Common use of Excise Tax Indemnification Clause in Contracts

Excise Tax Indemnification. (a) If Mx. Xxxxxx’x employment terminates under circumstances entitling him (or in the event of his death, his estate) to the Additional Termination Entitlements, the Company shall pay to Mx. Xxxxxx (or in the event of his death, his estate) an additional amount intended to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula: X = E x P 1-[(FI x (1-SLI)) + SLI + E + M] where E = the percentage rate at which an excise tax is assessed under section 4999 of the Code; P = the amount with respect to which such excise tax is assessed, determined without regard to this section 16; FI = the highest marginal rate of income tax applicable to Mx. Xxxxxx under the Code for the taxable year in question; SLI = the sum of the highest marginal rates of income tax applicable to Mx. Xxxxxx under all applicable state and local laws for the taxable year in question; and M = the highest marginal rate of Medicare tax applicable to Mx. Xxxxxx under the Code for the taxable year in question. Such computation shall be made at the expense of the Company by a member of the firm of Txxxxxx Xxxxxxxx & Wxxx, or by an attorney or a firm of independent certified public accountants selected by Mx. Xxxxxx and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: (i) that a change in ownership, a change in effective ownership or control, or a change in ownership of a substantial portion of assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made to or benefits conferred upon Mx. Xxxxxx on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to Mx. Xxxxxx’x termination of employment.

Excise Tax Indemnification. (a) If Mx. Xxxxxx’x Xxxxx’x employment terminates under circumstances entitling him (or in the event of his death, his estate) to the Additional Termination Entitlements, the Company shall pay to Mx. Xxxxxx Xxxxx (or in the event of his death, his estate) an additional amount intended to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula: X = E x P 1-[(FI x (1-SLI)) + SLI + E + M] where E = the percentage rate at which an excise tax is assessed under section 4999 of the Code; P = the amount with respect to which such excise tax is assessed, determined without regard to this section 16; FI = the highest marginal rate of income tax applicable to Mx. Xxxxxx Xxxxx under the Code for the taxable year in question; SLI = the sum of the highest marginal rates of income tax applicable to Mx. Xxxxxx Xxxxx under all applicable state and local laws for the taxable year in question; and M = the highest marginal rate of Medicare tax applicable to Mx. Xxxxxx Xxxxx under the Code for the taxable year in question. Such computation shall be made at the expense of the Company by a member of the firm of Txxxxxx Xxxxxxxx & Wxxx, or by an attorney or a firm of independent certified public accountants selected by Mx. Xxxxxx Xxxxx and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: (i) that a change in ownership, a change in effective ownership or control, or a change in ownership of a substantial portion of assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made to or benefits conferred upon Mx. Xxxxxx Xxxxx on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to Mx. Xxxxxx’x Xxxxx’x termination of employment.

Excise Tax Indemnification. If the excise tax on “excess parachute payments,” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (a) If Mx. Xxxxxx’x employment terminates the “Code”), will be imposed on the Executive under circumstances entitling him Code Section 4999 as a result of the Executive’s receipt of any payment under this Agreement or any other payment, benefit, or compensation (or in the event of his death, his estate) without regard to the “Additional Termination EntitlementsAmount” described below) which the Executive receives or has the right to receive from the Company or any of its affiliates (the “Change of Control Benefits”), the Company shall indemnify the Executive and hold him harmless against all claims, losses, damages, penalties, expenses, and excise taxes related to the excise tax under Code section 4999. To effect this indemnification, the Company shall pay to Mxthe Executive the “Additional Amount” described in this Section 14. Xxxxxx (or in The Additional Amount shall be the event of his death, his estate) an additional amount intended that is sufficient to indemnify him against and hold the financial effects Executive harmless from the application of Code section 280G and 4999, including the amount of (i) the excise tax that will be imposed on excess parachute payments the Executive under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula: X = E x P 1-[(FI x (1-SLI)) + SLI + E + M] where E = the percentage rate at which an excise tax is assessed under section 4999 of the Code; P = the amount with respect to which such the Change of Control Benefits; (ii) the additional (A) excise tax under Code section 4999, (B) hospital insurance tax under Code section 3111(b) and (C) federal, state and local income taxes for which the Executive is assessedor will be liable on account of the payment of the amount described in item (i); and (iii) the further excise, determined without regard hospital insurance and income taxes for which the Executive is or will be liable on account of the payment of the amount described in item (ii) and this item (iii) and any other indemnification payment under this Section 14. The Additional Amount shall be calculated and paid to this section 16; FI = the highest marginal rate Executive at the time that the Change of income tax applicable Control Benefits are paid to Mxthe Executive. Xxxxxx under In calculating the Code for the taxable year in question; SLI = the sum of Additional Amount, the highest marginal rates of income tax applicable to Mx. Xxxxxx under all federal and applicable state and local laws income taxes applicable to individuals and in effect for the taxable year in question; and M = which the highest marginal rate of Medicare tax applicable to Mx. Xxxxxx under the Code for the taxable year Change in question. Such computation Control occurs shall be made at used. Nothing in this Section 14 shall give the expense Executive the right to receive indemnification from the Company or its affiliates for federal, state or local income taxes or hospital insurance taxes payable solely as a result of the Company by a member Executive’s receipt of (a) the Change of Control Benefits or (b) any additional payment, benefit or compensation other than additional compensation in the form of the firm of Txxxxxx Xxxxxxxx & Wxxx, or by an attorney or a firm of independent certified public accountants selected by MxAdditional Amount. Xxxxxx and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: (i) that a change As specified in ownership, a change in effective ownership or control, or a change in ownership of a substantial portion of assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); items (ii) that all direct or indirect payments made to or benefits conferred upon Mx. Xxxxxx on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) above, all income, hospital insurance and additional excise taxes resulting from additional compensation in the form of the excise tax payment specified in item (i) above shall be paid to the Executive. The provisions of this Section 14 are illustrated by the following example: Assume that no portion the Change of Control Benefits result in a total federal, state and local income tax and employment tax liability of $180,000 and an excise tax liability under Code Section 4999 of $70,000. Under such payments circumstances, the Executive is reasonable compensation solely responsible for services rendered prior the $180,000 income and employment tax liability; and the Additional Amount that the Company must pay to Mx. Xxxxxx’x termination the Executive equals $70,000, plus an amount necessary to indemnify the Executive for all federal, state and local income taxes, hospital insurance taxes, and excise taxes that will result from the $70,000 payment to the Executive and from all further indemnification to the Executive of employmenttaxes attributable to the initial $70,000 payment.

Excise Tax Indemnification. (a) If Mx. Xxxxxx’x employment terminates under circumstances entitling him (or Section 5 of the Agreement is amended to add the following paragraph: If, in the event written opinion of his deatha Big 6 accounting firm engaged by either the Company or the Exeuctive for this purpose (at the Company's expense), his estate) or if so alleged by the Internal Revenue Service, unless the Company by written notice to the Additional Termination EntitlementsExecutive elects to contest the allegation by the Internal Revenue Serviece (at the Company's expense), in which case no payment hereunder shall be paid and the Company shall prosecute its position to any conclusion it chooses, the aggregate of the benefit payments received by the Executive pursuant to the Employment Agreement executed on August 1, 1993 by the Executive and Pharmacy Management Services, Inc. ("PMSI") and any and all Addenda, including the Severance Agreement executed by the Executive and PMSI as amended on February 15, 1995, (the "Payments"), would constitute an "excess parachute payment" as defined in Section 280G(b) of the Internal Revenue Code (the "Code"), then the Company will pay to Mx. Xxxxxx (or in the event of his death, his estate) Executive an additional amount intended in cash (the "Gross-Up Payment") equal to indemnify him against the financial effects amount necessary to cause the net amount of Payments retained by the Executive, after deduction of any (i) excise tax imposed on excess parachute the payments under section 280G provided for in this paragraph; (ii) federal, state or local income tax on Gross-Up Payment, and (iii) excise tax on the Gross-Up Payment, to be equal to the aggregate remuneration the Executive would have received pursuant to the Payments, excluding such Gross-Up Payment (net of all federal, state and local excise and income taxes), as if Section 280G(b) and 4999 of the Code (the “Tax Indemnity Payment”)and any successor provisions thereto) had not been enacted into law. The Tax Indemnity Gross-Up Payment shall be determined under the following formula: X = E x P 1-[(FI x (1-SLI)) + SLI + E + M] where E = the percentage rate at which an excise tax is assessed under section 4999 of the Code; P = the amount with respect to which such excise tax is assessed, determined without regard to provided for in this section 16; FI = the highest marginal rate of income tax applicable to Mx. Xxxxxx under the Code for the taxable year in question; SLI = the sum of the highest marginal rates of income tax applicable to Mx. Xxxxxx under all applicable state and local laws for the taxable year in question; and M = the highest marginal rate of Medicare tax applicable to Mx. Xxxxxx under the Code for the taxable year in question. Such computation Paragraph shall be made at within thirty (30) days after such final determination by the expense of the Company by a member of the firm of Txxxxxx Xxxxxxxx & Wxxx, or by an attorney or a firm of independent certified public accountants selected by MxInternal Revenue Service. Xxxxxx and reasonably satisfactory to the Company (the “Tax Advisor”) and Any payments under this Paragraph shall be based on the following assumptions: (i) that a change in ownershiplieu of any gross-up payments otherwise due Executive under any agreement with PMSI, a change in effective ownership or controlPCA, or a change in ownership of a substantial portion of assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made relating to or benefits conferred upon Mx. Xxxxxx on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to Mx. Xxxxxx’x termination of employmentsaid Payments.

Excise Tax Indemnification. (a) This section 4 shall apply if Xx. Xxxxxx'x employment is terminated in circumstances giving rise to liability for excise taxes under section 4999 of the Internal Revenue Code of 1986 (the "Code"). If Mxthis Section 4 applies, then, if for any taxable year, Xx. Xxxxxx’x employment terminates Xxxxxx shall be liable for the payment of an excise tax under circumstances entitling him section 4999 of the Code with respect to any payment in the nature of compensation made by the Company or the Bank to (or in for the event of his death, his estatebenefit of) to the Additional Termination EntitlementsXx. Xxxxxx, the Company shall pay to MxXx. Xxxxxx (or in the event of his death, his estate) an additional amount intended equal to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be X determined under the following formula: X = E x P X =______________________________ 1-[(FI x (1-1 - SLI)) + SLI + E + MEM] where E = the percentage rate at which an the excise tax is assessed under section 4999 of the Code; P = the amount with respect to which such excise tax is assessed, determined without regard to this section 164; FI = the highest marginal rate of income tax applicable to MxXx. Xxxxxx under the Code for the taxable year in question; SLI = the sum of the highest marginal rates of income tax applicable to MxXx. Xxxxxx under all applicable state and local laws for the taxable year in question; and M = the highest marginal rate of Medicare tax applicable to MxXx. Xxxxxx under the Code for the taxable year in question. Such computation With respect to any payment in the nature of compensation that is made to (or for the benefit of) Xx. Xxxxxx under the terms of this Agreement, or otherwise, and on which an excise tax under section 4999 of the Code will be assessed, the payment determined under this section 4(a) shall be made at the expense of the Company by a member of the firm of Txxxxxx Xxxxxxxx & Wxxx, or by an attorney or a firm of independent certified public accountants selected by Mxto Xx. Xxxxxx and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: earlier of (i) that a change in ownership, a change in effective ownership the date the Company or controlthe Bank is required to withhold such tax, or a change in ownership of a substantial portion of assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made the date the tax is required to or benefits conferred upon Mxbe paid by Xx. Xxxxxx on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to Mx. Xxxxxx’x termination of employmentXxxxxx.

Excise Tax Indemnification. (a) This section 4 shall apply if Xx. Xxxx'x employment is terminated in circumstances giving rise to liability for excise taxes under section 4999 of the Internal Revenue Code of 1986 (the "Code"). If Mxthis Section 4 applies, then, if for any taxable year, Xx. Xxxxxx’x employment terminates Xxxx shall be liable for the payment of an excise tax under circumstances entitling him section 4999 of the Code with respect to any payment in the nature of compensation made by the Company or the Bank to (or in for the event of his death, his estatebenefit of) to the Additional Termination EntitlementsXx. Xxxx, the Company shall pay to MxXx. Xxxxxx (or in the event of his death, his estate) Xxxx an additional amount intended equal to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be X determined under the following formula: X = E x P X =______________________________ 1-[(FI x (1-1 - SLI)) + SLI + E + MEM] where E = the percentage rate at which an the excise tax is assessed under section 4999 of the Code; P = the amount with respect to which such excise tax is assessed, determined without regard to this section 164; FI = the highest marginal rate of income tax applicable to MxXx. Xxxxxx Xxxx under the Code for the taxable year in question; SLI = the sum of the highest marginal rates of income tax applicable to MxXx. Xxxxxx Xxxx under all applicable state and local laws for the taxable year in question; and M = the highest marginal rate of Medicare tax applicable to MxXx. Xxxxxx Xxxx under the Code for the taxable year in question. Such computation With respect to any payment in the nature of compensation that is made to (or for the benefit of) Xx. Xxxx under the terms of this Agreement, or otherwise, and on which an excise tax under section 4999 of the Code will be assessed, the payment determined under this section 4(a) shall be made at the expense of the Company by a member of the firm of Txxxxxx Xxxxxxxx & Wxxx, or by an attorney or a firm of independent certified public accountants selected by Mxto Xx. Xxxxxx and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based Xxxx on the following assumptions: earlier of (i) that a change in ownership, a change in effective ownership the date the Company or controlthe Bank is required to withhold such tax, or a change in ownership of a substantial portion of assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made the date the tax is required to or benefits conferred upon Mxbe paid by Xx. Xxxxxx on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to Mx. Xxxxxx’x termination of employmentXxxx.

Excise Tax Indemnification. (a) This section 4 shall apply if Xx. Xxxxxxx'x employment is terminated in circumstances giving rise to liability for excise taxes under section 4999 of the Internal Revenue Code of 1986 (the "Code"). If Mxthis Section 4 applies, then, if for any taxable year, Xx. Xxxxxx’x employment terminates Xxxxxxx shall be liable for the payment of an excise tax under circumstances entitling him section 4999 of the Code with respect to any payment in the nature of compensation made by the Company or the Bank to (or in for the event of his death, his estatebenefit of) to the Additional Termination EntitlementsXx. Xxxxxxx, the Company shall pay to MxXx. Xxxxxx (or in the event of his death, his estate) Xxxxxxx an additional amount intended equal to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be X determined under the following formula: X = E x P X = ------------------------------ 1-[(FI x (1-1 - SLI)) + SLI + E + MEM] where E = the percentage rate at which an the excise tax is assessed under section 4999 of the Code; P = the amount with respect to which such excise tax is assessed, determined without regard to this section 164; FI = the highest marginal rate of income tax applicable to MxXx. Xxxxxx Xxxxxxx under the Code for the taxable year in question; SLI = the sum of the highest marginal rates of income tax applicable to MxXx. Xxxxxx Xxxxxxx under all applicable state and local laws for the taxable year in question; and M = the highest marginal rate of Medicare tax applicable to MxXx. Xxxxxx Xxxxxxx under the Code for the taxable year in question. Such computation With respect to any payment in the nature of compensation that is made to (or for the benefit of) Xx. Xxxxxxx under the terms of this Agreement, or otherwise, and on which an excise tax under section 4999 of the Code will be assessed, the payment determined under this section 4(a) shall be made at the expense of the Company by a member of the firm of Txxxxxx Xxxxxxxx & Wxxx, or by an attorney or a firm of independent certified public accountants selected by Mxto Xx. Xxxxxx and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based Xxxxxxx on the following assumptions: earlier of (i) that a change in ownership, a change in effective ownership the date the Company or controlthe Bank is required to withhold such tax, or a change in ownership of a substantial portion of assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made the date the tax is required to or benefits conferred upon Mxbe paid by Xx. Xxxxxx on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to Mx. Xxxxxx’x termination of employmentXxxxxxx.