Common use of Excise Tax Clause in Contracts

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, in each case, that are treated as contingent on a “change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 (the “Parachute Payments”), would be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For the purposes of this Section 5(c), “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00).

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, in each case, that are treated as contingent on a “change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 otherwise (the “Parachute Payments”), would be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from subject to Section 409A of the Code; (3) other cash or nonequity-cash based payments that are exempt from Section 409Aand acceleration; and (4) other payments or benefits (reduced in a manner that complies with Section 409A non-cash forms of the Code)benefits. To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For the purposes of this Section 5(c), “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by the Executive with respect to such excise tax.

Excise Tax. (i) 3.1. Anything in this Agreement to the contrary notwithstanding, in the event if it shall be determined that any payment, distribution or benefit provided (including, without limitation, the acceleration of any payment, distribution or benefit and the acceleration of vesting of any equity-based or other compensation, payment or distribution by ) to the Company to Executive or for the his benefit of the Executive, (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) would be subject, in each casewhole or in part, that are treated as contingent on a “change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 (the “Parachute Payments”), would be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), then the following provisions amounts payable to the Executive under this Agreement shall apply: be reduced (A) If the Parachute Payments, reduced by the sum of (1minimum possible amount) until no amount payable to the Executive is subject to the Excise Tax and Tax; provided, however, that no such reduction shall be made if the net after-tax benefit (2) the total of the Federalafter taking into account federal, state, local or other income, employment, self-employment and excise taxes) to which the Executive would otherwise be entitled without such reduction would be greater than the net after-tax benefit (after taking into account federal, state, local income or other income, employment, self-employment and employment taxes excise taxes) to the Executive resulting from the receipt of such payments with such reduction. If, as a result of subsequent events or conditions, it is determined that payments have been reduced by more than the minimum amount required under this Section 3, then an additional payment shall be made to the Executive in an amount equal to the excess reduction within sixty (for the avoidance of doubt, without duplication 60) days of the Excise Tax) payable by the Executive date on which the amount of the Parachute Payments which are in excess reduction is determined, but not later than December 31 of the Threshold Amount, are greater than or equal to year in which the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreementexcess reduction is determined. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount3.2. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To the extent any payment is All determinations required to be made over time (e.g.under this Section 3, including whether a payment would result in installmentsan Excise Tax, etc.), then the payments shall be reduced made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive as requested by the Company or the Executive. All fees and expenses of the Accounting Firm shall be borne solely by the Company and shall be paid by the Company. Except as set forth in reverse chronological order. (ii) For the purposes last sentence of Section 3.1 hereof, all determinations made by the Accounting Firm under this Section 5(c), “Threshold Amount” 3 shall mean three times be final and binding upon the Company and the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00).

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, in each case, that are treated as contingent on a “change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 otherwise (the “Parachute Payments”), would be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from subject to Section 409A of the Code; (3) other cash or nonequity-cash based payments that are exempt from Section 409Aand acceleration; and (4) other payments or benefits (reduced in a manner that complies with Section 409A non-cash forms of the Code)benefits. To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For the purposes of this Section 5(c), “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00).

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in In the event that any compensation, payment payments or distribution benefits received or to be received by the Company to or for the benefit of Executive in connection with the Executive, 's employment or termination thereof (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwiseany other plan, in each casearrangement or agreement with the Company, that are treated as contingent on a “change in ownership of control” within or any person affiliated with the meaning of Treasury Regulations Section 1.280G-1 Company) (the “Parachute "Payments”"), would are or will be subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the Code (including or any interest or penalties incurred by similar tax that may hereafter be imposed), (i) then, subject to the Executive with respect to such excise tax, the “Excise Tax”immediately following paragraph (ii), the following provisions Company shall apply: pay, subject to Section 4(d)(v), an additional amount (Athe "Gross-Up Payment") If such that the Parachute Payments, reduced net amount retained by the sum Executive, after deduction of (1) the any Excise Tax on the Payments and (2) the total of the Federalany federal, state, state and local income or other applicable tax (other than taxes imposed under 409A) and employment taxes (Excise Tax upon the payment provided for the avoidance of doubtby this paragraph, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or shall be equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this AgreementPayments. (Bii) If Notwithstanding anything in the Threshold Amount is less than foregoing paragraph (xi) to the Parachute Paymentscontrary, but greater than the foregoing provision shall not apply (ytherefore no Gross-Up Payment will be made) the Parachute Payments reduced by the sum of (1and any amounts otherwise payable to Executive under Section 4(b) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) such that no amounts paid or payable to the minimum extent necessary so that Executive under Section 4(b) shall be deemed excess parachute payments subject to Excise Tax, in the sum event the amount of all Parachute Payments shall such reduction does not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: ten percent (110%) cash severance payments not subject to Section 409A of the Code; (2) non-total amount payable under Section 4(b). The Company shall reduce or eliminate the Severance Benefits by first reducing or eliminating the portion of such benefits which are not payable in cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other and then by reducing or eliminating cash or non-cash payments that are exempt from Section 409A; and (4) other payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Executive's Date of Termination. (reduced in a manner that complies with Section 409A iii) For purposes of determining the amount of the Code). To Gross-Up Payment, the extent any payment Executive shall be deemed to pay federal income taxes at the Executive's actual rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made over time (e.g.and state and local income taxes at the Executive's actual rate of taxation in the state and locality of the Executive's residence on the date on which the Excise Tax is determined, net of the reduction in installments, etc.), then the payments shall federal income taxes which could be reduced in reverse chronological orderobtained from deduction of such state and local taxes. (iiiv) For the purposes of The computations required by this Section 5(c)7(b) shall be made by independent public accountants not then regularly retained by the Company, “Threshold Amount” shall mean three times in consultation with tax counsel selected by them and acceptable to the Executive’s “base amount” within . The Company shall provide the meaning Executive with sufficient tax and compensation data to enable the Executive or his/her tax advisor to verify such computations and shall reimburse the Executive for reasonable fees and expenses incurred with respect thereto. (v) In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by the Executive) plus interest on the amount of such repayment from the date the Gross-Up Payment was initially made to the date of repayment at the rate provided in Section 280G(b)(31274(b)(2)(B) of the Code and (the regulations promulgated thereunder less one dollar "Applicable Rate"). In the event that the Excise Tax is determined by the Internal Revenue Service or by such independent public accountants to exceed the amount taken into account hereunder ($1.00including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties, fines or additions to tax payable with respect to such excess) at the time that the amount of such excess if finally determined.

Excise Tax. (i) Anything in this Agreement If it shall be determined that any payment to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable Executive pursuant to the terms of this Agreement or otherwiseany other payment or benefit from the Employer, in each caseany affiliate, any stockholder of the Employer or any other person that are treated as contingent on constitutes a “change in ownership parachute payment” as defined by Section 280G of control” within the meaning of Treasury Regulations Section 1.280G-1 (the “Parachute Payments”), Code would be subject to the excise tax imposed by Section 4999 of the Code because the total present value of such parachute payments equals or exceeds three times the “Base Amount” (including any interest or penalties incurred by as defined under Section 280G of the Executive with respect Code), then such parachute payments shall be reduced to an amount (the “Reduced Amount”) such that the total present value of all such parachute payments, calculated as provided in Section 280G, equals one dollar less than three times the Base Amount; provided, however, that such reduction shall be made if and only if the Reduced Amount is at least equal to the total amount of all parachute payments prior to such excise tax, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on reduction less the amount of the Parachute Payments excise tax that would be imposed on the Executive under Section 4999 if the parachute payments were not so reduced. Such reduction shall be done (i) first by reducing all cash parachute payments in the reverse order that they are scheduled to be paid, (ii) next by reducing all performance-vested equity grants, the acceleration of which are would result in excess parachute payments, in proportion to the value of such grants, and (iii) next by reducing all time-vested equity grants, the acceleration of which would result in parachute payments, in the reverse order of the Threshold Amountdate on which they would otherwise have vested, are greater than or equal and the Executive hereby consents to the Threshold Amountreduction of any parachute payments, the Executive shall be entitled to the full benefits payable under payment or vesting of which is not governed by this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For the purposes of this Section 5(c), “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00).

Excise Tax. [FOR EXECUTIVES WORKING OUTSIDE THE U.S., ADD THE FOLLOWING: To the extent the Executive is subject to U.S. taxes, the following shall apply:] (ia) Anything in this Agreement to the contrary notwithstanding, in the event if it shall be determined that any payment, distribution or benefit provided (including, without limitation, the acceleration of any payment, distribution or benefit and the acceleration of vesting of any equity-based or other compensation, payment or distribution by ) to the Company to Executive or for the [his][her] benefit of the Executive, (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) would be subject, in each casewhole or in part, that are treated as contingent on a “change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 (the “Parachute Payments”), would be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), then the following provisions amounts payable to the Executive under this Agreement shall apply: be reduced (A) If the Parachute Payments, reduced by the sum of (1minimum possible amount) until no amount payable to the Executive is subject to the Excise Tax and Tax; provided, however, that no such reduction shall be made if the net after-tax benefit (2) the total of the Federalafter taking into account federal, state, local or other income, employment, self-employment and excise taxes) to which the Executive would otherwise be entitled without such reduction would be greater than the net after-tax benefit (after taking into account federal, state, local income or other income, employment, self-employment and employment taxes (for excise taxes) to the avoidance Executive resulting from the receipt of doubtsuch payments with such reduction. If, without duplication as a result of subsequent events or conditions, it is determined that payments have been reduced by more than the minimum amount required under this Section 7, then an additional payment shall be made to the Executive in an amount equal to the excess reduction within 60 days of the Excise Tax) payable by the Executive date on which the amount of the Parachute Payments which are in excess reduction is determined but not later than December 31 of the Threshold Amount, are greater than or equal to year in which the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreementexcess reduction is determined. (Bb) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To the extent any payment is All determinations required to be made over time (e.g.under this Section 7, including whether a payment would result in installmentsan Excise Tax, etc.), then the payments shall be reduced made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive as requested by the Company or the Executive. All fees and expenses of the Accounting Firm shall be borne solely by the Company or the Parent Company and shall be paid by the Company or the Parent Company. Except as set forth in reverse chronological order. (iithe last sentence of Section 7(a) For hereof, all determinations made by the purposes of Accounting Firm under this Section 5(c), “Threshold Amount” 7 shall mean three times be final and binding upon the Company and the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00).

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in In the event that any compensation, payment payments or distribution benefits received or to be received by the Company to or for the benefit of Executive in connection with the Executive, ’s employment or termination thereof (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwiseany other plan, in each casearrangement or agreement with the Company, that are treated as contingent on a “change in ownership of control” within or any person affiliated with the meaning of Treasury Regulations Section 1.280G-1 Company) (the “Parachute Payments”), would are or will be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code (including or any interest or penalties incurred by similar tax that may hereafter be imposed), (i) then, subject to the Executive with respect to such excise tax, the “Excise Tax”immediately following paragraph (ii), the following provisions Company shall apply: pay at the time specified below, an additional amount (Athe “Gross-Up Payment”) If such that the Parachute Payments, reduced net amount retained by the sum Executive, after deduction of (1) the any Excise Tax on the Payments and (2) the total of the Federalany federal, state, state and local income or other applicable tax and employment taxes (Excise Tax upon the payment provided for the avoidance of doubtby this paragraph, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or shall be equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this AgreementPayments. (Bii) If Notwithstanding anything in the Threshold Amount is less than foregoing paragraph (xi) to the Parachute Paymentscontrary, but greater than the foregoing provision shall not apply (ytherefore no Gross-Up Payment will be made) the Parachute Payments reduced by the sum of (1and any amounts otherwise payable to Executive under Section 4(b) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) such that no amounts paid or payable to the minimum extent necessary so that Executive under Section 4(b) shall be deemed excess parachute payments subject to Excise Tax, in the sum event the amount of all Parachute Payments shall such reduction does not exceed ten percent (10%) of the Threshold Amounttotal amount payable under Section 4(b). In such eventUnless the Executive shall have given prior written notice specifying a different order to the Company to effectuate the foregoing, the Parachute Payments Company shall be reduced reduce or eliminate the Severance Benefits, by first reducing or eliminating the portion of such benefits which are not payable in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-and then by reducing or eliminating cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the determination made by the independent public accountants selected under the preceding paragraph. Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive’s rights and entitlements to any benefits or compensation. (reduced in a manner that complies with Section 409A iii) For purposes of determining the amount of the Code). To Gross-Up Payment, the extent any payment Executive shall be deemed to pay federal income taxes at the Executive’s highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made over time (e.g.and state and local income taxes at the Executive’s highest marginal rate of taxation in the state and locality of the Executive’s residence on the date on which the Excise Tax is determined, net of the maximum reduction in installments, etc.), then the payments shall federal income taxes which could be reduced in reverse chronological orderobtained from deduction of such state and local taxes. (iiiv) For the purposes of The computations required by this Section 5(c)7(b) shall be made by independent public accountants not then regularly retained by the Company, “Threshold Amount” shall mean three times in consultation with tax counsel selected by them and acceptable to the Executive’s “base amount” within . The Company shall provide the meaning Executive with sufficient tax and compensation data to enable the Executive or his/her tax advisor to verify such computations and shall reimburse the Executive for reasonable fees and expenses incurred with respect thereto. (v) In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by the Executive) plus interest on the amount of such repayment from the date the Gross-Up Payment was initially made to the date of repayment at the rate provided in Section 280G(b)(31274(b)(2)(B) of the Code and (the regulations promulgated thereunder “Applicable Rate”). In the event that the Excise Tax is determined by the Internal Revenue Service or by such independent public accountants to exceed the amount taken into account hereunder (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties, fines or additions to tax payable with respect to such excess) at the time that the amount of such excess if finally determined. (vi) Any payment to be made under this paragraph shall be payable within fifteen (15) days of the determination of the accountants that such a payment is required hereunder and, if applicable, within fifteen (15) days of such determination that the Excise Tax is greater or less one dollar than initially calculated but, in no event, later than thirty ($1.00)30) days after the Executive’s receipt of the Payments resulting in such Excise Tax.

Excise Tax. (ia) Anything in this Agreement to the contrary notwithstanding, in In the event that Executive become entitled to any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or amounts payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, in each case, that are treated as contingent on connection with a “change in ownership of control” or control (within the meaning of Treasury Regulations Section 1.280G-1 280G of the Internal Revenue Code of 1986, as amended (the “Parachute "Code")) or termination of employment during the Term (whether or not such amounts are payable pursuant to this Agreement) (the "Severance Payments”"), would be if any of such Severance Payments are subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the Code (including or any interest similar federal, state or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”local tax that may hereafter be imposed), the following provisions Company shall apply: pay to Executive at the time specified in Sections 4(c) and/or 7(a) hereof an additional amount (Athe "Gross-Up Payment") If such that the Parachute Paymentsnet amount retained by Executive, reduced by the sum after deduction of (1) the any Excise Tax on the Total Payments (as hereinafter defined) and (2) the total of the Federalany federal, state, state and local income and employment taxes (and Excise Tax upon the payment provided for the avoidance of doubtby this Section 8, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or shall be equal to the Threshold AmountTotal Payments. The foregoing notwithstanding, if the Severance Payments exceed the Safe Harbor Amount (as defined below) and a reduction of up to 15% of any cash payments pursuant to Sections 4(c) and/or 7(a) hereof would cause the Severance Payments to be equal to the Safe Harbor Amount and thereby avoid the imposition of any Excise Tax, the Executive shall be entitled cash payments pursuant to the full benefits payable under this Agreement. (BSections 4(c) If the Threshold Amount is less than (xand/or 7(a) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments hereof shall be reduced to the extent necessary (but not below zeroup to 15%) to result in all remaining Severance Payments equal to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Safe Harbor Amount. In such event, the Parachute Payments The "Safe Harbor Amount' shall be reduced in the following order: (1) cash severance payments not subject to Section 409A mean one dollar less than 300% of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For the purposes of this Section 5(c), “Threshold Amount” shall mean three times the Executive’s “"base amount” within the meaning of " as determined in accordance with Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00)Code.

Excise Tax. (ia) Anything in this Agreement Notwithstanding anything contained herein to the contrary notwithstandingcontrary, in prior to the event that payment of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable amounts pursuant to Section 10(c) hereof, an independent national accounting firm designated by FIC (the terms of this Agreement or otherwise"Accounting Firm") shall compute whether there would be any "excess parachute payments" payable to Employee, in each case, that are treated as contingent on a “change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 280G of the Internal Revenue Code of 1986, as amended (the “Parachute Payments”"Code"), taking into account the total "parachute payments," within the meaning of Section 280G of the Code, payable to Employee by FIC or any successor thereto under this Agreement and any other plan, agreement or otherwise. If there would be subject any excess parachute payments, the Accounting Firm will compute the net after-tax proceeds to Employee, taking into account the excise tax imposed by Section 4999 of the Code Code, if (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Payments, reduced by the sum of (1i) the Excise Tax and (2) the total of the Federalpayments hereunder were reduced, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero, such that the total parachute payments payable to Employee would not exceed three (3) times the "base amount" as defined in Section 280G of the Code, less One Dollar ($1.00), or (ii) the payments hereunder were not reduced. If reducing the payments hereunder would result in a greater after-tax amount to Employee, such lesser amount shall be paid to Employee. If not reducing the payments hereunder would result in a greater after-tax amount to Employee, such payments shall not be reduced. The determination by the Accounting Firm shall be binding upon FIC and Employee subject to the minimum extent necessary so application of Section 13(b) hereof. (b) As a result of uncertainty in the application of Sections 280G of the Code, it is possible that excess parachute payments will be paid when such payment would result in a lesser after-tax amount to Employee; this is not the sum of all Parachute Payments shall not exceed the Threshold Amountintent hereof. In such eventcases, the Parachute Payments shall payment of any excess parachute payments will be reduced void ab initio as regards any such excess. Any excess will be treated as an overpayment by FIC to Employee. Employee will return the overpayment to FIC, within fifteen (15) business days of any determination by the Accounting Firm that excess parachute payments have been paid when not so intended, with interest at an annual rate equal to the rate provided in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For the purposes of this Section 5(c), “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(31274(d) of the Code (or 120% of such rate if the Accounting Firm determines that such rate is necessary to avoid an excise tax under Section 4999 of the Code) from the date Employee received the excess until it is repaid to FIC. (c) All fees, costs and expenses (including, but not limited to, the regulations promulgated thereunder less one dollar ($1.00)cost of retaining experts) of the Accounting Firm shall be borne by FIC and FIC shall pay such fees, costs, and expenses as they become due. In performing the computations required hereunder, the Accounting Firm shall assume that taxes will be paid for state and federal purposes at the highest possible marginal tax rates which could be applicable to Employee in the year of receipt of the payments, unless Employee agrees otherwise.

Excise Tax. (ia) Anything in this Agreement to the contrary notwithstanding, in In the event that a Change in Control shall occur, and a final determination is made by legislation, regulation, ruling directed to Executive or Employer, by court decision, or by independent tax counsel described in subsection (b) next below, that the aggregate amount of any compensationpayment made to Executive (1) hereunder, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable and (2) pursuant to the terms any plan, program or policy of this Agreement Employer in connection with, on account of, or otherwiseas a result of, such Change in each case, that are treated as contingent on a Control (“change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 (the “Parachute Total Payments”), would ) will be subject to the excise tax imposed by provisions of Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Paymentsor any successor section thereof, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to receive from Employer, in addition to any other amounts payable hereunder, a lump sum payment (the “Gross-Up Payment”), sufficient to cover the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Paymentscost of such excise taxes and Executive’s federal, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, state and local income and employment taxes on this additional payment so that the net amount retained by Executive, after the payment of all such excise taxes on the Total Payments, and all federal, state and local income and employment taxes and excise taxes on the Gross-Up Payment, shall be equal to the Total Payments. The Total Payments, however, shall be subject to any federal, state and local income and employment taxes thereon. For this purpose, Executive shall be deemed to be in the highest marginal rate of federal, state and local taxes. The Gross-Up Payment shall be made at the same time as the payments described in subsections 3(a)(1) above. Notwithstanding the foregoing provisions of this Section 4(a), if it shall be determined that Executive is entitled to the Gross-Up Payment, but that the Total Payments do not exceed 110% of the greatest amount that could be paid to Executive such that the receipt of the Total Payments will not give rise to any Excise Tax (the “Reduced Amount”), then no Gross-Up Payment shall be made to Executive and the Total Payments shall be reduced to the Reduced Amount. In the event that the Total Payments would be reduced as provided in the previous sentence, then such reduction shall be determined in a manner which has the least economic cost to Executive and, to the extent the economic cost is equivalent, the Total Payments will be reduced in the inverse order of when the Total Payments would have been made to Executive until the reduction specified is achieved. (b) Employer and Executive shall mutually and reasonably determine the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) nonGross-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To the extent any payment is Up Payment to be made over time to Executive pursuant to the preceding subsection. Prior to the making of any such Gross-Up Payment, either party may request a determination as to the amount of such Gross-Up Payment. If such a determination is requested, it shall be made promptly, at Employer’s expense, by independent tax counsel selected by Executive and approved by Employer (e.g., in installments, etc.which approval shall not unreasonably be withheld), then the payments and such determination shall be reduced conclusive and binding on the parties. Employer shall provide such information as such counsel may reasonably request, and such counsel may engage accountants or other experts at Employer’s expense to the extent that they deem necessary or advisable to enable them to reach a determination. The term “independent tax counsel,” as used herein, shall mean a law firm of recognized expertise in reverse chronological orderfederal income tax matters that has not previously advised or represented either party. (iic) For In the purposes event the Internal Revenue Service subsequently adjusts the excise tax computation made pursuant to subsections 4(a) and (b) above, Employer shall pay to Executive, or Executive shall pay to Employer, as the case may be, the full amount necessary to make either Executive or Employer whole had the excise tax initially been computed as subsequently adjusted, including the amount of any underpaid or overpaid excise tax, and any related interest and/or penalties due to the Internal Revenue Service. Any payment by Employer or reimbursement made by Executive pursuant to this Section 5(c), “Threshold Amount” 4(c) shall mean three times be paid or reimbursed by the Executive’s “base amount” within the meaning of Section 280G(b)(3) end of the Code and taxable year next following the regulations promulgated thereunder less one dollar ($1.00)taxable year in which the payment or reimbursement of taxes is made or received, as the case may be.

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in the event that if any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable that you would receive pursuant to the terms of this Agreement or otherwise, in each case, that are treated as contingent on otherwise (“Payment”) would (i) constitute a “change in ownership of controlparachute payment” within the meaning of Treasury Regulations Section 1.280G-1 280G of the Code, and (the “Parachute Payments”)ii) but for this sentence, would be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), the following provisions then such Payment shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or be equal to the Threshold Reduced Amount (defined below). The “Reduced Amount, the Executive ” shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than either (y) the Parachute Payments reduced by largest portion of the sum Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax, or (z) the entire Payment, whichever amount after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in your receipt, on an after-tax basis, of the greatest amount of the Payment to you. If a reduction in the Payment is to be made, the reduction in payments and/or benefits shall occur in the following order unless you elect in writing a different order (provide, however, that such election shall be Xxxxxxx Xxxxx January 17, 2007 subject to Company approval if made on or after the date on which the event that triggers the Payment occurs): (1) the Excise Tax and (2) the total reduction of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Codepayments; (2) non-cash severance payments cancellation of accelerated vesting of equity awards other than equity acceleration that are exempt from Section 409A of the Codestock options; (3) other cash or non-cash payments that are exempt from Section 409Acancellation of accelerated vesting of stock options; and (4) reduction of other payments or benefits (reduced in a manner paid to you. In the event that complies with Section 409A acceleration of the Code). To the extent any payment compensation from your equity awards is to be made over time (e.g.reduced, in installments, etc.), then the payments such acceleration of vesting shall be reduced canceled in the reverse chronological order. (ii) For the purposes of this Section 5(c), “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) order of the Code date of grant unless you elect in writing a different order for cancellation. The Company shall reasonably determine the procedures and manner of making the regulations promulgated thereunder less one dollar ($1.00)calculation required above.

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in In the event that any compensation, payment payments or distribution benefits provided or to be provided by the Company Bank or its Affiliates to Employee or for the Employee’s benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, in each case, that are treated as contingent on a otherwise (“change in ownership of controlCovered Payments”) constitute “parachute payments” within the meaning of Treasury Regulations Section 1.280G-1 280G of the Code (the “Parachute Payments”or any successor provision thereto) and would, but for this Section 24(b), would be subject to the excise tax imposed by Section 4999 of the Code (including or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties incurred by the Executive with respect to such excise taxtaxes (collectively, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Covered Payments shall be reduced (but not below zero) to the minimum extent necessary so to ensure that no portion of the sum of all Parachute Covered Payments shall not exceed is subject to the Threshold Amount. In such event, the Parachute Excise Tax. (ii) The Covered Payments shall be reduced in a manner that maximizes Employee’s economic position. In applying this principle, the following order: (1) cash severance payments not subject to reduction shall be made in a manner consistent with the requirements of Section 409A of the Code; , 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. (2iii) non-cash severance payments other than equity acceleration If, notwithstanding any reductions described in this Section 24(b), the IRS determines that are exempt from any Covered Payment constitutes an excess parachute payment (as defined by Section 409A of the Code; (3280G(b) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To , then this Section 24(b) shall be reapplied based on the extent any payment is IRS’ determination and Employee shall be obligated to be made over time (e.g.pay back to Bank, within 30 days after a final IRS determination or, in installmentsthe event that Employee challenges the final IRS determination, etc.)a final judicial determination, then the payments shall be reduced in reverse chronological orderportion of the Covered Payment required to avoid imposition of the Excise Tax. (iiiv) For the purposes of Any determination required under this Section 5(c24(b), “Threshold Amount” including whether any payments or benefits are parachute payments, shall mean three times the Executivebe made by Bank in its sole discretion. Employee shall provide Bank with such information and documents as Bank may reasonably request in order to make a determination under this Section 24(b). Bank’s “base amount” within the meaning of Section 280G(b)(3) of the Code determinations shall be final and the regulations promulgated thereunder less one dollar ($1.00)binding on Bank and Employee.

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in In the event that the aggregate present value of the Executive's payments under this Agreement, and any compensationplan, payment program or distribution arrangement maintained by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, in each case, that are treated as contingent on a “change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 constitutes an "excess parachute payment" (the “Parachute Payments”), would be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code). To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For the purposes of this Section 5(c), “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3280G(b)(1) of the Code Code), and the regulations promulgated thereunder excise tax on such payment would cause the net parachute payments (after taking into account federal, state and local income, payroll and excise taxes) to which the Executive otherwise would be entitled to be less than what the Executive would have netted (after taking into account federal, state and local taxes) had the present value of his total parachute payments equalled $1.00 less than three times his "base amount" (within the meaning of Section 280G(b)(2)(A) of the Code), his payments hereunder (starting with any lump sum payment) shall be reduced (by the minimum possible amount) so that the aggregate present value equals $1.00 less than three times such base amount. For purposes of this calculation, it shall be assumed that the Executive's tax rate is the maximum marginal federal, state and local income tax rate on earned income, with such maximum federal rate to be computed with regard to Code Section 1(g), if applicable. The determination of the amount of any such reduction shall be made by the Executive in the first instance but in the event the Company disagrees with such determination, the Executive shall select, at the Company's expense, a law firm or accounting firm from among those regularly consulted by the Company in the twelve months preceding the change in control regarding federal income tax or employee benefit matters and such law firm or accounting firm shall determine the amount of such reduction and such determination shall be final and binding on the Executive and the Company. In such case, subject to the Company's reasonable approval, the Executive may request the Company to reduce amounts of compensation or benefits payable or provided to Executive in the order specified by Executive, provided, however, that any nontaxable compensation or benefits including, without limitation, health benefits, shall be the last items reduced hereunder. DKI will use commercially reasonable efforts to solicit the opinion of Ernst & Young or other accounting firm regarding the value of the restrictive covenants set forth in Sections 6(a) and (b) of this Agreement that could clearly and convincingly constitute reasonable compensation for purposes of calculating parachute amounts under Section 280G of the Code; such advice to be delivered in the form of a preliminary letter in approximately 30 days following execution of this Agreement or as soon as practicable thereafter, and to be followed with a written opinion in approximately 20 days thereafter or as soon as practicable thereafter. Solely with respect to any change in ownership of DKI (within the meaning of Section 280G(b)(2)(A)(i)(I) or (II) occurring within one dollar year following the Effective Date, the law firm or accounting firm engaged to calculate the determination contemplated under the first paragraph of this Section 7 ($1.00the "Parachute Determination") shall be directed to calculate such Parachute Determination in a manner which treats as reasonable compensation not constituting a parachute payment an amount equal to or exceeding the value of the restrictive covenants as determined by Ernst & Young (or such other accounting firm), as contemplated under the immediately preceding sentence; provided, however, that (i) DKI is in substantially the same or better financial position as of the effective date of the Parachute Determination as compared to the effective date of the valuation of the restrictive covenants as determined by Ernst & Young (or such other accounting firm); and (ii) the law has not changed in a manner which discredits or otherwise challenges any methodology, valuation or approach which is similar to the methodology, valuation or approach used by Ernst & Young (or such other accounting firm) and no court of competent jurisdiction has invalidated any such methodology, valuation or approach for purposes of determining reasonable compensation under Section 280G of the Code. In the event that item (i) in the preceding sentence is untrue, DKI will use its commercially reasonable efforts to request the law firm or accounting firm engaged to make the Parachute Determination to adjust the value of the restricted covenant as determined by Ernst & Young (or such other accounting firm) in a manner which reflects the change in DKI's financial position, provided, however, that item (ii) in the preceding sentence is true.

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in In the event that any compensation, payment or distribution by the Company to or benefits provided for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of in this Agreement or otherwise, in each case, that are treated as contingent on Section 9 would constitute a “change in ownership of controlparachute payment” within the meaning of Treasury Regulations Section 1.280G-1 (280G of the “Parachute Payments”)Code, would and but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise TaxTax”)(a “280G Payment”), then any such 280G Payment (the following provisions “Payment”) shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or be equal to the Threshold Reduced Amount, the Executive . The “Reduced Amount” shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than either (x) the Parachute Payments, but greater than largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the Parachute Payments reduced largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by the sum of clause (1x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax and (2) all computed at the total highest applicable marginal rate), results in Employee’s receipt, on an after-tax basis, of the Federal, state, and local income and employment taxes on the amount greater economic benefit notwithstanding that all or some portion of the Parachute Payments which are Payment may be subject to the Excise Tax. If a reduction in excess a Payment is required pursuant to the preceding sentence and ​ the Reduced Amount is determined pursuant to clause (x) of the Threshold Amountpreceding sentence, then the Parachute Payments reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Employee. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code“Pro Rata Reduction Method”). To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For Notwithstanding any provision to the purposes contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of this the Payment being subject to taxes pursuant to Section 5(c409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Employee as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “Threshold Amount” shall mean three times the Executive’s “base amountdeferred compensation” within the meaning of Section 280G(b)(3409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A. (iii) Unless Employee and XOMA agree on an alternative accounting firm, the accountants shall perform the foregoing calculations. If the accountants are serving as accountant or auditor for the individual, entity or group effecting the Change of Control transaction, XOMA shall appoint a nationally recognized accounting firm to make the determinations required by this Section. For purposes of making the calculations required by this Section, the accountants may make reasonable assumptions and approximations and may rely on interpretations concerning the application of the Code for which there is a “substantial authority” tax reporting position. The Parties shall furnish such information and documents as the accountants may reasonably request in order to make a determination under this Section. XOMA shall bear all reasonable costs the accountants incur in connection with calculations contemplated by this Section. XOMA shall use commercially reasonable efforts to cause the accountants to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Employee and XOMA within fifteen (15) calendar days after the date on which Employee’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Employee or XOMA) or such other time as requested by Employee or XOMA. (iv) If Employee receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 9(g)(i) and the regulations promulgated thereunder less one dollar Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Employee agrees to promptly return to XOMA a sufficient amount of the Payment ($1.00after reduction pursuant to clause (x) of Section 9(g)(i)) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y), Employee shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, in each case, that are treated as contingent on a “change in ownership of control” within the meaning of Treasury Regulations Section 1.280G-1 otherwise (the “Parachute Payments”), would be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”), the following provisions shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than (x) the Parachute Payments, but greater than (y) the Parachute Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes on the amount of the Parachute Payments which are in excess of the Threshold Amount, then the Parachute Payments shall be reduced (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from subject to Section 409A of the Code; (3) other cash or nonequity-cash based payments that are exempt from Section 409Aand acceleration; and (4) other payments or benefits (reduced in a manner that complies with Section 409A non-cash forms of the Code)benefits. To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For the purposes of this Section 5(c5(b), “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00).

Excise Tax. (i) Anything in this Agreement to the contrary notwithstanding, in In the event that any compensation, payment or distribution by the Company to or benefits provided for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of in this Agreement or otherwise, in each case, that are treated as contingent on Section 9 would constitute a “change in ownership of controlparachute payment” within the meaning of Treasury Regulations Section 1.280G-1 (280G of the “Parachute Payments”)Code, would and but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Executive with respect to such excise tax, the “Excise Tax”) (a “280G Payment”), then any such 280G Payment (the following provisions “Payment”) shall apply: (A) If the Parachute Payments, reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state, and local income and employment taxes (for the avoidance of doubt, without duplication of the Excise Tax) payable by the Executive on the amount of the Parachute Payments which are in excess of the Threshold Amount, are greater than or be equal to the Threshold Reduced Amount, the Executive . The “Reduced Amount” shall be entitled to the full benefits payable under this Agreement. (B) If the Threshold Amount is less than either (x) the Parachute Payments, but greater than largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the Parachute Payments reduced largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by the sum of clause (1x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax and (2) all computed at the total highest applicable marginal rate), results in Employee’s receipt, on an after-tax basis, of the Federal, state, and local income and employment taxes on the amount greater economic benefit notwithstanding that all or some portion of the Parachute Payments which are Payment may be subject to the Excise Tax. If a reduction in excess a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the Threshold Amountpreceding sentence, then the Parachute Payments reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Employee. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (but not below zero) to the minimum extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount. In such event, the Parachute Payments shall be reduced in the following order: (1) cash severance payments not subject to Section 409A of the Code; (2) non-cash severance payments other than equity acceleration that are exempt from Section 409A of the Code; (3) other cash or non-cash payments that are exempt from Section 409A; and (4) other payments or benefits (reduced in a manner that complies with Section 409A of the Code“Pro Rata Reduction Method”). To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order. (ii) For Notwithstanding any provision to the purposes contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of this the Payment being subject to taxes pursuant to Section 5(c409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Employee as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “Threshold Amount” shall mean three times the Executive’s “base amountdeferred compensation” within the meaning of Section 280G(b)(3409A shall be ​ ​ ​ reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A. (iii) Unless Employee and XOMA agree on an alternative accounting firm, XOMA’s accountants shall perform the foregoing calculations. If the accountants are serving as accountant or auditor for the individual, entity or group effecting the Change of Control transaction, XOMA shall appoint a nationally recognized accounting firm to make the determinations required by this Section. For purposes of making the calculations required by this Section, the accountants may make reasonable assumptions and approximations and may rely on interpretations concerning the application of the Code for which there is a “substantial authority” tax reporting position. The Parties shall furnish such information and documents as the accountants may reasonably request in order to make a determination under this Section. XOMA shall bear all reasonable costs the accountants incur in connection with calculations contemplated by this Section. XOMA shall use commercially reasonable efforts to cause the accountants to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Employee and XOMA within fifteen (15) calendar days after the date on which Employee’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Employee or XOMA) or such other time as requested by Employee or XOMA. (iv) If Employee receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 9(g)(i) and the regulations promulgated thereunder less one dollar Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Employee agrees to promptly return to XOMA a sufficient amount of the Payment ($1.00after reduction pursuant to clause (x) of Section 9(g)(i)) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y), Employee shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.