, including whether a Gross-Up Payment is required and the amount of the Gross-Up Payment, shall be made by a certified public accounting firm which was, immediately before the Change in Control, the Company’s certified public accounting firm, or such other nationally recognized certified public accounting firm as may be designated by the Employee (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting calculations to both the Company and the Employee within ten (10) business days after receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is 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), the Company will apprise the Employee of the amount of the reduction ("Notice of Reduction"). Within 10 days of receiving that information, the Employee may appoint another nationally recognized accounting firm specify how (and against which benefit or payment source) the reduction is to make the determination required hereunder be applied (which accounting firm shall then be referred to as the Accounting Firm hereunder"Notice of Allocation"). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting Firm shall be final and binding on the Company and the Employee. Notwithstanding the foregoing, as a result of uncertainty in applying Code §4999, it is possible that the The Company will not have made the aggregate Gross-Up Payment that it should have made hereunder (an “Underpayment”). If the Company exhausts its remedies pursuant to Section 2.02[3] and the Employee thereafter is be required to pay any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment, inform the Company and the Employee of the Underpayment in writing, and, implement these directions within five (5) 10 days of receiving such written noticethe Notice of Allocation. If, the Company shall pay has not received a Notice of Allocation from the amount of such Underpayment to the Employee. [3] The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company within 10 days of the Gross-Up Payment. Such notification shall be given as soon as practicable but not later than five (5) business days after the Employee is informed in writing of such claim and shall apprise the Company date of the nature Notice of such claim and Reduction or if the date on which such claim allocation provided in the Notice of Allocation is required not sufficient to be paid. The Employee shall not pay such claim before the expiration of thirty (30) days following the date on which he 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 the Employee in writing before the expiration of such thirty (30) day period (or such shorter period ending on the date that any payment of taxes with respect to such claim is due) that it desires to contest such claim, the Employee shall [a] give the Company any information reasonably requested by the Company relating to such claim, [b] take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company, [c] cooperate with the Company in good faith in order effectively to contest such claim, and [d] permit the Company to participate in any proceedings relating to such claim; provided that the Company shall pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any tax, including interest and penalties, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this fully implement Section 2.02[32.02[2], the Company shall control all proceedings in connection with such contest and maywill apply Section 2.02[2] proportionately based on the amounts otherwise payable under Section 2.01 or, at its sole option, either direct the Employee to pay the tax claimed and xxx for if a refund or to contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any appropriate administrative tribunal or court, as the Company shall determine; provided, Notice of Allocation has been returned that if the Company directs the Employee to pay such claim and xxx for a refund, the Company shall advance the amount of such payment to the Employeedoes not sufficiently implement Section 2.02[2], on an interest-free basis, and shall indemnify and hold the Employee harmless, on an after-tax basis, from any tax, including interest or penalties, imposed with respect to such advance. The Company’s control basis of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and reductions specified in the Employee shall be entitled to settle or contest any other issue. [4] If, after the Employee receives an advance by the Company pursuant to Section 2.02[3], the Employee becomes entitled to receive a refund claimed pursuant to such Section 2.02[3], the Employee shall (subject to the Company’s compliance with the requirements Notice of such Section 2.02[3]) promptly pay to the Company the amount of such refund (together with any interest thereon, after taxes applicable thereto). If, after the Employee receives an advance by the Company pursuant to Section 2.02[3], a determination is made that the Employee shall not be entitled to any refund claimed pursuant to such Section 2.02[3], and the Company does not notify the Employee in writing of its intent to contest such denial of refund before the expiration of thirty (30) days after such determination, the Employee shall not be required to repay such advance, and the amount of such advance shall offset, to the extent thereof, the amount of the required Gross-Up Payment. [5] Notwithstanding anything in this Section 2.02 to the contrary, any Gross-Up Payment or other tax gross-up payment under this Section 2.02 shall be made by the end of the Employee's taxable year next following the Employee's taxable year in which the Employee remits the related taxesAllocation.