Payment of Additional Benefits under Certain Circumstances. (a) If the payments and benefits pursuant to Section 5 hereof, either alone or together with other payments and benefits which the Executive has the right to receive from the Employers, would constitute a “parachute payment” as defined in Section 280G(b)(2) of the Code (the “Initial Parachute Payment”) and thus trigger an excise tax under Section 4999 of the Code, then the Bank shall pay to the Executive, in a lump sum within ten business days following the Date of Termination, a cash amount (the “Gross-Up Amount”) such that, after payment of all federal, state and local income and employment-related taxes (including Social Security and Medicare taxes, and reflecting the phase-out of deductions and the Executive=s ability to deduct certain of such taxes) and any additional excise tax under Section 4999 of the Code in respect of the Gross-Up Amount payment, the Executive shall be in the same after-tax position as if no excise tax had been imposed by Section 4999 of the Code on the Initial Parachute Payment. (b) Notwithstanding the foregoing, if it shall subsequently be determined in a final judicial determination or a final administrative settlement to which the Executive is a party that the initial Gross-Up Amount under Section 6(a) was either understated or overstated, then the Bank’s independent tax counsel or accountants shall determine the amount (the “Adjustment Amount”) which either the Executive must pay to the Bank or the Bank must pay to the Executive in order to put the Executive (or the Bank, as the case may be) in the same position the Executive (or the Bank, as the case may be) would have been if the actual Gross-Up Amount had been equal to the Gross-Up Amount initially paid. In determining the Adjustment Amount, the independent tax counsel or accountants shall take into account any and all taxes (including any penalties and interest) paid by or for the Executive or refunded to the Executive or for the Executive’s benefit. As soon as practicable after the Adjustment Amount has been so determined, and in no event more than thirty (30) days after the Adjustment Amount has been so determined, the Bank shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the Bank, as the case may be. (c) In each calendar year that the Executive receives payments of benefits under this Section 6, the Executive shall report on his state, local and federal income tax returns such information as is consistent with the determination made by the independent tax counsel or accountants of the Bank as described above. The Bank shall indemnify and hold the Executive harmless from any and all losses, costs and expenses (including without limitation, reasonable attorneys’ fees, interest, fines and penalties) which the Executive incurs as a result of so reporting such information, with such indemnification to be paid by the Bank to the Executive as soon as practicable and in any event no later than March 15 of the year immediately following the year in which the amount subject to indemnification was determined. The Executive shall promptly notify the Bank in writing whenever the Executive receives notice of the institution of a judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Section 6 is being reviewed or is in dispute. The Bank shall assume control at its expense over all legal and accounting matters pertaining to such federal tax treatment (except to the extent necessary or appropriate for the Executive to resolve any such proceeding with respect to any matter unrelated to amounts paid or payable pursuant to this Section 6) and the Executive shall cooperate fully with the Employers in any such proceeding. The Executive shall not enter into any compromise or settlement or otherwise prejudice any rights the Bank may have in connection therewith without the prior consent of the Bank. (d) Notwithstanding any other provision contained in this Agreement, if either (i) the time period for making any cash payment under this Section 6 commences in one calendar year and ends in the succeeding calendar year or (ii) in the event any payment under this Section 6 is made contingent upon the execution of a general release and the time period that the Executive has to consider the terms of such general release (including any revocation period under such release) commences in one calendar year and ends in the succeeding calendar year, then the payment shall not be paid until the succeeding calendar year.
Appears in 3 contracts
Samples: Employment Agreement (Alliance Bancorp, Inc. Of Pennsylvania), Employment Agreement (Alliance Bancorp, Inc. Of Pennsylvania), Employment Agreement (Alliance Bancorp, Inc. Of Pennsylvania)
Payment of Additional Benefits under Certain Circumstances. (a) If the payments and benefits pursuant to Section 5 hereof, either alone or together with other payments and benefits which the Executive has the right to receive from the Employers, would constitute a “parachute payment” as defined in Section 280G(b)(2) of the Code (the “Initial Parachute Payment”) and thus trigger an excise tax under Section 4999 of the Code, then the Bank shall pay to the Executive, in a lump sum within ten business days following the Date of Termination, a cash amount (the “Gross-Up Amount”) such that, after payment of all federal, state and local income and employment-related taxes (including Social Security and Medicare taxes, and reflecting the phase-out of deductions and the Executive=s ’s ability to deduct certain of such taxes) and any additional excise tax under Section 4999 of the Code in respect of the Gross-Up Amount payment, the Executive shall be in the same after-tax position as if no excise tax had been imposed by Section 4999 of the Code on the Initial Parachute Payment.
(b) Notwithstanding the foregoing, if it shall subsequently be determined in a final judicial determination or a final administrative settlement to which the Executive is a party that the initial Gross-Up Amount under Section 6(a) was either understated or overstated, then the Bank’s independent tax counsel or accountants shall determine the amount (the “Adjustment Amount”) which either the Executive must pay to the Bank or the Bank must pay to the Executive in order to put the Executive (or the Bank, as the case may be) in the same position the Executive (or the Bank, as the case may be) would have been if the actual Gross-Up Amount had been equal to the Gross-Up Amount initially paid. In determining the Adjustment Amount, the independent tax counsel or accountants shall take into account any and all taxes (including any penalties and interest) paid by or for the Executive or refunded to the Executive or for the Executive’s benefit. As soon as practicable after the Adjustment Amount has been so determined, and in no event more than thirty (30) days after the Adjustment Amount has been so determined, the Bank shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the Bank, as the case may be.
(c) In each calendar year that the Executive receives payments of benefits under this Section 6, the Executive shall report on his state, local and federal income tax returns such information as is consistent with the determination made by the independent tax counsel or accountants of the Bank as described above. The Bank shall indemnify and hold the Executive harmless from any and all losses, costs and expenses (including without limitation, reasonable attorneys’ fees, interest, fines and penalties) which the Executive incurs as a result of so reporting such information, with such indemnification to be paid by the Bank to the Executive as soon as practicable and in any event no later than March 15 of the year immediately following the year in which the amount subject to indemnification was determined. The Executive shall promptly notify the Bank in writing whenever the Executive receives notice of the institution of a judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Section 6 is being reviewed or is in dispute. The Bank shall assume control at its expense over all legal and accounting matters pertaining to such federal tax treatment (except to the extent necessary or appropriate for the Executive to resolve any such proceeding with respect to any matter unrelated to amounts paid or payable pursuant to this Section 6) and the Executive shall cooperate fully with the Employers in any such proceeding. The Executive shall not enter into any compromise or settlement or otherwise prejudice any rights the Bank may have in connection therewith without the prior consent of the Bank.
(d) Notwithstanding any other provision contained in this Agreement, if either (i) the time period for making any cash payment under this Section 6 commences in one calendar year and ends in the succeeding calendar year or (ii) in the event any payment under this Section 6 is made contingent upon the execution of a general release and the time period that the Executive has to consider the terms of such general release (including any revocation period under such release) commences in one calendar year and ends in the succeeding calendar year, then the payment shall not be paid until the succeeding calendar year.
Appears in 1 contract
Samples: Employment Agreement (Alliance Bancorp, Inc. Of Pennsylvania)
Payment of Additional Benefits under Certain Circumstances. (a) If the payments and benefits pursuant to Section 5 hereof, either alone or together with other payments and benefits which the Executive has the right to receive from the Employers, Employers would constitute a “parachute payment” as defined in Section 280G(b)(2) of the Code (the “Initial Parachute Payment”) and thus trigger an excise tax under Section 4999 of the Code), then the Bank Employers shall pay to the Executive, in a lump sum within ten business days following as of the Date of Termination, a cash amount (equal to the “Gross-Up Amount”) such that, after payment of all federal, state and local income and employment-related taxes (including Social Security and Medicare taxes, and reflecting the phase-out of deductions and the Executive=s ability to deduct certain of such taxes) and any additional excise tax under Section 4999 sum of the Code in respect of following:
(A) twenty (20) percent (or such other percentage equal to the Gross-Up Amount payment, the Executive shall be in the same after-tax position as if no excise tax had been rate imposed by Section 4999 of the Code on Code) of the amount by which the Initial Parachute Payment exceeds the Executive’s “base amount” from the Employers, as defined in Section 280G(b)(3) of the Code, with the difference between the Initial Parachute Payment and the Executive’s base amount being hereinafter referred to as the “Initial Excess Parachute Payment”;
(B) such additional amount (tax allowance) as may be necessary to compensate the Executive for the payment by the Executive of state and federal income and excise taxes on the payment provided under clause (A) above. Notwithstanding the preceding sentence, the Executive shall be responsible for the payment of any additional state and federal income and excise taxes that may be imposed on the payment of the tax allowance under this paragraph. In computing such tax allowance, the payment to be made under clause (A) above shall be multiplied by the “gross up percentage” (“GUP”). The GUP shall be determined as follows: GUP = Tax Rate
1 – Tax Rate The Tax Rate for purposes of computing the GUP shall be the highest marginal federal and state income and employment-related tax rate, including any applicable excise tax rate, applicable to and payable by the Executive in the year in which the payment under clause (A) above is made.
(b) Notwithstanding the foregoing, if it shall subsequently be determined in a final judicial determination or a final administrative settlement to which the Executive is a party that the initial Gross-Up Amount under actual excess parachute payment as defined in Section 6(a280G(b)(l) was either understated or overstatedof the Code is different from the Initial Excess Parachute Payment (such different amount being hereafter referred to as the “Determinative Excess Parachute Payment”), then the Bank’s Employers’ independent tax counsel or accountants shall determine the amount (the “Adjustment Amount”) which either the Executive must pay to the Bank Employers or the Bank Employers must pay to the Executive in order to put the Executive (or the BankEmployers, as the case may be) in the same position the Executive (or the BankEmployers, as the case may be) would have been if the actual Gross-Up Amount Initial Excess Parachute Payment had been equal to the Gross-Up Amount initially paidDeterminative Excess Parachute Payment. In determining the Adjustment Amount, the independent tax counsel or accountants shall take into account any and all taxes (including any penalties and interest) paid by or for the Executive or refunded to the Executive or for the Executive’s benefit. As soon as practicable after the Adjustment Amount has been so determined, and in no event more than thirty (30) days after the Adjustment Amount has been so determined, the Bank Employers shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the BankEmployers, as the case may be.
(c) In each calendar year that the Executive receives payments of benefits under this Section 6, the Executive shall report on his state, local state and federal income tax returns such information as is consistent with the determination made by the independent tax counsel or accountants of the Bank Employers as described above. The Bank Provided that the Executive reports such information in accordance with the Employers’ written directions, the Employers shall indemnify and hold the Executive harmless from any and all losses, costs and expenses (including without limitation, reasonable attorneys’ fees, interest, fines and penalties) which the Executive incurs as a result of so reporting such information, with such indemnification to be paid by the Bank to the Executive as soon as practicable and in any event no later than March 15 of the year immediately following the year in which the amount subject to indemnification was determined. The Executive shall promptly notify the Bank Employers in writing whenever the Executive receives notice of the institution of a judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Section 6 is being reviewed or is in dispute. The Bank Employers shall assume control at its their expense over all legal and accounting matters pertaining to such federal tax treatment (except to the extent necessary or appropriate for the Executive to resolve any such proceeding with respect to any matter unrelated to amounts paid or payable pursuant to this Section 6) and the Executive shall cooperate fully with the Employers in any such proceeding. The Executive shall not enter into any compromise or settlement or otherwise prejudice any rights the Bank Employers may have in connection therewith without the prior written consent of the BankEmployers.
(d) Notwithstanding any other provision contained in this Agreement, if either (i) the time period for making any cash payment under this Section 6 commences in one calendar year and ends in the succeeding calendar year or (ii) in the event any payment under this Section 6 is made contingent upon the execution of a general release and the time period that the Executive has to consider the terms of such general release (including any revocation period under such release) commences in one calendar year and ends in the succeeding calendar year, then the payment shall not be paid until the succeeding calendar year.
Appears in 1 contract
Payment of Additional Benefits under Certain Circumstances. (a) If the payments and benefits pursuant to Section 5 hereof, either alone or together with other payments and benefits which the Executive has the right to receive from the Employers, Employers would constitute a “parachute payment” as defined in Section 280G(b)(2) of the Code (the “Initial Parachute Payment”) and thus trigger an excise tax under Section 4999 of the Code), then the Bank Employers shall pay to the Executive, in a lump sum within ten business days following as of the Date of Termination, a cash amount (equal to the “Gross-Up Amount”) such that, after payment of all federal, state and local income and employment-related taxes (including Social Security and Medicare taxes, and reflecting the phase-out of deductions and the Executive=s ability to deduct certain of such taxes) and any additional excise tax under Section 4999 sum of the Code in respect of following:
(A) twenty (20) percent (or such other percentage equal to the Gross-Up Amount payment, the Executive shall be in the same after-tax position as if no excise tax had been rate imposed by Section 4999 of the Code on Code) of the amount by which the Initial Parachute Payment exceeds the Executive’s “base amount” from the Employers, as defined in Section 280G(b)(3) of the Code, with the difference between the Initial Parachute Payment and the Executive’s base amount being hereinafter referred to as the “Initial Excess Parachute Payment”;
(B) such additional amount (tax allowance) as may be necessary to compensate the Executive for the payment by the Executive of state and federal income and excise taxes on the payment provided under clause (A) above. Notwithstanding the preceding sentence, the Executive shall be responsible for the payment of any additional state and federal income and excise taxes that may be imposed on the payment of the tax allowance under this paragraph. In computing such tax allowance, the payment to be made under clause (A) above shall be multiplied by the “gross up percentage” (“GUP”). The GUP shall be determined as follows: GUP = Tax Rate
1 – Tax Rate The Tax Rate for purposes of computing the GUP shall be the highest marginal federal and state income and employment-related tax rate, including any applicable excise tax rate, applicable to and payable by the Executive in the year in which the payment under clause (A) above is made.
(b) Notwithstanding the foregoing, if it shall subsequently be determined in a final judicial determination or a final administrative settlement to which the Executive is a party that the initial Gross-Up Amount under actual excess parachute payment as defined in Section 6(a280G(b)(l) was either understated or overstatedof the Code is different from the Initial Excess Parachute Payment (such different amount being hereafter referred to as the “Determinative Excess Parachute Payment”), then the Bank’s Employers’ independent tax counsel or accountants shall determine the amount (the “Adjustment Amount”) which either the Executive must pay to the Bank Employers or the Bank Employers must pay to the Executive in order to put the Executive (or the BankEmployers, as the case may be) in the same position the Executive (or the BankEmployers, as the case may be) would have been if the actual Gross-Up Amount Initial Excess Parachute Payment had been equal to the Gross-Up Amount initially paidDeterminative Excess Parachute Payment. In determining the Adjustment Amount, the independent tax counsel or accountants shall take into account any and all taxes (including any penalties and interest) paid by or for the Executive or refunded to the Executive or for the Executive’s benefit. As soon as practicable after the Adjustment Amount has been so determined, and in no event more than thirty (30) days after the Adjustment Amount has been so determined, the Bank Employers shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the BankEmployers, as the case may be.
(c) In each calendar year that the Executive receives payments of benefits under this Section 6, the Executive shall report on his state, local state and federal income tax returns such information as is consistent with the determination made by the independent tax counsel or accountants of the Bank Employers as described above. The Bank Provided that the Executive reports such information in accordance with the Employers’ written directions, the Employers shall indemnify and hold the Executive harmless from any and all losses, costs and expenses (including without limitation, reasonable attorneys’ fees, interest, fines and penalties) which the Executive incurs as a result of so reporting such information, with such indemnification to be paid by the Bank to the Executive as soon as practicable and in any event no later than March 15 of the year immediately following the year in which the amount subject to indemnification was determined. The Executive shall promptly notify the Bank Employers in writing whenever the Executive receives notice of the institution of a judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Section 6 is being reviewed or is in dispute. The Bank Employers shall assume control at its their expense over all legal and accounting matters pertaining to such federal tax treatment (except to the extent necessary or appropriate for the Executive to resolve any such proceeding with respect to any matter unrelated to amounts paid or payable pursuant to this Section 6) and the Executive shall cooperate fully with the Employers in any such proceeding. The Executive shall not enter into any compromise or settlement or otherwise prejudice any rights the Bank Employers may have in connection therewith without the prior written consent of the BankEmployers. The Executive shall not be required to mitigate the amount of any benefits hereunder by seeking other employment or otherwise, nor, except as otherwise provided herein, shall the amount of any such benefits be reduced by any compensation earned by the Executive as a result of employment by another employer after the Date of Termination or otherwise.
(db) Notwithstanding The specific arrangements referred to herein are not intended to exclude any other provision contained in this Agreement, if either (i) the time period for making any cash payment under this Section 6 commences in one calendar year and ends in the succeeding calendar year or (ii) in the event any payment under this Section 6 is made contingent upon the execution of a general release and the time period that benefits which may be available to the Executive has upon a termination of employment with the Employers pursuant to consider employee benefits plans of the terms of such general release (including any revocation period under such release) commences in one calendar year and ends in the succeeding calendar year, then the payment shall not be paid until the succeeding calendar yearEmployers or otherwise.
Appears in 1 contract
Payment of Additional Benefits under Certain Circumstances. (a) If the payments and benefits pursuant to Section 5 hereof, either alone or together with other payments and benefits which the Executive has the right to receive from the Employers, Bank would constitute a “parachute payment” as defined in Section 280G(b)(2) of the Code (the “Initial Parachute Payment”) and thus trigger an excise tax under Section 4999 of the Code), then the Bank shall pay to the Executive, in a lump sum within ten either thirty-six (36) equal monthly installments beginning with the first business days day of the month following the Date of TerminationTermination or in a lump sum as of the Date of Termination (at the Executive’s election), a cash amount (equal to the “Gross-Up Amount”) such that, after payment of all federal, state and local income and employment-related taxes (including Social Security and Medicare taxes, and reflecting the phase-out of deductions and the Executive=s ability to deduct certain of such taxes) and any additional excise tax under Section 4999 sum of the Code in respect of following:
(A) twenty (20) percent (or such other percentage equal to the Gross-Up Amount payment, the Executive shall be in the same after-tax position as if no excise tax had been rate imposed by Section 4999 of the Code on Code) of the amount by which the Initial Parachute Payment exceeds the Executive’s “base amount” from the Bank, as defined in Section 280G(b)(3) of the Code, with the difference between the Initial Parachute Payment and the Executive’s base amount being hereinafter referred to as the “Initial Excess Parachute Payment”;
(B) such additional amount (tax allowance) as may be necessary to compensate the Executive for the payment by the Executive of state and federal income and excise taxes on the payment provided under clause (A) above and on any payments under this clause (B). In computing such tax allowance, the payment to be made under clause (A) above shall be multiplied by the “gross up percentage” (“GUP”). The GUP shall be determined as follows: GUP = Tax Rate
1 - Tax Rate The Tax Rate for purposes of computing the GUP shall be the highest marginal federal and state income and employment-related tax rate, including any applicable excise tax rate, applicable to the Executive in the year in which the payment under clause (A) above is made.
(b) Notwithstanding the foregoing, if it shall subsequently be determined in a final judicial determination or a final administrative settlement to which the Executive is a party that the initial Gross-Up Amount under actual excess parachute payment as defined in Section 6(a280G(b)(1) was either understated or overstatedof the Code is different from the Initial Excess Parachute Payment (such different amount being hereafter referred to as the “Determinative Excess Parachute Payment”), then the Bank’s independent tax counsel or accountants shall determine the amount (the “Adjustment Amount”) which either the Executive must pay to the Bank or the Bank must pay to the Executive in order to put the Executive (or the Bank, as the case may be) in the same position the Executive (or the Bank, as the case may be) would have been if the actual Gross-Up Amount Initial Excess Parachute Payment had been equal to the Gross-Up Amount initially paidDeterminative Excess Parachute Payment. In determining the Adjustment Amount, the independent tax counsel or accountants shall take into account any and all taxes (including any penalties and interest) paid by or for the Executive or refunded to the Executive or for the Executive’s benefit. As soon as practicable after the Adjustment Amount has been so determined, and in no event more than thirty (30) days after the Adjustment Amount has been so determined, the Bank shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the Bank, as the case may be.
(c) In each calendar year that the Executive receives payments of benefits under this Section 6, the Executive shall report on his state, local state and federal income tax returns such information as is consistent with the determination made by the independent tax counsel or accountants of the Bank Employers as described above. The Bank shall indemnify and hold the Executive harmless from any and all losses, costs and expenses (including without limitation, reasonable attorneys’ fees, interest, fines and penalties) which the Executive incurs as a result of so reporting such information, with such indemnification to be paid by the Bank to the Executive as soon as practicable and in any event no later than March 15 of the year immediately following the year in which the amount subject to indemnification was determined. The Executive shall promptly notify the Bank in writing whenever the Executive receives notice of the institution of a judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Section 6 3 is being reviewed or is in dispute. The Bank shall assume control at its expense over all legal and accounting matters pertaining to such federal tax treatment (except to the extent necessary or appropriate for the Executive to resolve any such proceeding with respect to any matter unrelated to amounts paid or payable pursuant to this Section 6) and the Executive shall cooperate fully with the Employers in any such proceeding. The Executive shall not enter into any compromise or settlement or otherwise prejudice any rights the Bank may have in connection therewith without the prior consent of the Bank.
(d) Notwithstanding any other provision contained in this Agreement, if either (i) the time period for making any cash payment under this Section 6 commences in one calendar year and ends in the succeeding calendar year or (ii) in the event any payment under this Section 6 is made contingent upon the execution of a general release and the time period that the Executive has to consider the terms of such general release (including any revocation period under such release) commences in one calendar year and ends in the succeeding calendar year, then the payment shall not be paid until the succeeding calendar year.
Appears in 1 contract
Samples: Employment Agreement (Alliance Bancorp Inc of Pennsylvania)
