Common use of Provisions For Taxes Clause in Contracts

Provisions For Taxes. If at any time specified herein for the making of any issuance or delivery of any Option or Common Stock to the Optionee or any beneficiary, any law or regulation of any governmental authority having jurisdiction in the premises shall require the Company to withhold, or to make any deduction for, any taxes or take any other action in connection with the issuance or delivery then to be made, such issuance or delivery shall be deferred until such withholding or deduction shall have been provided for by the Optionee or beneficiary, or other appropriate action shall have been taken. For so long as Optionee is deemed an employee of the Company, the Company hereby agrees to pay the amount of Optionee's income tax liability incurred by him upon exercise of the Stock Option or any portion thereof that is directly related to such exercise; provided, however, that the Company's obligation to pay such tax shall not exceed the amount of the tax benefit the Company receives as a direct result of the Optionee's exercise of the Stock Option or any portion thereof. Coverage of such tax by the Company shall be made in the form of a bonus to the Optionee, which will be also subject to the same tax coverage by the Company, up to a maximum amount of the Company's tax benefit derived from such bonus. The amount of the total tax liability of the Optionee (and, therefore, the Company's liability, up to a maximum of the tax benefit to the Company in connection with the foregoing) shall be calculated by the Company at the time of exercise of the Stock Option or any portion thereof pursuant to the following convergence formula recognized by the Internal Revenue Service as applicable to calculating such tax liability: I divided by (1 - X) multiplied by X (where "I" is the amount deemed compensation pursuant to option exercise and where "X" is the Optionee's highest marginal income tax bracket). For example, assuming the compensation resulting from option exercise if $1,000,000, and the Optionee was in the 40% tax bracket, the calculation for the total tax liability would be as follows:

Provisions For Taxes. If at any time specified herein for the making of any issuance or delivery of any Option or Common Stock to the Optionee or any beneficiary, any law or regulation of any governmental authority having jurisdiction in the premises shall require the Company to withhold, or to make any deduction for, any taxes or take any other action in connection with the issuance or delivery then to be made, such issuance or delivery shall be deferred until such withholding or deduction shall have been provided for by the Optionee or beneficiary, or other appropriate action shall have been taken. For so long as Optionee is deemed an employee of the Company, the Company hereby agrees to pay the amount of Optionee's income tax liability incurred by him upon exercise of the Stock Option or any portion thereof that is directly related to such exercise; provided, however, that the Company's obligation to pay such tax shall not exceed the amount of the tax benefit the Company receives as a direct result of the Optionee's exercise of the Stock Option or any portion thereof. Coverage of such tax by the Company shall be made in the form of a bonus to the Optionee, which will be also subject to the same tax coverage by the Company, up to a maximum amount of the Company's tax benefit derived from such bonus. The amount of the total tax liability of the Optionee (and, therefore, the Company's liability, up to a maximum of the tax benefit to the Company in connection with the foregoing) shall be calculated by the Company at the time of exercise of the Stock Option or any portion thereof pursuant to the following convergence formula recognized by the Internal Revenue Service as applicable to calculating such tax liability: I divided by (1 - Xx) multiplied by X x (where "I" is the amount deemed compensation pursuant to option exercise and where "Xx" is the Optionee's highest marginal income tax bracket). For example, assuming the compensation resulting from option exercise if $1,000,000, and the Optionee was in the 40% tax bracket, the calculation for the total tax liability would be as follows: