Gross-Up Payments. In the event that the payments or benefits (the “Severance Payments”) provided under this Section 5 are determined to be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code, the Company shall pay to the Executive additional amounts (the “Gross-Up Payments”) such that the net amount retained by the Executive, after deduction of any Excise Tax on the Severance Payments and on the Gross-Up Payments and any federal, state and local income and FICA tax imposed on the Gross-Up Payments, shall be equal to the Severance Payments. For purposes of determining whether any of the Severance Payments will be subject to the Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Transfer of the Company or the termination of the Executive’s employment (whether pursuant to the terms of this Employment Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a Transfer of the Company or any person affiliated with the Company or such person) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company and acceptable to the Executive such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (ii) the amount of the Severance Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Severance Payments or (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i) above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive’s employment, 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, state and local income and FICA taxes imposed on the Gross-Up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax and/or a federal, state and local income and FICA tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive’s employment (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 payable with respect to such excess) at the time that the amount of such excess is finally determined. Gross-Up Payments shall be made on the day following the 6-month anniversary of the Executive’s Separation from Service or, if later, on the day following the transfer of the Company. For the purposes of this Section 5(e), the term “Transfer of the Company” means a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 280G(b)(2)(A)(i).
Appears in 6 contracts
Samples: Employment Agreement (Sovran Acquisition LTD Partnership), Employment Agreement (Sovran Self Storage Inc), Employment Agreement (Sovran Acquisition LTD Partnership)
Gross-Up Payments. In If the event that the payments or benefits (the “Severance Payments”) payment provided under this Section 5 are determined to be Agreement (the "Contract Payment") is subject to the tax (the “"Excise Tax”") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended ("Code"), the Company shall pay to Employee on or before the Executive fifth day following the date of termination, an additional amounts amount (the “"Gross-Up Payments”Payment") such that the net amount retained by the ExecutiveEmployee, after deduction of any Excise Tax on the Severance Contract Payment and such other Total Payments and on the Gross-Up Payments (as defined below) and any federal, federal and state and local income tax and FICA tax imposed on Excise Tax upon the Gross-Up Paymentspayment provided for by this Section, shall be equal to the Severance Contract Payment and such other Total Payments. For purposes of determining whether any of the Severance Payments payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive Employee in connection with a Transfer Change of the Control of Company or the Employee's termination of the Executive’s employment (employment, whether payable pursuant to the terms of this Employment Agreement or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a Transfer Change of the Control of Company or any person corporation affiliated (or which, as a result of the completion of a transaction causing a Change of Control, will become affiliated) with Company within the meaning of Section 1504 of the Code (together with the Company or such personContract Payment, the "Total Payments") shall be treated as “"parachute payments” " within the meaning of Section 280G(b)(2) of the Code, and all “"excess parachute payments” " within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company and acceptable to Employee, whose acceptance shall not be unreasonably withheld, the Executive such other payments or benefits Total Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code either in their entirety or in excess of the base amount within the meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (ii) the amount of the Severance Total Payments which that shall be treated as subject to the Excise Tax shall be equal to the lesser of (aA) the total amount of the Severance Total Payments or (bB) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i) ), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s 's independent auditors in accordance with the principles of Sections 280G(d)(3280G(b)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Employee 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 Employee's residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive’s Employee's employment, the Executive Employee 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, federal and state and local income and FICA taxes tax imposed on the Gross-Up Payment being repaid by the Executive Employee if such repayment results in a reduction in Excise Tax and/or a federal, federal state and local income and FICA tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B1274(d) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive’s Employee's employment (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 grossGross-up payment Up Payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess is finally determined. Gross-Up Payments shall be made on the day following the 6-month anniversary of the Executive’s Separation from Service or, if later, on the day following the transfer of the Company. For the purposes of this Section 5(e), the term “Transfer of the Company” means a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 280G(b)(2)(A)(i).
Appears in 6 contracts
Samples: Executive Employment Agreement (Duratek Inc), Executive Employment Agreement (Duratek Inc), Executive Employment Agreement (Duratek Inc)
Gross-Up Payments. In If the event that the payments or benefits payment provided under Section 14 of this Agreement (the “Severance PaymentsContract Payment”) provided under this Section 5 are determined to be is subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (“Code”), the Company shall pay to the Executive on or before the fifth day following the date of termination, an additional amounts amount (the “Gross-Up PaymentsPayment”) such that the net amount retained by the Executive, after deduction of any Excise Tax on the Severance Contract Payment and such other Total Payments and on the Gross-Up Payments (as defined below) and any federal, federal and state and local income tax and FICA tax imposed on Excise Tax upon the Gross-Up Paymentspayment provided for by this Section, shall be equal to the Severance Contract Payment and such other Total Payments. For purposes of determining whether any of the Severance Payments payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Transfer Change of Control of the Company or the Executive’s termination of the Executive’s employment (employment, whether payable pursuant to the terms of this Employment Agreement or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a Transfer Change of Control of the Company or any person corporation affiliated (or which, as a result of the completion of a transaction causing a Change of Control, will become affiliated) with the Company or such personwithin the meaning of Section 1504 of the Code (together with the Contract Payment, the “Total Payments”) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company and acceptable to the Executive such other payments or benefits Executive, whose acceptance shall not be unreasonably withheld, the Total Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code either in their entirety or in excess of the base amount within the meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (ii) the amount of the Severance Total Payments which that shall be treated as subject to the Excise Tax shall be equal to the lesser of (aA) the total amount of the Severance Total Payments or (bB) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i) ), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3280G(b)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the 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 the Executive’s residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive’s employment, 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, federal and state and local income and FICA taxes tax imposed on the Gross-Up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax and/or a federal, federal state and local income and FICA tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B1274(d) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive’s employment (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 grossGross-up payment Up Payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess is finally determined. Gross-Up Payments shall be made on the day following the 6-month anniversary of the Executive’s Separation from Service or, if later, on the day following the transfer of the Company. For the purposes of this Section 5(e), the term “Transfer of the Company” means a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 280G(b)(2)(A)(i).
Appears in 3 contracts
Samples: Executive Employment Agreement (Under Armour, Inc.), Executive Employment Agreement (Under Armour, Inc.), Executive Employment Agreement (Under Armour, Inc.)
Gross-Up Payments. In the event that the payments or benefits (the “Severance Payments”) provided under this Section 5 are determined to be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code, the Company shall pay to the Executive additional amounts (the “Gross-Up Payments”) such that the net amount retained by the Executive, after deduction of If any Excise Tax on the Severance Payments and on the Gross-Up Payments and any federal, state and local income and FICA tax imposed on the Gross-Up Payments, shall be equal to the Severance Payments. For purposes of determining whether any of the Severance Payments will be subject to the Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Transfer of the Company or the termination of the Executive’s employment (whether pursuant to the terms of this Employment Agreement or any other plan, arrangement plan or agreement with the Company, any person whose actions result results in a Transfer of the Company Change in Control or any person affiliated with the Company or such person) shall be treated as (such payments or benefits, excluding the Gross-Up Payment, the “parachute payments” within Total Payments”) are determined to result in the meaning imposition of Section 280G(b)(2) excise tax under section 4999 of the CodeCode or any similar excise tax under the Code or under state or local statute the “Excise Tax”), the Company shall pay Executive an additional amount (such amount in the aggregate, the “Gross-Up Amount,” and each payment thereof, or all such payments together, the “excess parachute payments” within Gross-Up Payment”) intended to compensate or reimburse Executive for the meaning Excise Tax resulting from the Total Payments and for the federal, state and local income tax, employment tax and Excise Tax on the Gross-Up Payment. The purpose of Section 280G(b)(1this subsection 2.7(c) shall be treated as is to place Executive in the same economic position Executive would have been in had the Total Payments not been subject to the Excise Tax. For the purposes of this subsection 2.7(c):
(1) the Total Payments, unless in the opinion which will consist of tax counsel selected by the Company and acceptable to the Executive such other payments or benefits (in whole or in part) do not constitute those amounts as constituting “parachute payments, or such excess parachute payments ” (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4section 280G(b)(2) of the Code in excess of the base amount within the meaning of after giving effect to Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, 280G(b)(4)(A));
(ii) the amount of the Severance Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Severance Payments or (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i) above), and (iii2) the value of any non-cash benefits or any deferred payment or benefit to be taken into account in determining the Total Payments;
(3) the amount of the Total Payments to be treated as “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code, all reductions thereof for amounts representing “reasonable compensation for personal services” (within the meaning of section 280G(b)(4) of the Code) in excess of the “base amount” (within the meaning of section 280G(b)(3) of the Code) allocable to such “reasonable compensation for personal services” and all reductions by or for all such other amounts as are not subject to the Excise Tax;;
(4) the amount of the Excise Tax; and
(5) the Gross-Up Amount and each Gross-Up Payment with respect thereto (which Gross-Up Payment(s) in the aggregate, shall equal the Gross-Up Amount), shall be determined by the accounting firm which was the Company’s independent auditors auditor immediately prior to the Change in accordance with Control (the principles “Auditor”) which determinations shall be subject to approval by written legal opinion (which may be subject to and reflect assumptions, exceptions and standards of Sections 280G(d)(3certainly normal and reasonable for legal opinions of this type) of tax counsel (the “Tax Counsel”) selected by the Auditor and approved by Executive as acceptable, which approval of Tax Counsel by Executive shall be timely and not unreasonably withheld. A Gross-Up Payment shall be paid by the Company to Executive (or for Executive, if and to the extent the Gross-Up Payment is determined to be subject to tax withholding), by no later than the earlier of (i) each date as of which Excise Tax under Section 4999 of the Code is paid or is payable, whichever comes first; and (4ii) each date as of which any portion of the Total Payments resulting in the Excise Tax are paid or otherwise provided (excluding dates, but not the amounts of, Total Payments paid or provided other than on, as of or with respect to an event or time that properly constitutes a permissible payment event under Treas. Reg. §1.409A-3) so as to then become properly includable in Executive’s gross income for federal income tax purposes; provided, however, that notwithstanding any contrary provision hereof (other than Section 3.12 if applicable), if and to the extent that any amount owed by either party to the other hereunder constitutes a “reimbursement of expenses” within the meaning of Treas. Reg. §1.409A-3(i)(1)(iv) or a “tax gross-up payment” within the meaning of Treas. Reg. §1.409A-3(i)(1)(v), such amounts shall be paid by no later than the end of the taxable year of Executive following the taxable year of Executive in which the amount being reimbursed was paid by Executive. As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that the Gross-Up Amount and the aggregate of all Gross-Up Payments made as of any point in time as determined by the Auditor to be due to (or on behalf of) Executive will be lower than the Gross-Up Amount actually due (“Underpayment”). In the event that Executive thereafter is required to make a payment of any additional Excise Tax, the Auditor shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be paid by the Company to or for the benefit of Executive as an additional Gross-Up Payment, which shall be paid to or for Executive (as applicable) on the date the Excise Tax is paid or payable by Executive (whichever comes first), or as soon thereafter as the calculation of the amount of such additional Gross-Up Payment shall be administratively practicable, but in all events, no later than the end of Executive’s taxable year next following Executive’s taxable year in which the related taxes are remitted to the taxing authority. In the event that the Excise Tax is subsequently finally determined to be less than the amount taken into account hereunder at in calculating the time of termination of Gross-Up Amount and the Executive’s employmentGross-Up Payments paid, the Executive shall repay to the Company at Company, within ten (10) business days following the time that the amount of such reduction in the Excise Tax is finally determined determined, the portion of the Gross-Up Payment attributable to such reduction (plus the that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income and FICA employment taxes imposed on the Gross-Up Payment benefit being repaid by Executive, to the Executive if extent that such repayment results in a reduction in the Excise Tax and/or and a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federal, state and local income and FICA tax deduction) employment taxes), plus interest on the amount of such repayment at 120 percent of the rate provided in Section section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at in calculating the time of the termination of the Executive’s employment Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the payment of the Gross-Up Payment), the Company shall make an additional grossGross-up payment Up Payment in respect of such excess (plus any interest interest, penalties or additions payable by Executive with respect to such excess) at within five (5) business days following the time that the amount of such excess is finally determined. , but no later than the end of the calendar year following the calendar year in which the taxes related to the additional Gross-Up Payments Payment are remitted. Executive and the Company shall be made on each reasonably cooperate with the day following other relative to any administrative or judicial proceedings concerning the 6-month anniversary existence or amount of liability for the Excise Tax. Executive’s Separation from Service or, if later, on right to receive the day following the transfer of the Company. For the purposes of Gross-Up Payment provided for in this Section 5(e2.7(c), the term “Transfer of the Company” means shall expire and terminate if a change Change in the ownership Control has not occurred on or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 280G(b)(2)(A)(i)before April 23, 2013.
Appears in 1 contract
Gross-Up Payments. In the event that the payments or benefits (the “Severance Payments”) provided under this Section 5 are determined to be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code, the Company shall pay to the Executive additional amounts (the “Gross-Up Payments”) such that the net amount retained by the Executive, after deduction of If any Excise Tax on the Severance Payments and on the Gross-Up Payments and any federal, state and local income and FICA tax imposed on the Gross-Up Payments, shall be equal to the Severance Payments. For purposes of determining whether any of the Severance Payments will be subject to the Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Transfer of the Company or the termination of the Executive’s employment (whether pursuant to the terms of this Employment Agreement or any other plan, arrangement plan or agreement with the Company, any person whose actions result results in a Transfer of the Company Change in Control or any person affiliated with the Company or such person) shall be treated as (such payments or benefits, excluding the Gross-Up Payment, the “parachute payments” within Total Payments”) are determined to result in the meaning imposition of Section 280G(b)(2) excise tax under section 4999 of the CodeCode or any similar excise tax under the Code or under state or local statute the “Excise Tax”), the Company shall pay Executive an additional amount (such amount in the aggregate, the “Gross-Up Amount,” and each payment thereof, or all such payments together, the “excess parachute payments” within Gross-Up Payment”) intended to compensate or reimburse Executive for the meaning Excise Tax resulting from the Total Payments and for the federal, state and local income tax, employment tax and Excise Tax on the Gross-Up Payment. The purpose of Section 280G(b)(1this subsection 2.7(c) shall be treated as is to place Executive in the same economic position Executive would have been in had the Total Payments not been subject to the Excise Tax. For the purposes of this subsection 2.7(c):
(1) the Total Payments, unless in the opinion which will consist of tax counsel selected by the Company and acceptable to the Executive such other payments or benefits (in whole or in part) do not constitute those amounts as constituting “parachute payments, or such excess parachute payments ” (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4section 280G(b)(2) of the Code in excess of the base amount within the meaning of after giving effect to Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, 280G(b)(4)(A));
(ii) the amount of the Severance Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Severance Payments or (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i) above), and (iii2) the value of any non-cash benefits or any deferred payment or benefit to be taken into account in determining the Total Payments;
(3) the amount of the Total Payments to be treated as “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code, all reductions thereof for amounts representing “reasonable compensation for personal services” (within the meaning of section 280G(b)(4) of the Code) in excess of the “base amount” (within the meaning of section 280G(b)(3) of the Code) allocable to such “reasonable compensation for personal services” and all reductions by or for all such other amounts as are not subject to the Excise Tax;
(4) the amount of the Excise Tax; and
(5) the Gross-Up Amount and each Gross-Up Payment with respect thereto (which Gross-Up Payment(s) in the aggregate, shall equal the Gross-Up Amount), shall be determined by the accounting firm which was the Company’s independent auditors auditor immediately prior to the Change in accordance with Control (the principles “Auditor”) which determinations shall be subject to approval by written legal opinion (which may be subject to and reflect assumptions, exceptions and standards of Sections 280G(d)(3certainly normal and reasonable for legal opinions of this type) of tax counsel (the “Tax Counsel”) selected by the Auditor and approved by Executive as acceptable, which approval of Tax Counsel by Executive shall be timely and not unreasonably withheld. A Gross-Up Payment shall be paid by the Company to Executive (or for Executive, if and to the extent the Gross-Up Payment is determined to be subject to tax withholding), by no later than the earlier of (i) each date as of which Excise Tax under Section 4999 of the Code is paid or is payable, whichever comes first; and (4ii) each date as of which any portion of the Total Payments resulting in the Excise Tax are paid or otherwise provided (excluding dates, but not the amounts of, Total Payments paid or provided other than on, as of or with respect to an event or time that properly constitutes a permissible payment event under Treas. Reg. §1.409A-3) so as to then become properly includable in Executive’s gross income for federal income tax purposes; provided, however, that notwithstanding any contrary provision hereof (other than Section 3.12 if applicable), if and to the extent that any amount owed by either party to the other hereunder constitutes a “reimbursement of expenses” within the meaning of Treas. Reg. §1.409A-3(i)(1)(iv) or a “tax gross-up payment” within the meaning of Treas. Reg. §1.409A-3(i)(1)(v), such amounts shall be paid by no later than the end of the taxable year of Executive following the taxable year of Executive in which the amount being reimbursed was paid by Executive. As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that the Gross-Up Amount and the aggregate of all Gross-Up Payments made as of any point in time as determined by the Auditor to be due to (or on behalf of) Executive will be lower than the Gross-Up Amount actually due (“Underpayment”). In the event that Executive thereafter is required to make a payment of any additional Excise Tax, the Auditor shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be paid by the Company to or for the benefit of Executive as an additional Gross-Up Payment, which shall be paid to or for Executive (as applicable) on the date the Excise Tax is paid or payable by Executive (whichever comes first), or as soon thereafter as the calculation of the amount of such additional Gross-Up Payment shall be administratively practicable, but in all events, no later than the end of Executive’s taxable year next following Executive’s taxable year in which the related taxes are remitted to the taxing authority. In the event that the Excise Tax is subsequently finally determined to be less than the amount taken into account hereunder at in calculating the time of termination of Gross-Up Amount and the Executive’s employmentGross-Up Payments paid, the Executive shall repay to the Company at Company, within ten (10) business days following the time that the amount of such reduction in the Excise Tax is finally determined determined, the portion of the Gross-Up Payment attributable to such reduction (plus the that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income and FICA employment taxes imposed on the Gross-Up Payment benefit being repaid by Executive, to the Executive if extent that such repayment results in a reduction in the Excise Tax and/or and a dollar-for-dollar reduction in Executive’s taxable income and wages for purposes of federal, state and local income and FICA tax deduction) employment taxes), plus interest on the amount of such repayment at 120 percent of the rate provided in Section section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at in calculating the time of the termination of the Executive’s employment Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the payment of the Gross-Up Payment), the Company shall make an additional grossGross-up payment Up Payment in respect of such excess (plus any interest interest, penalties or additions payable by Executive with respect to such excess) at within five (5) business days following the time that the amount of such excess is finally determined. , but no later than the end of the calendar year following the calendar year in which the taxes related to the additional Gross-Up Payments Payment are remitted. Executive and the Company shall be made on each reasonably cooperate with the day following other relative to any administrative or judicial proceedings concerning the 6-month anniversary existence or amount of liability for the Excise Tax. Executive’s Separation from Service or, if later, on right to receive the day following the transfer of the Company. For the purposes of Gross-Up Payment provided for in this Section 5(e2.7(c), the term “Transfer of the Company” means shall expire and terminate if a change Change in the ownership Control has not occurred on or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 280G(b)(2)(A)(i)before April 23, 2013.
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Gross-Up Payments. In If the event that the payments or benefits payment provided under Section 14 of this Agreement (the “Severance PaymentsContract Payment”) provided under this Section 5 are determined to be is subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (“Code”), the Company shall pay to the Executive on or before the fifth day following the date of termination, an additional amounts amount (the “Gross-Up PaymentsPayment”) such that the net amount retained by the Executive, after deduction of any Excise Tax on the Severance Contract Payment and such other Total Payments and on the Gross-Up Payments (as defined below) and any federal, federal and state and local income tax and FICA tax imposed on Excise Tax upon the Gross-Up Paymentspayment provided for by this Section, shall be equal to the Severance Contract Payment and such other Total Payments. For purposes of determining whether any of the Severance Payments payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by the Executive in connection with a Transfer Change of Control of the Company or the Executive’s termination of the Executive’s employment (employment, whether payable pursuant to the terms of this Employment Agreement or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a Transfer Change of Control of the Company or any person corporation affiliated (or which, as a result of the completion of a transaction causing a Change of Control, will become affiliated) with the Company or such personwithin the meaning of Section 1504 of the Code (together with the Contract Payment, the “Total Payments”) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company and acceptable to the Executive such other payments or benefits Executive, whose acceptance shall not be unreasonably withheld, the Total Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (ii) the amount of the Severance Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (a) the total amount of the Severance Payments or (b) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i) above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive’s employment, 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, state and local income and FICA taxes imposed on the Gross-Up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax and/or a federal, state and local income and FICA tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive’s employment (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 payable with respect to such excess) at the time that the amount of such excess is finally determined. Gross-Up Payments shall be made on the day following the 6-month anniversary of the Executive’s Separation from Service or, if later, on the day following the transfer of the Company. For the purposes of this Section 5(e), the term “Transfer of the Company” means a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 280G(b)(2)(A)(i).in
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Samples: Executive Employment Agreement (Under Armour, Inc.)
