Common use of Payroll and Related Taxes Clause in Contracts

Payroll and Related Taxes. With respect to any Transferring Employee, the Parties shall, or shall cause their respective Subsidiaries to, (i) treat CSWI (or the applicable CSWI Companies) as a “successor employer” and Capital Southwest (or the applicable Capital Southwest Companies) as a “predecessor,” within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, for purposes of Taxes imposed under the United States Federal Insurance Contributions Act, as amended (“FICA”), or the United States Federal Unemployment Tax Act, as amended (“FUTA”), (ii) cooperate with each other to avoid, to the extent possible, the restart of FICA and FUTA upon or following the Distribution Date with respect to each such CSWI Company Employee for the tax year during which the Distribution Date occurs, and (iii) use commercially reasonably efforts to implement the alternate procedure described in Section 5 of Revenue Procedure 2004-53; provided, however, that, to the extent that CSWI (or the applicable CSWI Companies) cannot be treated as a “successor employer” to Capital Southwest (or the applicable Capital Southwest Companies) within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code with respect to any Transferring Employee, (x) with respect to the portion of the tax year commencing on January 1, 2015 and ending on the Distribution Date, Capital Southwest will (A) be responsible for all payroll obligations, Tax withholding and reporting obligations for such Transferring Employee and (B) furnish a Form W-2 or similar earnings statement to all such Transferring Employees for such period, and (y) with respect to the remaining portion of such tax year, CSWI will (A) be responsible for all payroll obligations, Tax withholding and reporting obligations regarding such Transferring Employees and (B) furnish a Form W-2 or similar earnings statement to all such Transferring Employees.

Payroll and Related Taxes. With respect to any Transferring EmployeeAFI Group Employee or group of AFI Group Employees, the Parties shall, or shall cause their respective Subsidiaries to, (i) treat CSWI AFI (or the applicable CSWI Companiesmember of the AFI Group) as a “successor employer” and Capital Southwest AWI (or the applicable Capital Southwest Companiesmember of the AWI Group) as a “predecessor,” within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, for purposes of Taxes taxes imposed under the United States Federal Insurance Contributions Act, as amended (“FICA”), or the United States Federal Unemployment Tax Act, as amended (“FUTA”), (ii) cooperate with each other to avoid, to the extent possible, the restart of FICA and FUTA upon or following the Distribution Date Effective Time with respect to each such CSWI Company AFI Group Employee for the tax year during which the Distribution Date Effective Time occurs, and (iii) use commercially reasonably efforts to implement the alternate procedure described in Section 5 of Revenue Procedure 2004-53; provided, however, that, to the extent that CSWI AFI (or the applicable CSWI Companiesmember of the AFI Group) cannot be treated as a “successor employer” to Capital Southwest AWI (or the applicable Capital Southwest Companiesmember of the AWI Group) within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code with respect to any Transferring EmployeeAFI Group Employee or group of AFI Group Employees, (x) with respect to the portion of the tax year commencing on January 1, 2015 2016 and ending on the Distribution Date, Capital Southwest AWI will (A) be responsible for all payroll obligations, Tax tax withholding and reporting obligations for such Transferring Employee AFI Group Employees and (B) furnish a Form W-2 or similar earnings statement to all such Transferring AFI Group Employees for such period, and (y) with respect to the remaining portion of such tax year, CSWI AFI will (A) be responsible for all payroll obligations, Tax tax withholding and reporting obligations regarding such Transferring AFI Group Employees and (B) furnish a Form W-2 or similar earnings statement to all such Transferring AFI Group Employees.