Gross-Up Payments. If any payment or the value of any benefit received or to be received by the Executive in connection with the Executive’s termination or contingent upon a Change of Control of the Company (whether received or to be received pursuant to the terms of this Agreement (the “Agreement Payments”) or of any other plan, arrangement, or agreement of the Company, its successors, any person whose actions result in a Change of Control of the Company, or any person affiliated with any of them (or which, as a result of the completion of the transactions causing a Change of Control, will become affiliated with any of them (“Other Payments” and, together with the Agreement Payments, the “Payments”)) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) or any comparable federal, state, or local excise tax (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), as determined as provided below, the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount the Executive retains, after deduction of the Excise Tax on Agreement Payments and Other Payments and any federal, state, and local income tax and Excise Tax upon the payment provided for by Section 8 hereof, and any interest, penalties, or additions to tax payable by the Executive with respect thereto shall be equal to the total present value of the Agreement Payments and Other Payments at the time such Payments are to be made. The intent of the parties is that the Company shall be solely responsible for and shall pay, any Excise Tax on any Payments and Gross-Up Payment and any income and employment taxes (including, without limitation, penalties and interest) imposed on any Gross-Up Payments as well as any loss of deduction caused by the Gross-Up Payment.
Appears in 2 contracts
Samples: Employment Agreement (USA Mobility, Inc), Employment Agreement (USA Mobility, Inc)
Gross-Up Payments. If (i) In the event that any payment or the value of any benefit received or to be received by the Executive in connection with the Executive’s termination 's Termination or contingent upon a Change of Control of the Company (whether received or to be received pursuant to the terms of this Agreement (the “"Agreement Payments”") or of any other plan, arrangement, arrangement or agreement of the Company, its successors, any person whose actions result in a Change of Control of the Company, Company or any person affiliated with any of them (or which, as a result of the completion of the transactions causing a Change of Control, will become affiliated with any of them them) (“"Other Payments” " and, together with the Agreement Payments, the “"Payments”")) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax "Code”") or any comparable federal, state, state or local excise tax (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), as determined as provided below, the Company shall pay to the Executive an additional amount (the “"Gross-Up Payment”") such that the net amount retained by the Executive retainsExecutive, after deduction of the Excise Tax on Agreement Payments and Other Payments and any federal, state, state and local income tax and Excise Tax upon the payment provided for by Section 8 hereofthis Subsection IV(e)(i), and any interest, penalties, penalties or additions to tax payable by the Executive with respect thereto shall be equal to the total present value of the Agreement Payments and Other Payments at the time such Payments are to be made. The intent of the parties is that the Company shall be solely responsible for and shall pay, any Excise Tax on any Payments and Gross-Up Payment and any income and employment taxes (including, without limitation, penalties and interest) imposed on any Gross-Up Payments as well as any loss of deduction caused by the Gross-Up Payment.
(ii) All determinations required to be made under this Subsection IV(e), including, without limitation, whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determinations, shall be made by tax counsel selected by the Company and reasonably acceptable to the Executive ("Tax Counsel"). The Company shall cause the Tax Counsel to provide detailed supporting calculations to the Company and the Executive within fifteen (15) business days after notice is given by the Executive to the Company that any or all of the Payments have occurred, or such earlier time as is requested by the Company. Within two (2) business days after such notice is given to the Company, the Company shall instruct the Tax Counsel to timely provide the data required by this Subsection IV(e) to the Executive. All fees and expenses of the Tax Counsel shall be paid solely by the Company. Any Excise Tax as determined pursuant to this Subsection IV(e) shall be paid by the Company to the Internal Revenue Service and/or other appropriate taxing authority on the Executive's behalf within five (5) days after receipt of the Tax Counsel's determination. If the Tax Counsel determines that there is substantial authority (within the meaning of Section 6662 of the Code) that no Excise Tax is payable by the Executive, the Tax Counsel shall furnish the Executive with a written opinion that failure to disclose or report the Excise Tax on the Executive's federal income tax return will not constitute a substantial understatement of tax or be reasonably likely to result in the imposition of a negligence or similar penalty. Any determination by the Tax Counsel shall be binding upon the Company and the Executive in the absence of material mathematical or legal error. As a result of the uncertainty in the application of Section 4999 of the Code at the time the initial determination by the Tax Counsel hereunder, it is possible that Gross-Up Payments will not have been made by the Corporation that should have been made or that Gross-Up Payments have been made that should not have been made, in each case, consistent with the calculations required to be made hereunder. In the event the Company exhausts its remedies pursuant to Subsection IV(e)(iii) below and the Executive is thereafter required to make a payment of any Excise Tax, the Tax Counsel shall determine the amount of underpayment of Excise Taxes that has occurred and any such underpayment shall be promptly paid by the Company to the Internal Revenue Service or other appropriate taxing authority on the Executive's behalf or, if such underpayment has been previously paid by the Executive, to the Executive. In the event that the Tax Counsel determines that an overpayment of Gross-Up Payments has occurred, any such overpayment shall be treated for all purposes as a loan to the Executive with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code, due and payable within ninety (90) days after written demand to the Executive by the Company; provided, however, that the Executive shall have no duty or obligation whatsoever to repay such loan unless the Executive's receipt of the overpayment, or any portion thereof, is includible in the Executive's income and the Executive's repayment of the same is not deductible by the Executive for federal and state income tax purposes.
(iii) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service or state or local taxing authority, that, if successful, would result in any Excise Tax or an underpayment of Gross-Up Payments. Such notice shall be given as soon as practicable but no later than fifteen (15) business days after the Executive is informed in writing of the claim and shall inform the Company of the nature of the claim, the administrative or judicial appeal period, and the date on which any payment of the claim must be paid. The Executive shall not pay any portion of the claim prior to the expiration of the thirty (30) day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any amount under the claim is due). If the Company notifies the Executive in writing prior to the expiration of such thirty (30) day period that it desires to contest the claim, the Executive shall:
(A) give the Company any information reasonably requested by the Company relating to the claim;
(B) take such action in connection with contesting the claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation concerning the claim by an attorney selected by the Company who is reasonably acceptable to the Executive; and
(C) cooperate with the Company in good faith in order to effectively contest the claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including, without limitation, additional interest and penalties and attorneys' fees) incurred in such contests and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including, without limitation, interest and penalties thereon) imposed as a result of such representation. Without limitation upon the foregoing provisions of this Subsection IV(e)(iii), except as provided below, the Company shall control all proceedings concerning such contest and, in its sole opinion, may pursue or forego any and all administrative appeal, proceedings, hearings and conferences with the taxing authority pertaining to the claim. At the written request of the Company and upon payment to the Executive of an amount at least equal to the claim plus any additional amount necessary to obtain the jurisdiction of the appropriate tribunal and/or court, the Executive shall pay the same and xxx for a refund. The Executive agrees to prosecute any contest of a claim to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company requests the Executive to pay the claim and xxx for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless on an after-tax basis, from any Excise Tax or income tax (including, without limitation, interest and penalties thereon) imposed on such advance or for any imputed income on such advance. Any extension of the statute of limitations relating to assessment of any Excise Tax for the taxable year of the Executive which is the subject of the claim is to be limited solely to the claim. Furthermore, the Company's control of the contest shall be limited to issues for which a Gross-Up Payment would be payable hereunder. The Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(iv) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Subsection IV(e)(iii) above, the Executive receives any refund of a claim and/or any additional amount that was necessary to obtain jurisdiction, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Subsection IV(e)(iii) above, a determination is made that the Executive shall not be entitled to any refund of the claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund of a claim prior to the expiration of thirty (30) days after such determination, then the portion of such advance attributable to a claim shall be forgiven and shall not be required to be repaid. The amount of such advance attributable to a claim shall offset, to the extent thereof, the amount of the underpayment required to be paid by the Company to the Executive.
(v) If, after the advance by the Company of an additional amount necessary to obtain jurisdiction, there is a final determination made by the taxing authority that the Executive is not entitled to any refund of such amount, or any portion thereof, then such nonrefundable amount shall be repaid to the Company by the Executive within thirty (30) days after the Executive receives notice of such final determination. A final determination shall occur when the period to contest or otherwise appeal any decision by an administrative tribunal or court of initial jurisdiction has been waived or the time for contesting or appealing the same has expired.
Appears in 1 contract
Gross-Up Payments. If (i) In the event any payment payment(s) or the value of any benefit benefit(s) received or to be received by the Executive in connection with the Executive’s termination Termination or contingent upon a Change of Control of the Company (whether received or to be received pursuant to the terms of this Agreement (the “"Agreement Payments”") or of any other plan, arrangement, arrangement or agreement of the Company, its successors, any person whose actions result in a Change of Control of the CompanyControl, or any person affiliated with any of them (or which, as a result of the completion of the transactions transaction(s) causing a Change of Control, will become affiliated with any of them them) (“"Other Payments” " and, together with the Agreement Payments, the “"Payments”")) would ), are determined, under the provisions of Subsection IV(e)(ii), to be subject to the an excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) or any comparable federal, state, or local excise tax (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), as determined as provided belowin this Subsection IV(e), the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount the Executive retainsretained by Executive, after deduction of the Excise Tax on Agreement Payments and Other Payments and any federal, state, and local income and employment tax and Excise Tax payable by Executive upon the payment Payment(s) provided for by Section 8 hereofthis Subsection IV(e)(i), and any interest, penalties, penalties or additions to tax payable by the Executive with respect thereto shall be equal to the total present value of Excise Tax imposed on the Agreement Payments and Other Payments at (the time such Payments are to be made"Gross-Up Payment(s)"). The intent of the parties is that the Company shall be solely responsible for in full for, and shall pay, any and all Excise Tax on any Payments and Gross-Up Payment Payment(s) and any income and all excise and employment taxes (including, without limitation, penalties and interest) imposed on any Gross-Up Payments Payment(s) as well as any loss of deduction caused by or related to the Gross-Up Payment(s).
(ii) All determinations required to be made under this Subsection IV(e), including, without limitation, whether and when a Gross-Up Payment is required, and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determinations, unless otherwise set forth in this Agreement, shall be made by a nationally recognized certified public accounting firm selected by the Company and reasonably acceptable to Executive (the "Accounting Firm"). For purposes of determining the amount of any Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive’s residence on the Termination Date, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. The Company shall cause the Accounting Firm to provide detailed supporting calculations to the Company and Executive within fifteen (15) business days after notice is given by Executive to the Company that any or all of the Payments have occurred, or such earlier time as is requested by the Company. Within two (2) business days after such notice is given to the Company, the Company shall instruct the Accounting Firm to timely provide the data required by this Subsection IV(e)(ii) to Executive. All fees and expenses of the Accounting Firm shall be paid in full by the Company. Any Gross-Up Payment as determined pursuant to this Subsection IV(e)(ii) shall be paid by the Company to the Executive within five (5) business days after receipt of the Accounting Firm’s determination, net of applicable withholding taxes. If the Accounting Firm determines that there is substantial authority (within the meaning of Section 6662 of the Code) that no Excise Tax is payable by Executive, the Accounting Firm shall furnish Executive with a written opinion that failure to disclose or report the Excise Tax on Executive’s federal income tax return will not constitute a substantial understatement of tax or be reasonably likely to result in the imposition of a negligence or any other penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive in the absence of material mathematical or legal error. As a result of the uncertainty in the application of Section 4999 of the Code at the time the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments will not have been made by the Company that should have been made or that Gross-Up Payments will have been made that should not have been made, in each case, consistent with the calculations required to be made hereunder. In the event the Company exhausts its remedies pursuant to Subsection IV(e)(iii) below and Executive is thereafter required to make a payment of any Excise Tax or any interest, penalties or addition to tax related thereto, the Accounting Firm shall determine the amount of underpayment of Excise Taxes that has occurred and any such underpayment and interest, penalties or addition to tax shall be promptly paid by the Company to Executive along with such additional amounts described in Section (IV)(e)(i). In the event the Accounting Firm determines that an overpayment of Gross-Up Payment(s) has occurred, any such overpayment shall be treated for all purposes as a loan to Executive with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code, due and payable within ninety (90) days after written demand to Executive by the Company; provided, however, that Executive shall have no duty or obligation whatsoever to repay such loan if Executive’s receipt of the overpayment, or any portion thereof, is included in Executive’s income and Executive’s repayment of the same is not deductible by Executive for federal and state income tax purposes.
(iii) Executive shall notify the Company in writing of any claim of which Executive is aware by the Internal Revenue Service or state or local taxing authority, that, if successful, would result in any Excise Tax or an underpayment of any Gross-Up Payment(s). Such notice shall be given as soon as practicable but no later than fifteen (15) business days after Executive is informed in writing of the claim by the taxing authority and Executive shall provide written notice of the Company of the nature of the claim, the administrative or judicial appeal period, and the date on which any payment of the claim must be paid. Executive shall not pay any portion of the claim prior to the expiration of the thirty (30) day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any amount under the claim is due). If the Company notifies Executive in writing prior to the expiration of such thirty (30) day period that it desires to contest the claim, Executive shall: give the Company any information reasonably requested by the Company relating to the claim; take such action in connection with contesting the claim as the Company shall reasonably request in writing from time to time, including without limitation, accepting legal representation concerning the claim by an attorney selected by the Company who is reasonably acceptable to Executive; and cooperate with the Company in good faith in order to effectively contest the claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including, without limitation, additional interest and penalties and attorneys’ fees) incurred in such contests and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including, without limitation, interest and penalties thereon) imposed as a result of such representation. Without limitation upon the foregoing provisions of this Subsection IV(e)(iii), except as provided below, the Company shall control all proceedings concerning such contest and, in its sole opinion, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority pertaining to the claim. At the written request of the Company and upon payment to Executive of an amount at least equal to any amount necessary to obtain the jurisdiction of the appropriate taxing authority and xxx for a refund, Executive agrees to prosecute in cooperation with the Company any contest of a claim to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company requests Executive to pay the claim and xxx for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless on an after-tax basis, from any Excise Tax or income tax (including, without limitation, interest and penalties thereon) imposed on such advance or for any imputed income on such advance. Any extension of the statute of limitations relating to assessment of any Excise Tax for the taxable year of Executive which is the subject of the claim is to be limited solely to the claim. Furthermore, the Company’s control of the contest shall be limited to issues for which a Gross-Up Payment would be payable hereunder. Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(iv) If after the receipt by Executive of an amount advanced by the Company pursuant to Subsection IV(e)(iii) above, Executive receives any refund of a claim or any additional amount that was necessary to obtain jurisdiction, Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Subsection IV(e)(iii) above, a determination is made that Executive shall not be entitled to any refund of the claim, and the Company does not notify Executive in writing of its intent to contest such denial of refund of a claim prior to the expiration of thirty (30) calendar days after such determination, then the portion of such advance attributable to a claim shall be forgiven by the Company and shall not be required to be repaid by Executive. The amount of such advance attributable to a claim shall offset, to the extent thereof, the amount of the underpayment required to be paid by the Company to Executive.
Appears in 1 contract
Samples: Change of Control Employment Agreement (Energizer Holdings Inc)
Gross-Up Payments. (1) If any payment or the value of any benefit received or to be received by the Executive in connection with the Executive’s termination or contingent upon a Change of Control (as hereinafter defined) of the Company (whether received or to be received pursuant to the terms of this Agreement (the “Agreement Payments”) or of any other plan, arrangement, or agreement of the Company, its successors, any person whose actions result in a Change of Control of the Company, or any person affiliated with any of them (or which, as a result of the completion of the transactions causing a Change of Control, will become affiliated with any of them (“Other Payments” and, together with the Agreement Payments, the “Payments”)) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) or any comparable federal, state, or local excise tax (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), as determined as provided below, the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount the Executive retains, after deduction of the Excise Tax on Agreement Payments and Other Payments and any federal, state, and local income income, payroll and/or employment tax and Excise Tax upon the payment provided for by Section 8 hereof, and any interest, penalties, or additions to tax payable by the Executive with respect thereto shall be equal to the total present value of the Agreement Payments and Other Payments at the time such Payments are to be made. The intent of the parties is that the Company shall be solely responsible for and shall pay, any Excise Tax on any Payments and any Gross-Up Payment and any income and income, payroll and/or employment taxes (including, without limitation, penalties and interest) imposed on any Gross-Up Payments as well as any loss of deduction caused by the Gross-Up Payment.
(2) All determinations required to be made under this Section 8(e)(vi), including, without limitation, whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determinations, shall be made by tax counsel (either a law firm or a nationally recognized public accounting firm) selected by the Company and reasonably acceptable to the Executive (“Tax Counsel”). The Company shall cause the Tax Counsel to provide detailed supporting calculations to the Company and the Executive within fifteen (15) business days after notice is given by the Executive to the Company that any or all of the Payments have occurred, or such earlier time as is requested by the Company. Within two (2) business days after such notice is given to the Company, the Company shall instruct the Tax Counsel to timely provide the data required by this Section 8(e)(viii) to the Executive. The Company shall pay all fees and expenses of the Tax Counsel. The Company shall pay any Excise Tax determined pursuant to this Section 8(e)(viii) to the Internal Revenue Service (the “IRS”) and/or other appropriate taxing authority on behalf of the Executive within five (5) days after receipt of the Tax Counsel’s determination. If the Tax Counsel determines that there is substantial authority (within the meaning of Section 6662 of the Tax Code) that no Excise Tax is payable by the Executive, the Tax Counsel shall furnish the Executive with a written opinion that the failure to disclose or report the Excise Tax on the Executive’s federal income tax return will not constitute a substantial understatement of tax or be reasonably likely to result in the imposition of a negligence or similar penalty. Any determination by the Tax Counsel shall be binding upon the Company and the Executive in the absence of material mathematical or legal error. As a result of the uncertainty in the application of Section 4999 of the Tax Code at the time of the initial determination by the Tax Counsel hereunder, it is possible that the Company will not have made Gross-Up Payments that should have been made or that it will have made Gross-Up Payments that should not have been made, in each case, consistent with the calculations required to be made hereunder. If the Company exhausts its remedies pursuant to Section 8(e)(viii)(3) below and the Executive is thereafter required to pay an Excise Tax, the Tax Counsel shall determine the amount of underpayment of Excise Taxes that has occurred and the Company shall promptly pay any such underpayment to the IRS or other appropriate taxing authority on the Executive’s behalf or, if the Executive has previously paid such underpayment, to the Executive. Such payment shall in all events be paid within ninety (90) days after the Tax Counsel determines that a payment is required. If the Tax Counsel determines that an overpayment of Gross-Up Payments has occurred, any such overpayment shall be treated for all purposes as a loan to the Executive with interest at the applicable federal rate provided in Section 7872(f)(2) of the Tax Code, due and payable within ninety (90) days after written demand to the Executive by the Company; provided, however, that the Executive shall have no duty or obligation whatsoever to repay such loan if the Executive’s receipt of the overpayment, or any portion thereof, is includible in the Executive’s income and the Executive’s repayment of the same is not deductible by the Executive for federal and state income tax purposes.
(3) The Executive shall notify the Company, in writing of any claim by the IRS or state or local taxing authority, that, if successful, would result in any Excise Tax or an underpayment of Gross-Up Payments. Such notice shall be given as soon as practicable but no later than fifteen (15) business days after the Executive is informed in writing of the claim and shall inform the Company of the nature of the claim, the administrative or judicial appeal period, and the date on which any payment of the claim must be paid. The Executive shall not pay any portion of the claim before the expiration of the thirty (30) day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any amount under the claim is due). If the Company notifies the Executive in writing before the expiration of such thirty (30) day period that it desires to contest the claim, the Executive shall:
(A) give the Company any information reasonably requested by the Company relating to the claim;
(B) take such action in connection with contesting the claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation concerning the claim by an attorney selected by the Company who is reasonably acceptable to the Executive; and
(C) cooperate with the Company in good faith in order to effectively contest the claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including, without limitation, additional interest and penalties and attorneys’ fees) incurred in such contests and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including, without limitation, interest and penalties thereon) imposed as a result of such representation. Without limitation upon the foregoing provisions of this Section 8(e)(viii)(3)(C), except as provided below, the Company shall control all proceedings concerning such contest and, in its sole opinion, may pursue or forgo any and all administrative appeal, proceedings, hearings and conferences with the taxing authority pertaining to the claim. At the Company’s written request and upon payment to the Executive of an amount at least equal to the claim plus any additional amount necessary to obtain the jurisdiction of the appropriate tribunal and/or court, the Executive shall pay the same and xxx for a refund. The Executive agrees to prosecute any contest of a claim to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company requests the Executive to pay the claim and xxx for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless on an after-tax basis, from any Excise Tax or income tax (including, without limitation, interest and penalties thereon) imposed on such advance or for any imputed income on such advance. Any extension of the statute of limitations relating to the assessment of any Excise Tax for the taxable year of the Executive that is subject of the claim is to be limited solely to the claim. Furthermore, the Company’s control of the contest shall be limited to the issues for which a Gross-Up Payment would be payable hereunder. The Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the IRS or any other taxing authority.
(4) If, after the Executive receives an amount the Company advanced pursuant to Section 8(e)(vii)(3) above, the Executive receives any refund of a claim and/or any additional amount that was necessary to obtain jurisdiction, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the Executive receives an amount the Company advanced pursuant to Section 8(e)(vii)(3) above, a determination is made that the Executive shall not be entitled to any refund of the claim, and the Company does not notify the Executive in writing of its intent to contest such denial or refund of a claim before the expiration of the thirty (30) days after such determination, then the portion of such advance attributable to a claim shall be forgiven and shall not be required to be repaid. The amount of such advance attributable to a claim shall offset, to the extent thereof, the amount of the underpayment required to be paid by the Company to the Executive.
(5) If, after the Company advances an additional amount necessary to obtain jurisdiction, there is a final determination made by the taxing authority that the Executive is not entitled to any refund of such amount, or any portion thereof, then the Executive shall repay such nonrefundable amount to the Company within thirty (30) days after the Executive receives notice of such final determination. A final determination shall occur when the period to contest or otherwise appeal any decision by an administrative tribunal or court of initial jurisdiction has been waived or the time for contesting or appealing the same has expired.
Appears in 1 contract
Gross-Up Payments. (i) If any payment or the value of any benefit received or to be received by the Executive in connection with the Executive’s termination 's Termination or contingent upon a Change of Control of the Company (whether received or to be received pursuant to the terms of this Agreement (the “"Agreement Payments”") or of any other plan, arrangement, or agreement of the Company, its successors, any person whose actions result in a Change of Control of the Company, or any person affiliated with any of them (or which, as a result of the completion of the transactions causing a Change of Control, will become affiliated with any of them (“"Other Payments” " and, together with the Agreement Payments, the “"Payments”")) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) or any comparable federal, state, or local excise tax (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), as determined as provided below, the Company shall pay to the Executive an additional amount (the “"Gross-Up Payment”") such that the net amount the Executive retains, after deduction of the Excise Tax on Agreement Payments and Other Payments and any federal, state, and local income tax and Excise Tax upon the payment provided for by this Section 8 hereof4(f)(i), and any interest, penalties, or additions to tax payable by the Executive with respect thereto shall be equal to the total present value of the Agreement Payments and Other Payments at the time such Payments are to be made. The intent of the parties is that the Company shall Company
(ii) All determinations required to be solely responsible for made under this Section 4(f), including, without limitation, whether and shall pay, any Excise Tax on any Payments when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determinations, shall be made by tax counsel (either a law firm or a nationally recognized public accounting firm) selected by the Company and reasonably acceptable to the Executive ("Tax Counsel"). The Company shall cause the Tax Counsel to provide detailed supporting calculations to the Company and the Executive within fifteen (15) business days after notice is given by the Executive to the Company that any or all of the Payments have occurred, or such earlier time as is requested by the Company. Within two (2) business days after such notice is given to the Company, the Company shall instruct the Tax Counsel to timely provide the data required by this Section 4(f) to the Executive. The Company shall pay all fees and expenses of the Tax Counsel. The Company shall pay any Excise Tax determined pursuant to this Section 4(f) to the Internal Revenue Service ("IRS") and/or other appropriate taxing authority on the Executive's behalf within five (5) days after receipt of the Tax Counsel's determination. If the Tax Counsel determines that there is substantial authority (within the meaning of Section 6662 of the Code) that no Excise Tax is payable by the Executive, the Tax Counsel shall furnish the Executive with a written opinion that failure to disclose or report the Excise Tax on the Executive's federal income tax return will not constitute a substantial understatement of tax or be reasonably likely to result in the imposition of a negligence or similar penalty. Any determination by the Tax Counsel shall be binding upon the Company and employment taxes the Executive in the absence of material mathematical or legal error. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Tax Counsel hereunder, it is possible that the Company will not have made Gross-Up Payments that should have been made or that it will have made Gross-Up Payments that should not have been made, in each case, consistent with the calculations required to be made hereunder. If the Company exhausts its remedies pursuant to Section 4(f)(iii) below and the Executive is thereafter required to pay any Excise Tax, the Tax Counsel shall determine the amount of underpayment of Excise Taxes that has occurred and the Company shall promptly pay any such underpayment to the IRS or
(iii) The Executive shall notify the Company in writing of any claim by the IRS or state or local taxing authority, that, if successful, would result in any Excise Tax or an underpayment of Gross-Up Payments. Such notice shall be given as soon as practicable but no later than fifteen (15) business days after the Executive is informed in writing of the claim and shall inform the Company of the nature of the claim, the administrative or judicial appeal period, and the date on which any payment of the claim must be paid. The Executive shall not pay any portion of the claim before the expiration of the thirty (30) day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any amount under the claim is due). If the Company notifies the Executive in writing before the expiration of such thirty (30) day period that it desires to contest the claim, the Executive shall:
(A) give the Company any information reasonably requested by the Company relating to the claim;
(B) take such action in connection with contesting the claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation concerning the claim by an attorney selected by the Company who is reasonably acceptable to the Executive; and
(C) cooperate with the Company in good faith in order to effectively contest the claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including, without limitation, additional interest and penalties and interestattorneys' fees) imposed incurred in such contests and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Gross-Up Payments as well as Excise Tax or income tax (including, without limitation, interest and penalties
(iv) If, after the Executive receives an amount the Company advanced pursuant to Section 4(f)(iii) above, the Executive receives any loss refund of deduction caused a claim and/or any additional amount that was necessary to obtain jurisdiction, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the Executive receives an amount the Company advanced pursuant to Section 4(f)(iii) above, a determination is made that the Executive shall not be entitled to any refund of the claim, and the Company does not notify the Executive in writing of its intent to contest such denial of refund of a claim before the expiration of thirty (30) days after such determination, then the portion of such advance attributable to a claim shall be forgiven and shall not be required to be repaid. The amount of such advance attributable to a claim shall offset, to the extent thereof, the amount of the underpayment required to be paid by the Gross-Up PaymentCompany to the Executive.
(v) If, after the Company advances an additional amount necessary to obtain jurisdiction, there is a final determination made by the taxing authority that the Executive is not entitled to any refund of such amount, or any portion thereof, then the Executive shall repay such nonrefundable amount to the Company within thirty (30) days after the Executive receives notice of such final determination. A final determination shall occur when the period to contest or otherwise appeal any decision by an administrative tribunal or court of initial jurisdiction has been waived or the time for contesting or appealing the same has expired.
Appears in 1 contract
Gross-Up Payments. If (i) In the event any payment payment(s) or the value of any benefit benefit(s) received or to be received by the Executive in connection with the Executive’s termination 's Termination or contingent upon a Change of Control of the Company (whether received or to be received pursuant to the terms of this Amended Agreement (the “"Agreement Payments”") or of any other plan, arrangement, arrangement or agreement of the Company, its successors, any person whose actions result in a Change of Control of the CompanyControl, or any person affiliated with any of them (or which, as a result of the completion of the transactions transaction(s) causing a Change of Control, will become affiliated with any of them them) (“"Other Payments” " and, together with the Agreement Payments, the “"Payments”")) would ), are determined, under the provisions of Subsection IV(e)(ii), to be subject to the an excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) or any comparable federal, state, or local excise tax (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), as determined as provided belowin this Subsection IV(e), the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount the Executive retainsretained by Executive, after deduction of the Excise Tax on Agreement Payments and Other Payments and any federal, state, and local income and employment tax and Excise Tax payable by Executive upon the payment Payment(s) provided for by Section 8 hereofthis Subsection IV(e)(i), and any interest, penalties, penalties or additions to tax payable by the Executive with respect thereto shall be equal to the total present value of Excise Tax imposed on the Agreement Payments and Other Payments at (the time such Payments are to be made"Gross-Up Payment(s)"). The intent of the parties is that the Company shall be solely responsible for in full for, and shall pay, any and all Excise Tax on any Payments and Gross-Up Payment Payment(s) and any income and all excise and employment taxes (including, without limitation, penalties and interest) imposed on any Gross-Up Payments Payment(s) as well as any loss of deduction caused by or related to the Gross-Up Payment(s).
(ii) All determinations required to be made under this Subsection IV(e), including, without limitation, whether and when a Gross-Up Payment is required, and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determinations, unless otherwise set forth in this Amended Agreement, shall be made by a nationally recognized certified public accounting firm selected by the Company and reasonably acceptable to Executive (the "Accounting Firm"). For purposes of determining the amount of any Gross-Up Payment., Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the Termination Date, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. The Company shall cause the Accounting Firm to provide detailed supporting calculations to the Company and Executive within fifteen (15) business days after notice is given by Executive to the Company that any or all of the Payments have occurred, or such earlier time as is requested by the Company. Within two (2) business days after such notice is given to the Company, the Company shall instruct the Accounting Firm to timely provide the data required by this Subsection IV(e)(ii)
Appears in 1 contract
Samples: Change of Control Employment Agreement (Energizer Holdings Inc)
Gross-Up Payments. If (i) In the event any payment payment(s) or the value of any benefit benefit(s) received or to be received by the Executive in connection with the Executive’s termination 's Termination or contingent upon a Change of Control of the Company (whether received or to be received pursuant to the terms of this Agreement (the “"Agreement Payments”") or of any other plan, arrangement, arrangement or agreement of the Company, its successors, any person whose actions result in a Change of Control of the CompanyControl, or any person affiliated with any of them (or which, as a result of the completion of the transactions transaction(s) causing a Change of Control, will become affiliated with any of them them) (“"Other Payments” " and, together with the Agreement Payments, the “"Payments”")) would ), are determined, under the provisions of Subsection IV(e)(ii), to be subject to the an excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) or any comparable federal, state, or local excise tax (such excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), as determined as provided belowin this Subsection IV(e), the Company shall pay to the Executive an additional amount (the “Gross-Up Payment”) such that the net amount the Executive retainsretained by Executive, after deduction of the Excise Tax on Agreement Payments and Other Payments and any federal, state, and local income and employment tax and Excise Tax payable by Executive upon the payment Payment(s) provided for by Section 8 hereofthis Subsection IV(e)(i), and any interest, penalties, penalties or additions to tax payable by the Executive with respect thereto shall be equal to the total present value of Excise Tax imposed on the Agreement Payments and Other Payments at (the time such Payments are to be made"Gross-Up Payment(s)"). The intent of the parties is that the Company shall be solely responsible for in full for, and shall pay, any and all Excise Tax on any Payments and Gross-Up Payment Payment(s) and any income and all excise and employment taxes (including, without limitation, penalties and interest) imposed on any Gross-Up Payments Payment(s) as well as any loss of deduction caused by or related to the Gross-Up Payment(s).
(ii) All determinations required to be made under this Subsection IV(e), including, without limitation, whether and when a Gross-Up Payment is required, and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determinations, unless otherwise set forth in this Agreement, shall be made by a nationally recognized certified public accounting firm selected by the Company and reasonably acceptable to Executive (the "Accounting Firm"). For purposes of determining the amount of any Gross-Up Payment., Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the Termination Date, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. The Company shall cause the Accounting Firm to provide detailed supporting calculations to the Company and Executive within fifteen (15) business days after notice is given by Executive to the Company that any or all of the Payments have occurred, or such earlier time as is requested by the Company. Within two (2) business days after such notice is given to the Company, the Company shall instruct the Accounting Firm to timely provide the data required by this Subsection IV(e)(ii)
Appears in 1 contract
Samples: Change of Control Employment Agreement (Energizer Holdings Inc)
Gross-Up Payments. If In the event that any payment or the value of any benefit received or to be received by the Executive in connection with the Executive’s termination 's Termination or contingent upon a Change of Control of the Company (in Control, whether received or to be received pursuant to the terms of this Agreement (the “Agreement Payments”) or of any other plan, arrangement, arrangement or agreement of (the Company"Payments"), its successors, any person whose actions result in a Change of Control of the Company, or any person affiliated with any of them (or which, as a result of the completion of the transactions causing a Change of Control, will become affiliated with any of them (“Other Payments” and, together with the Agreement Payments, the “Payments”)) would be subject to the excise tax imposed by Code Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) or any comparable federal, state, state or local excise tax (such excise taxtaxes, together with any interest and penalties, are hereinafter collectively referred to as the “"Excise Tax”"), as determined as provided below, the Company shall pay to or for the benefit of the Executive an additional amount (the “"Gross-Up Payment”") such that the net amount retained by the Executive retainsExecutive, after deduction of the Excise Tax on Agreement Payments and Other the Payments and any federal, state, state and local income tax and Excise Tax upon the payment provided for by this Section 8 hereofVII, and any interest, penalties, penalties or additions to tax payable by the Executive with respect thereto thereto, shall be equal to the total present value of the Agreement Payments and Other Payments at the time such Payments are to be madePayments. The intent of the parties is that the Company shall be solely responsible for and shall pay, pay any Excise Tax on any Payments and the Gross-Up Payment and any income and employment taxes (including, without limitation, penalties and interest) imposed on any Gross-Up Payments as well as any loss of deduction caused by the Gross-Up Payment. Notwithstanding the immediately preceding paragraph, in the event that a reduction to the Payments in respect of the Executive of 5% or less, but in no event in excess of $500,000, would cause no Excise Tax to be payable, the Executive will not be entitled to a Gross-Up Payment and the Payments shall be reduced to the extent necessary so that the Payments shall not be subject to the Excise Tax. Unless the Executive shall have given prior written notice to the Company specifying a different order by which to effectuate the foregoing, the Company shall reduce or eliminate the Payments (x) by first reducing or eliminating the portion of the Payments which are not payable in cash (other than that portion of the Payments subject to clause (z) hereof), (y) then by reducing or eliminating cash payments (other than that portion of the Payments subject to clause (z) hereof) and (z) then by reducing or eliminating the portion of the Payments (whether payable in cash or not payable in cash) to which Treasury Regulation Section 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the date of the Change in Control. 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.
Appears in 1 contract
